Banco Sumitomo Mitsui Brasileiro gains productivity through digital signatures
Digital formalization enabled growth in operational capacity.
SaaS Solution (Software as a Service) for Digital Signature and Workflow through the QualiSign Portal.
Increasing operational capacity to support growth.
About Banco Sumitomo Mitsui Brasileiro (SMBCB)
SMBCB, a subsidiary of Sumitomo Mitsui Banking Corporation (“SMBC”), was duly incorporated under the laws of Brazil with the commercial bank portfolio, and started to operate as a multiple bank. On the economic and operational side, the recent period resulted in a full emphasis on wholesale banking, with SMBCB assisting its clients in various areas of competence, such as financing commercial operations, commercial loans, structured transactions and consultancy, specifically targeting at Japanese commercial affiliates, as well as foreign companies, as well as Brazilian public and private companies
Founded in Brazil in 1958, Banco Sumitomo Mitsui Brasileiro (“SMBCB”) has a strong presence in the financial market, today with full emphasis on wholesale banking, helping its clients in various areas of competence, such as financing commercial operations, commercial loans, foreign exchange operations and others. At the beginning of 2017, one of the bank's guidelines was to grow in foreign exchange operations and for that, the BackOffice area needed to have operational capacity in order to be able to sustain growth with no impacts on cost. “Our challenge was to do more with the same resources,” said Bruno Capobianco, Head of Operations at SMBCB.
Based on this premise and assuming the imposed challenge, the Foreign Exchange BackOffice area reviewed its processes and identified that the digital formalization of foreign exchange contracts was a solution that still did not meet most clients. “There was no resistance from clients regarding the digital signature technology, but concerning the former solution provider. There were operational difficulties to digitally sign; less than half the portfolio of foreign exchange clients digitally signed. There was also no batch signatures, which made it even more difficult to formalize large volumes, something that was required by some of the clients. The process was inefficient,” concluded Bruno
Pilot with clients who were dissatisfied
The deployment process took place in 3 stages:
In the 1st stage, June 2017, a decisive and delicate test was started. 2 clients were chosen, as they were dissatisfied with the previous process. A multidisciplinary team from the bank and the new provider were transferred to these customers: IT, Technical Support and BackOffice to train and accompany customers in person, throughout the process. “We guided the clients through the process, from the first access to the portal to the very signing of the contracts. Clients would upload the actual contracts at the portal and signed them for real. They signed in batches and were very satisfied with the results, in addition to praising the approach of this type of pilot. No stress at all!”, commented Bruno
In the 2nd stage, we had the migration of the remaining clients, who already used a digital signature in the former provider, to the new one. This process took only a month.
In the 3rd stage, the objective was to convert clients who still signed the contract on paper to the digital format. “This process was gradual, as there is always a cultural resistance to abandoning paper.
Moreover, some clients with a Japanese origin, for example, have the “Hanko” (ハ ン コ) culture, namely a personalized stamp that identifies the author of the signature, and which gives great credibility to the paper. The end result is that we managed to bring a large part of the portfolio to the digital medium. Today, around 84% of the foreign exchange client portfolio uses a digital signature. The remaining percentage, 16%, is still on paper. The new clients have already started operating with the digital signature,” explained Bruno.
Speed, cost reduction and other benefits
At the bank, the process of formalizing the exchange contract worked as follows: The exchange contract was printed in 2 copies, these copies were sent to the client. The client's attorneys signed both copies and returned them to the bank. The attorneys' signatures were validated by the bank, and – if the signatures matched – the bank's attorneys-in-fact would sign the 2 copies. One copy was returned to the client by mail and the bank copy was forwarded to a file, at a third-party company.
“We gained in agility with the reduction in time, from D+4 days (in the case of “the best scenario” paper contract) to D-0, that is, in minutes or in hours, but everything is formalized at the same day,” declared Bruno.
“In relation to costs, we did not do all the calculation, but we certainly had a reduction in expenses when we eliminated paper printing, sending the document to the clients, filing the paper document at the outsourced company and mainly reducing the time for attorneys to sign these documents on a daily basis. It is also important to recall that our client also won by reducing the costs of sending the contract to the bank,” reinforced Bruno.
Compliance and Security
Still regarding the paper processing, when sending documents to clients, the issue of security risk and compliance is always present, due to the likelihood of contract loss and access to confidential information. “With the digital solution, we are aligned with security and compliance policies, as we also have the formalization process traceability,” argued Bruno.
Doing more with the same
One of the most important results was the increase in the area's capacity, that is, the productivity gain, as the digital signature saves precious time previously spent with the control and management of paper contracts. This contributed significantly to absorb the increase in the volume of operations estimated at 18.5% (2017/2018). “This growth in volumes was absorbed without a growth in the workforce, due to the better efficiency provided by the new process (and the Digital Signature was one of them),” confirmed Bruno.
Considering the foreign exchange contracts that were signed in the last 12 months in digital media, we have a reduction in paper emissions amounting to 139,200 sheets per year (A4 paper), which stands for savings of 13.9 trees. In the production of this amount of paper, approximately 34,750 liters of water and 3,475kWh of energy would be spent. The reduction in CO² emissions based on the motorized transport of documents and papermaking was 37.1 tons of CO²e/year.
The bank plans to expand the use of digital signatures in NDF derivatives. “We must be able to customize, provide specialized service, seek alternatives and bring agility to clients, as we did with clients who were dissatisfied with the former formalization process. It is by doing so that we daily pursue the continuous improvement of our processes, in the search for greater efficiency and operational effectiveness,” concluded Bruno.