While it could be said that the paths of paper transactions and electronic transactions lead to the same destination, it can also be said that one is vastly quicker than the other. In the world of financial turmoil and market volatility, speed is often of the essence.
Much like vinyl records, paper transactions do have a nostalgic appeal to them, but the question you need to ask yourself is whether this “old school” feel is worth its inherent risks. With paper, the transmission of crucial information is waylaid by the time it takes to fill out the required documents, submit the order to the appropriate parties, and await the result of compliance checks. Compounding these risks is the additional time it takes to correct any discrepancies if or when a document receives an NIGO (Not In Good Order) designation.
- According to a source at one of the country’s Top 5 insurance carriers, upwards of 30-40% of paper transactions are held up in the approval process due to NIGO issues that need amending in order to move forward.
- In comparison, it’s also estimated that only 10-20% of applications submitted through an electronic order entry system are marked NIGO, cutting the risk of dealing with a rejected application by more than half.
Why does such a stark gap exist between the two methods? Well, one reason is because with e-orders the proper forms are automatically available and presented to the order creator. With the right forms immediately at your fingertips the chance of turning in outdated forms drops precipitously. In addition, many e-orders will block you from submitting your forms if there are any suitability issues such as missing data or incomplete required fields, which cut down even more on the chances of an order being returned (i.e., bleeding time away from the order being successfully processed).
Also on the rise is the prevalence of e-signature capabilities embedded directly into digital documents platforms. Rather than chasing down a signature using a PDF that needs to be faxed between parties, built-in digital signature software offers a fast and simple way to acquire the necessary sign offs with minimal back-and-forth, further enhancing overall efficiency.
As for the review process itself, reviewers can add comments directly into e-documents which eliminates the need to return forms back to the sender. As is the nature of agreements, the more checks that are added, the slower the paper process can become.
Whether your firm has mandates, encourages, or disregards the use of electronic orders, it seems to be undisputed in terms of speed, accuracy, and overall quality.
Mistakes are commonplace but they don’t have to be. Electronic order entry is a great way to strengthen the flow of requests in the one direction that works best: forward.