Document Management System in the Mauritian Banking Sector

By Soodesh Kumar Gajadhur Beegun MBA/05/PT Master in Business Administration with specialisation in Information System SCHOOL OF PUBLIC SECTOR POLICY AND MANAGEMENT UNIVERSITY OF TECHNOLOGY, MAURITIUS Submitted on 30th November, 2006

Table of contents
Abstract Acknowledgements List of Tables List of Figures List of Abbreviations Chapter 1: General Introduction
1.1 Aims and Objectives of this Study 1.2 Evolution of the Banking Sector 1.3 Initiatives of the BOM to modernise the Banking Sector in Mauritius 1.3.1 1.3.2 1.3.3 1.3.4 1.3.5 1.3.6 Communication Network Mauritius Automated Clearing and Settlement System Magnetic Ink Character Recognition Cheques Real Time Gross Settlement (RTGS) and Electronic Fund Transfer Electronic Payment Channels New project in the pipeline - Cheque Truncation System

Pg. No i ii iii iv v 1 1 2 3 3 3 4 4 4 4 6 6 6 8 9 12 13 13 14 15 15 18 20 22 23 25 25 28

Chapter 2: Document Management System

2.1 Definition 2.2 Components of a Document Management System 2.2.1 Capture for bringing documents into the system 2.2.2 Methods for storing and archiving documents 2.2.3 Indexing and retrieval tools to locate documents 2.2.4 Distributing or exporting documents from the system 2.2.5 Security to protect documents from unauthorized access 2.2.6 Record Management of documents 2.3 Benefits of a Document Management System 2.4 How is DMS related to the Banking Sector? 2.4.1 The Present Clearing Process 2.4.2 The Port Louis Automated Clearing House 2.4.3 Overview of Cheque Truncation System 2.4.4 Document Management System - infrastructure for Cheque Truncation System

Chapter 3: Assessment of Current Infrastructure within The Banking Sector

3.1 Banking and other financial institutions 3.2 Documents used in Banking Environment

3.2.1 Financial Documents 3.2.2 Non-Financial Documents 3.3 Archiving methods currently used by banks 3.4 Document retention and legal framework 3.4.1 Types of documents and the respective retention period 3.4.2 Electronic records and signatures 3.5 Access to archived document

29 29 35 35 36 38 39 40 41 41 41 41 42 42 43 43 43 43 43 44 44 44 44 44 45 45 46 46 46 47 48 48 49 49 49

Chapter 4: Benchmarking DMS for Banks

4.1 Architecture considerations 4.1.1 4.1.2 4.1.3 4.1.4 4.1.5 4.1.6 4.1.7 4.1.8 4.1.9 Usability Interface design Workflow Scalability Multi-tier support with each tier fully independent Multi repository storage for image Platform independent Support for Databases XML Technology base

4.1.10 Image processing libraries for supporting compression and extraction 4.1.11 Robust System Administration 4.1.12 Integration with existing application 4.1.13 Automatic Archiving of image 4.2 Image Scanning Features 4.2.1 Capture 4.2.2 Facility for bulk scanning 4.2.3 Client-server architecture for storage 4.2.4 Multi-stage control over the process to assure quality of image 4.2.5 Automatic indexing and OCR capabilities 4.2.6 Compression of scanned Image files appropriate format 4.2.7 Automatic batch creation capabilities 4.2.8 Web based scanning facility to support high volume 4.3 Image Acquisition Features 4.4 Archival of document images 4.4.1 Support commonly used format 4.4.2 Portability

4.4.3 Linking capabilities of images and documents 4.4.4 Document control through locking mechanism during editing 4.5 Image security layer and Image View 4.6 Indexing of Images 4.6.1 User defined indexes 4.6.2 Mandatory Unique field 4.6.3 OCR functionality 4.7 Search and Retrieval and access right 4.7.1 Fuzzy Logic 4.7.2 Wildcards 4.7.3 Boolean Operators 4.7.4 Proximity Searches 4.7.5 Result of Searches 4.8 Security and User administration 4.8.1 User Login Administration 4.8.2 User Access Right Administration 4.9 Image transfer, delivery, distribution and data safeguard 4.10 Reports and Audit trails features 4.11 System upgrade and after sales System support

49 49 50 50 50 50 50 51 51 51 51 51 51 53 53 53 54 55 55 56 56 56 57 58 58 60 61 61 62 62 63 64 65 74

Chapter 5: Research on DMS within banking environment

5.1 Research Objectives 5.2 Methodology 5.3 Data Collection Method 5.4 Results and Discussion 5.4.1 Existing Document Handling Infrastructure 5.4.2 Usage of Computer Applications to generate documents 5.4.3: Usage of Collaboration Suite for Document Sharing 5.4.4: Document currently use and stored 5.4.5: Access to Archived Document 5.4.6: Document Management System 5.4.7: Other findings

Chapter 6: Conclusion and Recommendations Appendices References

Abstract
Documents are considered as the lifeblood and connective tissues of all business organisations and all processes are linked to each other through documents. Document, whatsoever form it can take, is of prime importance in the Banking sector as it forms the basis of any financial undertaking. To better manage document handling banks devise their own mechanism internally. The ultimate objectives of each mechanism are to reduce time for accessing and retrieving information, improve customer service by accessing relevant documents faster, more effectively use of resources, reduce storage space devoted to archived printed documents and manage compliance issues as per legal requirements. Furthermore, concepts like corporate governance and accountability are gaining impetus in Mauritius, where banks are now dealing with a host of new regulations and enforcement initiatives.

A document accessed via the web and linked to the banking system via the e-banking channel can dramatically streamline operations that previously required a series of manual tasks. This eliminates many obstacles created by paper which is labour intensive, duplicate procedures, slow distribution, misplaced originals and inconvenience of retrieving files from remote locations. There is a need for greater visibility and control of time sensitive and business critical information that is contained in many different documents and formats across the whole organisation. With foreseeable new and emerging requirements, banks need flexible and cost effective systems to meet present and future compliance requirements.

This study has been carried out to better understand the document management infrastructure within the banking sector in Mauritius and sense the readiness of banks to adopt it so as to meet the current requirement of "Cheque Truncation System" which is an ongoing project initiated by the Bank of Mauritius in the endeavour of sophisticating the payment system. Furthermore, an integrated document management system will help the banks to improve the customer service through internet channel and response to queries from regulator and other authorities. The survey carried out reveals that most of the banks have already embarked on electronic document management system and the technological drive within the sector will push them further to automate the document handling processes.

Acknowledgements
This dissertation generates from the knowledge acquired during the course of study for the past 2 years at University of Technology, Mauritius and my exposure to Banking and Information Technology sectors during the past 20 years.

I would express my thanks for the support of my supervisor, Dr. D. Mulliah, for the guidance and immense help extended to me throughout the preparation.

I am also thankful to my colleagues within the banking sector in helping me in carrying out the survey, though we are all barred by the oath of confidentiality as stipulated by the Banking Act 2004. They should rest assured that any information provided will in no circumstance be disclosed in its original form but will only be used to get a holistic view of the banking sector.

Many thanks also go to my core team at the University and at my work place for their moral support.

Heartfelt thanks to my wife, Kavita and children, Dakshesh and Pallavi for their continuous encouragement and unflinching moral support. A special tribute to my late daughter, Sheebanee and late father, Gobin who passes away during my course of study.

Soodesh Kumar Gajadhur Beegun November 2006

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List of Tables
Page No. Table 3.1: List of Transaction based documents Table 3.2: List of Instruction based documents Table 3.3: List of Financial control documents Table 3.4: List of Customer related documents Table 3.5: List of bank related documents Table 3.6: List of Statutory documents Table 4.1: Best Files types for general purposes Table 5.1: Summary of survey results related to computer application usage Table 5.2: Summary of survey results related to collaborative suite usage 30 31 32 33 34 35 48 60 61

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List of Figures
Figure 2.1: Document Management System Figure 2.2: The Clearing of Cheque Process Figure 2.3: The SWIFT Messaging for RTGS Figure 2.4: The Real Time Gross Settlement System Figure 2.5: Mauritius Automated Clearing and Settlement System Figure 2.6: The Cheque Truncation System Process Flow Figure 3.1: Three Pillars for innovation in Banking Sector Figure 3.2: Category of documents Figure 6.1: The banking services sector and interaction with forces Page No 7 18 20 21 22 23 27 28 65

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List of Abbreviations
Banking Sector ATM Automatic Teller machine BIC Bank Identification Code BOM Bank of Mauritius KYC Know Your Customer MACSS Mauritius Automated Clearing and Settlement System MCIB Mauritius Credit Information Bureau PIN Personal Identification Number PLACH Port Louis Automated Clearing House RTGS Real Time Gross Settlement System SWIFT Society for Worldwide Interbank Financial Telecommunication Computer ADSL ASCII CD CD-ROM DVD G3 GIF HTML HTTP IP JPEG LZW MAPI MICR NAS OCR ODBC PDF RAID SAN SQL SSL TIFF UDA W3C WWW XML Others FSC ICAC MRA R&D

Asymmetric Digital Subscriber Line American Standard code for Information Interchange Compact Disk Compact Disk Read Only memory Digital Video Disc Group 3 ( Compression) Graphic Interchange Format HyperText Markup Language HyperText Transfer Protocol Internet Protocol Joint Photographic Experts Group Lempel-Zif-Welch ( Compression) Mail Application Program Interface Magnetic Ink Character Recognition Network Attached Storage Optical Character Recognition Open Database Connectivity Portable Document Format Redundant Array of Independent Disks Storage Area network Standard Query Language Secure Sockets Layer Tagged Image File Format Universal Data Access World Wide Web Consortium World Wide Web Extended Markup Language

Financial Services Commission Independent Commission Against Corruption Mauritius Revenue Authority Research and Development

Chapter 1: General Introduction

Document management (DM) systems have long been touted as the answer to many paper-related problems. They seem to offer the opportunity to exercise a high degree of control over the ways in which paper documents are handled or preferably not handled. However, there have been two basic types of DM systems: the "cheap and cheerful" which perform a number of relatively simple and relatively useful functions but stop short of doing all that is ideally necessary and give some concern about standards and future compatibility and the "full-blown, expensive systems" which seem to offer all that is necessary but are frightening in terms of the degree of impact they have on the business and its clerical/administrative procedures [1].

Streamlining business processes and increasing productivity are fundamental concerns for any bank. In an increasingly strict regulatory environment, managing documents and records diverts significant time from a bank's mission-critical objectives.

Document and records management software has many benefits that can appreciably improve bank's efficiency. Since these applications are complex systems that represent a solid investment, banks should carefully evaluate their current and future needs beforehand.

1.1

Aims and Objectives of this Study

This study dwells into various aspects for setting up an electronic document management system in the banking environment, assess the readiness of banks and further improve on the internal environment to handle document to respond to any query from regulators and other authorities as stipulated by law in a more efficient manner. We will evaluate the current Document Management System in place in the Banking Sector and the different methods used to handle documents. The Banking sector is the most regulated environment and we will also go through the legal framework that supports electronic Document Management.

We will also look into the infrastructure required to set up an integrated electronic Document Management system to support document image archival, record management, collaboration across individual banks. Additionally, banks have

adopted new technology-based core banking application and can be linked to document management system to relate to transaction, bank's Content Management linked to e-banking and mobile banking and further build-up of knowledge base within individual banks in a shared platform within the Banking Sector.

The ultimate outcome of this study will be to produce guidelines for implementing a fully integrated electronic Document Management System that will accelerate business processes by allowing instant access to information, greater collaboration among department and offices and banks, enhance security for files and records and apply procedures to comply with record keeping requirements imposed by local legislation. Additionally, this will give a framework to authorities such as Independent Commission against Corruption (ICAC), Financial Services Commission (FSC), Mauritius Revenue Authority (MRA), Courts of Law and customers to get the required information within a reasonable timeframe after the implementation of the electronic Document Management system within the whole banking sector.

1.2

Evolution of the Banking Sector

Viewed from the perspective of history, the global banking paradigm has been changing all the time since the beginning of the 1970's. What makes the difference is the speed of the changes that have taken place since the 1980's as increasingly more and more smart players have been joining the banking and financial sector.

Success in business today is time-critical. Speed has drastically shortened product life cycles. Consumers, whether they are of financial services or of tangible products, seek real time responses. As is generally said, "miss a day and the world moves on without you".

Banks have adjusted and re-adjusted to the shifts in paradigm over years. They successfully developed their business models focusing on niche markets and grew in size over time. Advanced countries have attained their present level of economic

development largely due to investment in Research and Development (R&D) and innovation and this is seriously lacking in emerging economies like Mauritius, which leads them to always follow others.

The main driver in the Banking sector in Mauritius to bring about innovation is the Bank of Mauritius (BOM) and various initiatives have been taken in the past years to align Mauritius in the global market. In the past 10 years, BOM being the regulator of the financial sector has taken initiatives linked to technology to enhance the payment system and clearing house activities.

Another driver is the stiff competition between financial institutions and this has brought about a narrowing of basic margins in the area of finance and other business areas. Financial institutions are urged to re-invent themselves and reengineer the processes all the time. In the past decades, commercial banks have adopted various technology-driven channels to better serve the customers and build a competitive advantage

1.3 Initiatives of the BOM to modernise the Banking Sector in Mauritius

1.3.1 Communication Network Setting up of an extranet to link all commercial banks has built up a secure network to exchange data and transaction file among banks. This has made BOM an electronic nerve centre of the Banking system. Banks are now using the secure extranet to file returns to BOM, exchange clearing files, update the Mauritius Credit Information Bureau (MCIB) and inquire on credit profile of individual, companies and corporate prior to credit sanction. 1.3.2 Mauritius Automated Clearing and Settlement System BOM has been taking several reform measures to improve safety and efficiency in the payment modes. Establishing the Mauritius Automated Clearing and Settlement System (MACSS) has improved the clearing system of cheques. The implementation of the Port Louis Automated Clearing House (PLACH) in November 2002 and MACSS have automated the clearing and settlement process. The extranet among banks has increased the efficiency in the payment system. Thrust has been towards a

move to the safer and more efficient electronic mode of payment. It is also necessary that we take measures to improve efficiency in the paper-based mode of payments. 1.3.3 Magnetic Ink Character Recognition Cheques The introduction of the Magnetic Ink Character Recognition (MICR) technology for cheque processing is one of the milestones towards a fully integrated electronic payment system. However, beyond a point the MICR technology could not speed up the collection process because of the logistics involved in the requirement that the cheques have to be physically transported all the way from the collecting branch of a bank to the Paying bank branch. The number of clearing cycles has been reduced from three to two and the clearing delay has been reduced to two days from date of presentation to the Paying bank. 1.3.4 Real Time Gross Settlement (RTGS) and Electronic Fund Transfer Electronic fund transfer mechanism among banks where BOM is the transfer agent through SWIFT messaging network has been introduced. Banks, other financial institutions and tax authorities use the network to transfer funds within the banking system. Fund transfer among banks is also initiated by customers for payment to tax authorities and other parties. 1.3.5 Electronic Payment Channels Introduction of ATMs, Electronic Point of Sales and credit cards, internet banking, kiosk terminal, remote customer terminal, phone banking and mobile banking are initiatives to service the customer better and at the same time adapt to meet the global competition. To support the technological developments resources in terms of finance, IT Infrastructure, skilled man power and expert know how are required. 1.3.6 New project in the pipeline - Cheque Truncation System In a nutshell, truncation is the process whereby electronic images are taken of cheques and the whole image or particular information appearing are captured and forwarded by electronic means to the paying bank for verification, validation and clearing. Truncation, therefore, makes it unnecessary for the cheque to be physically presented to the paying bank for payment. Account holders will continue to write cheques as they do now, and when they receive cheques they will deposit them at their banks as usual. Banks will set up the appropriate infrastructure to accommodate the system. Instead of moving the actual physical cheques to the clearing house, the data captured 4

from the cheque and the image file to the institution that holds the account on which the cheque was written. Cheque truncation will represent a significant shift in processing of cheques; the original paper cheque will no longer serve much purpose. The bank in possession of the "paper" cheque will both physically store and digitally archive the voucher according to statutory requirements [2]. BOM has now initiated the Cheque Truncation System which is still at the feasibility stage. The revised Banking Act 2004 and the Bank of Mauritius Act 2004 empower banks to set up such an electronic system. Cheque truncation system has been adopted worldwide in more than 11 countries in the recent past and some are still at project stage. This project for Mauritius will be another milestone in improving its payment system.

The creation and handling of imaging capabilities within the clearing system will help in bringing efficiency improvements in handling volume and reconciliation of clearing differences.

It will be therefore imperative for all banks to maintain a digital archive and manage cheques images that need to be linked to the present financial system for any query thereon.

However, a fully integrated document management system will prove to be an enabler in handling all types of documents being used by the banking sector and will set the stepping stones towards the "paperless office".

Chapter 2: Document Management System

In this chapter we are going to define a Document Management System, go through its different components, analyze the benefits of implementing such a system and see how DMS is related to the Banking Sector.

2.1

Definition

Document management begins with the conversion of paper or other documents into digitized images. These images can be easily organized and quickly retrieved, indexed and archived. When files are scanned or electronically converted, a highresolution digital copy is stored on a hard drive or optical disc. Templates, or electronic index cards, can attach information, such as author, reference number, date created, or key words to a document. Files can still be viewed, printed, shared and stored. Which documents a user can read and what actions he can perform on these documents depend on the level of security that the system administrator has assigned to that user.

Digital document management represents a significant advance over storing information on paper. Document is no longer just ink on a page. It has become active content after having been processed by Optical Character Recognition (OCR) technology. A document management system should offer effective search tools for document retrieval, including full-text search, index field searches and a visual filing scheme that permits users to browse for documents. Figure 2.1 shows the combination of all types of electronic documents and the processes all around the DMS.

2.2

Components of a Document Management System

A typical DMS has basic components for capturing documents into the system, storing and archiving documents, indexing and retrieval tools to locate documents, distribution methods for exporting documents from the system and security modules for protecting documents against unauthorised access.

Figure 2.1: Document Management System [3]

2.2.1 Capture for bringing documents into the system There are three primary methods of bringing paper documents and other electronic files into a document management system. 2.2.1.1 Scanning the paper document Scanning a document produces an image that can be stored on a computer. While choosing a scanner, it is important to consider the size and volume of paper to be scanned. The ability to support a wide range of scanners is one of the defining characteristics of a versatile document management system. Depending on the size of documents banks have in their physical archive and the work flow based on the number of documents to be scanned per day, the model of the scanner can be decided on.

A scanner should have an Automatic Document Feeder (ADF). The ADF speeds up the scanning process by allowing stacks of paper to be placed into a tray and automatically fed one page at a time into the scanner. Scanners without an ADF require each page to be manually placed in the scanner; they are designed primarily for imaging graphics and can be used to handle very low document volume.

Scanners can handle a variety of paper sizes, from business cards to support E-size (34-inch x 44-inch) documents. Most departments of banks only need to scan documents up to legal-size paper (81/2-inch x 14-inch). In general, the larger the paper size the scanner can handle, the more expensive it is. Other options, such as colour or grayscale, also increase the scanner's price.

The speed of the scanner is another consideration. Document imaging scanners can handle between 10 and 200 pages per minute. These are available in both simplex and duplex modes. Duplex scanners allow both sides of a two-sided document to be scanned in a single pass. High-speed scanning and duplex scanning can increase the price of the scanner. With improvement in the imaging technology, the scanners are becoming smaller and can be attached to a desktop computer for scanning process, thus becoming part and parcel of the office working environment.

2.2.1.2 Importing existing electronic documents from different sources Document importing is the process of bringing electronic files, such as word processor or spreadsheet documents, graphics, audio clips or video files, into a document management system. The support for multiple platforms specifically Windows, Linux and Sun Solaris is an essential feature of a Document Management System. Files can be dragged into a Document Management System and remain in their native formats. These files can be viewed in their original format by either launching the originating application or by using an embedded file viewer from within the document management system.

2.2.1.3 Conversion of electronic file to a permanent format Converting documents is the process of transforming electronic files, such as word processor or spreadsheet documents, into permanent, image format for storage within a DMS. Windows applications, such as Microsoft Word, Excel or AutoDesk AutoCAD can print existing files into an unalterable image of the document. These images are usually stored as archival-quality Tagged Image File Format (TIFF) or Portable Document Format (PDF). For documents, the conversion process also pulls a clean stream of text directly from the document, eliminating the need for Optical Character Recognition (OCR). This text file can then be used for full-text indexing of the document to assist with later retrieval. Converting electronic document bypasses scanning, saves paper and printer ink and produces a cleaner image than scanned paper files. The integration with Microsoft Office and other applications is one of the features that a DMS should have to permit users to convert documents to permanent archive format with maximum ease.

2.2.2 Methods for storing and archiving documents Once brought into the system, documents must be reliably stored. Document management storage systems accommodate changing technologies and an organisation's future growth. Hardware independence is critical as to assure that a document management system will meet all of our current and future needs. A versatile document management system is compatible with all storage devices currently available as well as those on the horizon to provide long-term document storage or archival. 9

To ensure the future readability of documents, a document management system should store files in format, such as TIFF or PDF or ASCII.

Based on the volume of data being used by the organisation, the data can reach even up to terabytes with time. The storage media should be able to provide the space and high speed access, targeted to have search time less than 4 seconds as a standard.

Currently, there are three primary storage options that can be used in a DMS. 2.2.2.1 Magnetic Media (Hard Drives) Increasingly fast response times to store and retrieve a document, along with dramatic reductions in storage prices, make magnetic media a popular choice. These systems include Redundant Array of Independent Disks (RAID), Network Attached Storage (NAS) and Storage Area Networks (SAN). These devices are relatively inexpensive and can be linked together to store large numbers of documents and provide fast response times.

The main drawback of magnetic media is that, while inexpensive, they still contain moving parts, which are subject to mechanical failure. Data files can also be completely erased. Regular backups of hard drives on magnetic tapes or DVD are required so that if data is erased or damaged, it can be restored.

A proper business continuity plan is required for backup of data for banks as some data need to be preserved up to 30 years or even more. 2.2.2.2 Magneto-Optical Storage In the past, the magneto-optical (MO) diskette/disk drive was a popular way to back up files on a personal computer. As the term implies, an MO device employs both magnetic and optical technologies to obtain ultra-high data density. A typical MO can store data ranging from 100 MB up to several gigabytes (GB).

The chief assets of MO drives include convenience, modest cost, reliability and, for some models, widespread availability approaching industry standardization. MO disks can be placed in jukeboxes that hold hundreds of disks. The chief limitation of 10

MO drives is that they are slower than hard disk drives and still subject to mechanical failure. Data files can also be completely erased. With the drop in the price of hard drives and the use of portable hard drives using USB ports, the popularity of magneto-optical storage has faded. 2.2.2.3 WORM for permanent storage Write Once Read Many (WORM), is an optical disc technology that allows data to be written onto a disk just once. The data is permanent and can be read any number of times. In this general sense, WORM includes more common storage media such as CDs and DVDs.

CDs offer a safe and reliable medium that can provide long-term storage for images. Moreover, CD-ROMs do not require specialized hardware or software to retrieve information. CDs use ISO-9600 specifications; this means the data can be read on many computer platforms. The primary drawback of this medium is its limited storage capacity, 650 MB. CD-ROMs can be accessed through CD-ROM drives, CD towers and jukeboxes of up to 500 discs, making it a convenient method of storing large numbers of imaged documents.

DVD is another form of optical disc storage technology. It is essentially a faster CD that can hold more information, including video, audio and computer data. Since the disc is read by a beam of laser light, there is no wear and tear, even if it keeps reading the same data. The tough plastic surface is forgiving of fingerprints, dust and dirt. This means DVDs can be played thousands of times and continue to represent the best long-term option for reliable document management storage.

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2.2.3 Indexing and retrieval tools to locate documents A full-featured document management system makes retrieval of relevant documents fast, easy and efficient, and offers multiple methods of indexing, or categorizing, information. Indexing allows users to quickly sort large volumes of data to find the right document. Whatever the combination of indexing methodologies, search methods need to be easily used and understood.

There are three primary ways of indexing files in a document management system: 2.2.3.1 Full-Text Indexing Full-text indexing allows users to locate any word or phrase that appears in the document. By providing full-text indexing, document management systems can eliminate the need to read and manually index documents using keywords.

To enable full-text indexing, the software must have the capability to perform Optical Character Recognition (OCR). The OCR process translates printed words into alphanumeric characters with near-perfect accuracy, enabling each occurrence of a word to be tracked by the application. OCR dramatically reduces the cost of manual indexing while providing improved search capabilities. However, OCR cannot process handwriting or images. 2.2.3.2 Index Fields Index field searches enable users to comb through millions of records in seconds to find necessary documents. The ability to use index field information to locate documents is important in cases where a topic search is more expedient than finding every occurrence of a particular word or where the database contains images without printed text. A full-featured document management system has user-definable template fields. In situations where the person who selected the keywords is not the one searching for files, this method has obvious limits.

A document management system allows users to customize index templates, create multiple templates and support different types of index field data within each template, such as date, number and alphanumeric characters. Index fields can be used to categorise documents, track creation or retention dates, or record subject matter,

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among other information. A document management system enables pull-down boxes of common key words to speed index field entry and have tools available to help automate entering index information. 2.2.3.3 Folder/File Structure Along with enabling full-text and index field searches, a document management system should enable users to locate documents by browsing. A full-featured document management system lets an organization electronically recreate its existing filing system through a nested folder structure. A flexible folder structure eases the transition from paper filing to electronic filing, which makes the transition to document management systems smoother.

2.2.4 Distributing or exporting documents from the system A document management system makes it possible for multiple users to access the same files at the same time and for documents to be distributed to authorised individuals 'within and outside of an organisation - over an intranet, by e-mail, or through publication to the Web, CD or DVD. A full-featured document management system safeguards an unalterable copy of the original while allowing enhance collaboration and service by circulating copies in the format that best serves your business needs.

When system administrators decide to deploy a document management system across their entire network through an intranet, or even to the public over the Internet, they should make it possible for users to search, retrieve and view documents with any Web browser. Browser-based document access removes the logistical problems associated with computer platform (Windows, Linux, Sun Solaris, Macintosh, etc.)

2.2.5 Security to protect documents from unauthorised access System security is an absolute necessity for any document management system. A rigorous security system should permit every authorised person to perform required duties whether from desktop, laptop, the office, a remote location or over the Web without compromising the integrity of the database, system or network.

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A full-featured document management system gives the system administrator the tools to balance access and security through control over both access rights and feature rights. Access rights determine who can log onto the system and which folders or files they can open. Feature rights determine the actions that individuals can perform on documents to which they have access. A comprehensive security system also allows high-level users to redact or black out confidential information within files.

2.2.6 Record Management of documents Record management of the documents is essential to comply with regulations and retention period of document as required by law. Records management is part of document management that deals with information serving as evidence of an organisation's business activities. In particular, it is a set of recognised practices related to the life cycle of that information. Most often, records refer to documents, but they can include other forms of information, such as photographs, blueprints, or even books. Record management requires the application of systematic controls to the creation, maintenance and destruction of an organisation's records.

The fundamental concept behind record management is the idea of the life cycle of the record. Life cycle refers to the stages that every official business record must undergo. After a record has been created, it must be filed according to a defined, logical scheme into a managed repository where it will be available for retrieval by authorised users. When the information contained in records no longer has any immediate value, the record is removed from active accessibility. Depending on the nature of the record, it is either retained, transferred, archived, or destroyed.

Record management facilitates the inventory of records and the application of consistent records policies. Record management protects records from loss and tampering, while allowing the records manager and other decision makers to access the necessary information.

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2.3

Benefits of a Document Management System

The document management process begins with the conversion of paper documents and records to electronic files. Digitizing eliminates the many obstacles created by paper-labour intensive duplication procedures, slow distribution, misplaced originals and the inconvenience of retrieving files from remote locations. Because paper files are also costly to process, duplicate, distribute and store, digitizing reduces operating expenses and overheads.

Document management applications enable more efficient distribution of and control over information, files and records throughout the organization. These software programs simplify business processes by automating repetitive procedures, document routing and e-mail notification. Document management systems expedite business processes by allowing instant access to information; greater collaboration within and among departments and offices; enhanced security for files and records; and the application of procedures that facilitate compliance with record-keeping requirements imposed by the banking regulatory bodies.

Document management makes it possible to manage millions of documents and retrieve the right one in seconds, share documents with colleagues while protecting confidential information, e-mail and fax files instantly, access documents while travelling, publish documents to CD, DVD or the Web and back up files and records for disaster recovery which can be costly for a paper-based environment. The main benefits brought by the DMS are time reduction for accessing and retrieving information, improved customer service by accessing relevant documents faster, effective use of the available resources, reduction in the physical storage space devoted to archived printed documents and proper management of compliance issues as per legal requirements

In the Internet Age, documents have taken on new forms and paper is giving way to electronic formats. A document accessed via the web and linked to the banking system via the e-banking channel can dramatically streamline operations that previously required a series of manual tasks.

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The Document Management process is the conversion of paper documents and records to electronic files. This eliminates many obstacles created by paper, which are labour intensive, duplicate procedures, slow distribution, misplaced originals and inconvenience of retrieving files from remote locations. Operating expenses and overheads are reduced.

Document Management makes it possible to manage millions of documents to contain information that can be used at a later stage and thereafter be used for reference by other personnel joining the organisation. It also set the basis for Knowledge Management within organisation allowing sharing of valuable information from one office to another via the network.

Concepts like corporate governance and accountability of each stakeholder of the organisation is gaining impetus in Mauritius, specially, in the Banking Sector, where banks are now dealing with a host of new regulations and enforcement initiatives. Document Management has become critical in the effective implementation of new regulations and fully complies with the Code of Ethics and Corporate Governance.

There is a need for greater visibility and control of time sensitive and business critical information that is contained in many different documents and formats across the whole organisation. With foreseeable new and emerging requirements, banks need flexible and cost effective systems to meet present and future compliance requirements. An electronic document management system helps in addressing the requirements.

2.4

How is DMS related to the Banking Sector?

As discussed in Chapter 1, BOM has taken various initiatives in the past to improve the payment system and has now embarked on the Cheque Truncation project with the aim to enhance the clearing process and give RTGS its real meaning. The main objectives of introducing the Cheque Truncation System in Mauritius are: 1. To improve the payment system by reducing the clearing delay from two days to same day and settlement within short delay for large value cheques.

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2. To eliminate the physical movement of cheques through the Clearing house. 3. To introduce electronic archiving of the cheques and provide a standard platform throughout the banking sector to comply to the retention period as provided in the Banking Act 2004 and at same time reduce physical storage space. 4. To improve the traceability of cheques and allow financial institutions to respond more quickly to queries from customer and authorities. 5. To improve the internal process of banks in handling clearing instrument as it will enhance signature verification process, fraud prevention and ready access to electronic information [2].

The milestones for implementation are listed as follows: 1. Make an inventory of the existing systems at all banks, the Port Louis Automated Clearing House, and the MACSS. 2. Select a business model for the Cheque Truncation system in Mauritius based on various implementations in other countries and adopt or adapt it to Mauritian context. 3. Review of the existing network infrastructure in terms of communication, hardware and applications to accommodate the cheque truncation system and new settlement process. 4. Establishing the benchmark for selecting a service provider so that processing and security norms are adhered to by all banks. 5. Selection of a service provider by Banks within a prescribed delay and implementation of the system internally by all banks. 6. Implementation of the Cheque Truncation System in the Banking Sector.

Each component of the clearing system performs its part of the work and the whole process is time-barred with the two clearing cycles. The cheque truncation system, which is based on DMS, will facilitate the whole process.

17

2.4.1 The Present Clearing Process The clearing system in Mauritius operates as per the PLACH rules issued in November 2002.

Figure 2.2: The Clearing of Cheque process [3] The cheques have gone through a standardisation process and are MICR encoded and the security aspects of the cheques have also been dealt with during the implementation of MACSS. Figure 2.2 shows the present workflow within the current clearing system.

Step 1 Cheques deposited at various branches of the presenting bank are scanned centrally by the presenting bank and MICR data line are sent in the prescribed format and using a standard naming convention to the respective Paying bank using the MACSS network and secured directory arrangement at the Port Louis Automated Clearing House. Cheque images at the presenting bank are kept until the cheques are cleared and are subsequently destroyed after sometime as decided internally by each bank.

Step 2 A settlement file is also sent by all banks participating at the Clearing House that is used for processing by the PLACH.

18

Step 3 The Presenting Bank will exchange the physical cheques at the Port Louis Automated Clearing House during each clearing cycle. Two days after the date of presentation and if the cheque(s) has not been returned, the funds are made available to the customer. The cheque will take the value date as the date of presentation to the Clearing house but it will remain as uncleared balance on the account of the customer until it is cleared the next day second clearing after 3.00 p.m.

Step 4 The Paying bank will download the electronic file from its respective directory at the BOM server after each clearing cycle the secured login from MACSS terminal installed at each bank.

Step 5 Process on the banking system for (1) technical errors: signature verification, date and amount in words, payee bank confirmation etc; (2) for funds availability on the customer account (drawer). These processes are manual, except the transaction is upload on the core banking and those cheques coming under exception are treated manually for clearance or returns.

Depending on the archiving system already in place at paying bank, the presented cheques are scanned and matched against the electronic file sent by the presenting bank as to assure physical presence of the cheques in the batch and the images are kept for archiving at the paying bank.

Step 6 All cheques that have to be returned due to technical errors and lack of funds are done through the same process of MICR Line encoding and with appropriate cheque return codes at the second clearing cycle.

Step 7 If cheques are returned by the paying bank, the depositor account is reversed by the cheque amount and the cheques are returned to the customer. 19

2.4.2 The Port Louis Automated Clearing House The Clearing House monitors the process during each clearing cycle and hosts the electronic files from each bank in the secured directory until it is downloaded by the respective paying bank for processing at their end.

The interbank settlement after each clearing cycle is done by the PLACH and the transactions are effected on each paying bank and presenting bank account. The account statement for each bank can be viewed by each bank through secured login on the PLACH application via the MACSS terminal and effect the required settlement through SWIFT system. Figure 2.3 shows the different SWIFT messages formats.

Figure 2.3: SWIFT Message Formats

MT100 is the message format send for advising the receiving bank that a payment is being effected. Simultaneously during this message transmission using SWIFT a message format MT096 is sent automatically to MACSS advising the central bank to do the interbank transfer. In return the MACSS will send another message format MT097 to confirm the transfer. All the message transfers are done automatically. The transaction can be verified by the banks through the MACSS terminal set up at each bank.

20

The Banks operated under procedures laid by the MACSS and RTGS. Figure 2.4 and 2.5 shows the process flow within MACSS and RTGS.

Figure 2.4: Real Time Gross Settlement system

With the implementation of the RTGS, MACSS is extended to make high value transaction in a real time manner. A customer can give transfer instruction to his bank in favour of his supplier having account with another bank and the SWIFT messages formats will be exchange and the transaction will be done automatically and funds will be made available to the supplier in a real time.

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MACSS provides access terminal to each member bank to access its accounts at the central bank and to confirm the transaction being carried out once a transfer is initiated by the sending bank. The Figure 2.4 illustrates the different components of MACSS.

Figure 2.5: Mauritius Automated Clearing and Settlement System

2.4.3 Overview of Cheque Truncation System The Bills of Exchange Act was amended in 2004 through the Banking Act 2004 to allow, in addition to physical presentment of cheques, for presentment of cheques to be made electronically. For electronic presentment, the requirement for proper place or within a reasonable hour on a business day is not mandatory. Bank of Mauritius has recently provided banks with guidelines on outsourcing to services providers.

The following countries have already implemented or have initiated the cheque truncation system:a. Singapore - 2003 b. United States - 2004 c. Spain - 2000 d. Portugal - 2003 e. Hong Kong - 2003 f. New Zealand - 1995 g. Australia & United Kingdom - 1999

22

h. Canada - at project stage and will be fully implemented by 2008 i. India - 2004 j. Sri Lanka - 2004 k. Malawi - 2004

All the above countries have adopted basic business model and have adapted it to meet their legal frame work and operational work flow. A Cheque is an important document as it is the basis of financial transaction with the banking system. It is being physically transported from receiving bank to the paying bank for settlement. In the Cheque Truncation System, the physical movement will not be done in the same manner as cheque images will be exchanged. A DMS will be the infrastructure to be put in place to accommodate the Cheque Truncation System.

2.4.4 Document Management System - infrastructure for Cheque Truncation System The figure 2.6 shows the flow of the MICR data line and the images of the cheques from the presenting bank to the paying bank. Key features of the model that need to be considered as to apply it on banks existing MICR Cheque scanning system are:-

Figure 2.6:

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Step 1 The transfer of the images from the presenting bank to the paying bank through the existing communication links used for MACSS. The bandwidth needs to be upgraded as per requirement. The physical cheques are archived at a common warehouse by the presenting banks.

Step 2 Banks will be required to set up Cheque image system with the required security for transfer of images on the extranet to the paying bank and the image processing and archiving system for images of cheque received through the Cheque truncation system from presenting banks.

An Image Standard format for both side of the cheques need to be established taking into consideration the image storage size. The Grey scale technology can be used. The Cheque Image prior to transfer has to be secured. Security is of paramount importance to the cheque truncation system and the banking sector. The cheque image is captured at the point of deposit or scanned at a central point where it is 'sealed' and encrypted before transmission and make it tamper-proof. The sealing and encryption of cheque information and cheque image has to be complied with international standards and the transmission between the presenting, paying bank and the Port Louis Clearing Automated House should be authenticated by a certificate authority as part of the Public Key Infrastructure (PKI) [4, 5].

The MACSS extranet being a private network, Bank of Mauritius can host the Key Management server for the Public Key Infrastructure instead of using other PKI authentication authority like Verisign, which can be costly. Bank of Mauritius has already introduced digital signature mechanism for the electronic submission of return via email on the extranet. Step 3 Cheques returned for technical reasons or lack of funds will bear special version numbers and annotations for identifying the outward returns. Step 4 Cheques image will be returned to the presenting bank for returns to the customer. 24

Chapter 3: Assessment of Current Infrastructure within the Banking Sector

Financial institutions are under the authority of Bank of Mauritius to provide financial services to the general public and other institutions. These can be split into banks holding Banking License, institutions other than banks which are authorised to transact deposit-taking business and authorised money-changers and exchange dealers in Mauritius and Rodrigues.

3.1

Banking and other financial institutions

The Banking sector, currently, consist of 18 banks. Mauritian Domestic banking market is highly concentrated with four top banks accounting for almost 90% of the Banking Business and seven banks represent the 10% of the retail market. Formerly, eleven banks were primarily carrying out domestic banking (segment A) and seven banks were running offshore banking business (segment B). With the enforcement of the Banking Act 2004 and Bank of Mauritius Act 2004, both segment A and Segment B Banks are now operating under a single license.

The Banks are:1) Bank of Baroda 2) Banque des Mascareignes Ltee 3) Barclays Bank PLC 4) Deutsche Bank (Mauritius) Limited 5) First City Bank Ltd 6) Habib Bank Limited 7) Indian Ocean International Bank Limited 8) Investec Bank (Mauritius) Limited 9) Mauritius Post and Cooperative Bank Ltd 10) P.T Bank Internasional Indonesia 11) SBI International (Mauritius) Ltd. 12) SBM Nedbank International Limited 13) South East Asian Bank Ltd 25

14) Standard Bank (Mauritius) Limited 15) Standard Chartered Bank (Mauritius) Limited 16) State Bank of Mauritius Ltd 17) The Hongkong and Shanghai Banking Corporation Limited 18) The Mauritius Commercial Bank Ltd

The Financial market has evolved during the last decades and other financial institution are now authorised to transact deposit-taking business, deal in foreign exchange and act as money exchanger.

Non-bank Financial Institutions authorised to transact deposit-taking business are:1) ABC Finance & Leasing Ltd. 2) Barclays Leasing Company Limited 3) CLL Leasing Ltd 4) Finlease Company Limited 5) Cim Leasing Ltd 6) Global Direct Leasing Ltd 7) La Prudence Leasing Finance Co. Ltd 8) Mauritius Housing Company Ltd 9) Mauritian Eagle Leasing Company Limited 10) MUA Leasing Company Limited 11) SBM Lease Limited 12) SICOM Financial Services Ltd 13) The Mauritius Civil Service Mutual Aid Association Ltd 14) The Mauritius Leasing Company Limited

The Foreign Exchange Dealers are:1) British American Exchange Co. Ltd 2) Edge Forex Limited 3) Rogers Investment Finance Ltd 4) Thomas Cook (Mauritius) Operations Company Limited 5) Shibani Finance Co. Ltd

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The money-changer institutions are:1) Change Express Ltd 2) Max & Deep Co. Ltd 3) Gowtam Jootun Lotus Ltd [6].

The Banking sector with its 165 service outlets (commercial banks' branches) and 319 ATMs in the industry provides the financial services to customers. Around 780,000 ATM debit cards have been issued to customers to transact on ATM and POS (point of sales).

The Bank of Mauritius being the regulator of the banking market takes initiatives to bring innovations to the banking sector.

REGULATION

TECHNOLOGY

INVESTMENT

Figure 3.1: Three pillars for innovation in the Banking Sector

As shown in Figure 3.1, any innovation in the banking sector relies on the three pillars namely Regulation, Technology and the required investment by the Central Bank and the individual banks for implementation. Before bringing any change to the existing banking system, appropriate regulations and guidelines are put in place. The 27

participating banks are then required to select the appropriate technology and invest accordingly.

3.2

Documents used in Banking Environment

Document used at Banks

Financial Documents

Non-Financial Documents

Transaction based

Instruction based

Customer Related

Bank Related

Financial control documents

Statutory documents

Figure 3.2: Category of documents used

Different types of documents handled in the banks can be categorised into financial documents and non-financial documents. Figure 3.2 shows a general classification of different type of documents used in the banking sector.

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3.2.1 Financial Documents Financial documents are those that initiate a monetary transaction and all related documents to support the transaction. Transaction based documents are those that are created at the time of transaction to support the transaction (Table 3.1). Instruction based documents are those that initiate a transaction through instruction given by customer (Table 3.2). Financial control documents are those that are used to record the transaction for consolidation and tallying. Such documents are used at later stage for audit control (Table 3.3).

3.2.2 Non-Financial Documents Non-Financial documents are those that do not initiate a monetary transaction but are necessary to support data related customers, the bank itself and the statutory bodies. Customer related documents are those that are obtained from customer at the time of initiating customer-banker relationship and subsequent interactions with the customer (Table 3.4). Bank related documents are those that are used for the day to day administration and running of the bank (Table 3.5). Statutory documents are those that are created and used to meet the statutory requirement by the bank (Table 3.6).

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Table 3.1: List of Transaction based documents

Documents
Cash Withdrawal vouchers

Brief description
Pre-printed forms filled and signed by customers to withdraw cash from their accounts. At some banks these forms are computer generated at the time of transaction and is signed by the customer. Pre-printed forms used to deposit cash into the customer account and this form is duly filled and signed by the depositor and the receiving cashier. This form is also generated at the time of transaction through computer system at some banks. Pre-printed forms used to deposit cheques into the customer account and this form is duly filled and signed by the depositor and the receiving cashier. This form can also be generated at the time of transaction through computer system. The cheque deposit form is also MICR encoded to facilitate processing of cheques for clearing and input on the core banking application at some banks. Customer cheques are now printed using the cheques standard as described in the PLACH rules. All cheques are duly filled and signed by the customer and are presented at the drawee bank on the counter for cash payment or through the PLACH by the payee bank. The cheques, once cleared, remain at the custody of the drawee bank for a retention period as stipulated by the section 57 (4) of the Banking Act 2004. Transfer between account heads and cash payment for supplies and any other item are support by internal vouchers filled and signed by the officer preparing them and the officer authorising them. These vouchers are pre-printed or computer generated. Draft and travellers cheques are drawn by banks at the request of customer or for the payment related to other items. Banks also received draft and travellers cheques drawn on other local or international banks for encashment on the counter or credited to customer respective account. These drafts and travellers cheques are then sent for collection before funds are made available on the account of the customer. Electronic transfer files are exchanged among banks through the MACSS network to facilitate processing at the receiving end. These electronic files are supported by SWIFT messages and transaction done at the central bank on the bank's respective account. These files are used to credit accounts of customer at the receiving end. Electronic files with clearing details are used to debit customer accounts.

Cash Deposit Vouchers

Cheque Deposit Forms

Customer Cheques

Internal Transfer and Cash Vouchers

Draft and travellers cheques

Interbank Electronic Transfer File

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Table 3.2: List of Instruction based documents

Documents Customer Standing Instructions

Customer Application forms for Credit facility

SWIFT Financial Messages

Fax messages from Customers Cheque Book Order form

Brief description Customer gives written instruction to the bank for debiting account and crediting another account at the same bank, other banks, or send office cheque favouring another person on a frequency basis. These instructions are for a specific period or for an undefined period until further instruction from the customer. The core banking application of banks are equipped with standing instruction module to automate the transaction process. The initial written instructions act as source document for all the subsequent transactions until the termination date. This is an initial document used for processing any credit facility requested by the customer and used as a primary document. The application forms and the subsequent processing details are retained to support the credit facility requested. Such applications can be either in electronic format if received through the electronic channel or paper based. SWIFT Financial messages are received electronically by banks from any member of SWIFT and each member is identified by a Bank Identification Code (BIC). Funds transfers among banking institutions locally or international level are done through SWIFT messages. The SWIFT messages at some banks are processed automatically. Hardcopy of the messages are also used for passing the required transactions and messages are retained to support the transactions. The principle of nonrepudiation applies to SWIFT messages, that is, the sender institution cannot deny the messages sent as the security levels within the SWIFT system are in place. Fax messages are also used by customer to initiate transaction of urgent nature. Instruction from customer to issues a cheque book is done either on paper based form or can be done through other channels such as internet banking and ATM. The customer is debited with cheque book charges based on the cheque book order form.

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Table 3.3: List of Financial control documents

Documents Transaction registers

ATM transaction register and ATM Roll

Nostro and Vostro advice and statement

Import and export documents Cash Registers

Computer generated reports for internal control

Brief description All transactions are recorded on registers either electronically or manually. Details of the transactions such as date, transaction particulars, accounts debited and credited, the user posting the transaction and the user verifying the transaction are recorded. On electronic registers, each transaction is identified by a transaction id which identifies the transaction and facilitates queries at a later stage. Automatic teller machine (ATM) is a popular channel to perform cash transaction. Each transaction is initiated with ATM debit or Credit card and the associated personal identification number (PIN) known to the customer only. Each transaction is printed on journal roll within the ATM and is also kept electronically on the ATM hard disk. The journal roll at end of each day or at intervals is taken from the ATM and kept in safe custody for a defined period of time to support transaction done through ATM by customer. Nostro accounts are maintained by local banks at foreign correspondent banks and Vostro accounts are maintained by foreign banks with local banks. Any transaction between the local bank and the foreign banks are supported by advice through SWIFT or draft drawn on the correspondent bank. Statement of accounts at regular intervals is obtained to reconcile the transactions. Customers initiate import or export through documents. Payments are made by banks based on documents after authorisation of customer. Cash registers are maintained to support and tally the cash in custody of each teller or each branch. Maintenance of a cash register is a daily activity and the registers are signed by officials. Reports are generated through the banking computer applications for control purpose at all levels and thereafter these reports are signed for authentication and kept for future reference by the internal auditor, external auditors and the central bank inspection team.

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Table 3.4: List of Customer related documents

Documents Account Opening forms and KYC papers

Customer application forms for services

Customer Signature Card

Customer Letters (Inward/Outward correspondence) Customer Contracts

Security Documents

Information request from Customer and replies

Customer complaint forms and registers

Brief description Each type account opened for a customer is done through appropriate forms which are kept in safe custody of the bank. Additionally, authenticated copy of identification documents and proof of address are required. All such documents are retained for the lifetime of the account. Any changes thereafter are advised by the customer through support documents. Banks offers a gamut of services to its customers. When a customer requires any of the services, the appropriated pre-printed form or electronic form through Internet banking channel is filled in and submitted to the bank. Record of the customer signature is a mandatory document that is retained by banks as to validate the customer signature during any transaction initiated by the customer through a signed document. For ease of operation and for anywhere banking services, the customer signature cards are scanned electronically to make it available through its secured network to its teller personnel. The physical card is kept in safe custody. Letters from customers are processed and responded. These letters are kept for future reference in the customer file or general correspondence depending upon the issue being addressed. Any contractual undertaking between the bank and the customer is supported by document that are retained until the contract come to its end and thereafter as required by law or internal policy of the bank. Any credit facility given by the bank to a customer is backed by security documents which can be enforced in case of non payment of liability of the customer. These security documents are retained for the life time of the credit facility and need to be renewed after a lapse of 10 years as applicable. Customers are advised for any transaction initiated by bank on their account through advice. Customers also request for information through forms or letters and banks replies accordingly. Any document regarding such request is retained. Complaints from customers are received through forms and recorded in registers for action. Customers are, thereafter, informed.

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Table 3.5: List of bank related documents

Documents
Office orders, Circulars and letters Inter-departmental forms Access, Mail, Key and other registers

Brief description
For the day to day running of the bank, office orders, circulars and letters are issued for staff cognisance. These documents are retained until they are valid at the issuing point and receiving end. Inter-departmental forms are required to pass on instructions and these documents are kept to support the action thereafter. Registers to record the flow of personnel and customers, incoming and outgoing mails, key holders movement and other important issues that require control are maintained. These registers are, normally, kept manually except on instances were electronic recording is possible through magnetic swipe or proximity card. Internet e-mails are sent and received on different Personal Computers distributed over the network up to branches of the bank. Intranet emails are also exchange among personnel of the banks. All the emails are stored on Personal computers and depending on the nature of mail are archived to central repositories for future reference. Fax messages sent to branches and other organisations are kept at the originating point for further reference. Fax messages received from branches and external parties are sent to respective department for action. Non financial SWIFT messages are also interchange between participants for advising the recipient. These massages are acted upon at the receiving end and filed accordingly. All administrative documents created during the day to day running of the bank are retained for future reference. Employee related documents since the recruitment up to the retirement and communication thereon to the employee are kept under record. Notes of internal and external meetings, minutes of proceeding and other documents related to the meetings are kept as hard copy and these documents are duly signed. Papers put to board and board approvals are very important documents. These are duly recorded and signed for executives to act upon the decision taken at board level. Regular audits and inspections are carried out as per internal policy of the bank and as required by statutory provisions and reports are submitted for rectification in case of anomalies found. Audit and inspection reports are replied within the prescribed delay. All reports are kept in safe custody for further reference. For services offered by external agencies, maintenance contracts are signed by both parties to statute the undertaking of each party. These documents are retained for future reference. Contracts are also signed with suppliers of materials and these documents are subject to regular audit.

Emails sent and received

Fax sent and received SWIFT non financial messages Administrative documents Bank employee profile and related documents Meeting papers

Board papers

Audit and Inspection reports

Maintenance Contract from service providers Contracts with suppliers of materials to the Bank Bank's Investment and security documents Bank's tender documents

An investment portfolio is maintained by the banks to manage funds and perform treasury operations. Investment certificates and other security documents are involved in these operations and these documents have to keep securely and archived for future reference. Purchase and sale of any asset, maintenance and renovation are subject to tender process. All related documents are kept under safe custody and are subject to review during audit.

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Table 3.6: List of Statutory documents

Documents Bank annual financial reports Guideline from authorities

Bank's returns to authorities

Information requests from authorities

Brief description Banks publish financial reports and these documents are submitted to central bank. Guidelines from central bank and other authorities are received and circulated for adherence to bank's service outlets. Returns are sent to authorities at various frequency - daily, weekly, monthly, quarterly, etc Request for information from authorities are attended and information supplied as per banking regulations.

3.3

Archiving methods currently used by banks

Based on the internal policy, banks store documents and records for the specified retention period. Paper based documents are stored for limited period of time within an accessible area for immediate reference. Thereafter, depending on the nature, documents are transferred to the bank's archive. Electronic based documents, emails, transaction records, customer records etc, are back up on magnetic media, serialised and stored preferably at an off-site location. The retention period of each type of document will depend on the nature and as provided within the internal policy of the bank or as per the statutory requirement.

3.4

Document retention and legal framework

The Banking sector is regulated and conforms to various Acts of law and guidelines from the regulatory bodies provide the necessary framework for handling data and information in the Banking sector in Mauritius. Bank of Mauritius has issued various guidelines for banks to operate and adhere to good governance principle. Bank of Mauritius, Financial Services Commission, Registrar of Companies and Stock Exchange of Mauritius are institutions that supervise the banking operations.

Considering the statutory provisions, the different aspects of the legal framework for document management system to be put in place need to be explored. We need to

35

dwell on what document to be archived, the method of storage, place of storage and the period for which documents need to be archived.

3.4.1 Types of documents and the respective retention period The Companies Act 2001 In compliance with section 190, the following records shall be kept at the registered office of the banks. The constitution of the bank, an interest register, full names and addresses of the current directors, share register and copies of instruments creating or evidencing charges are required to be kept all the time. Minutes of all meetings and resolutions of directors, shareholders and director's committees, certificates given by directors, copies of all written communications to all shareholders for the last 7 years shall be kept. Copies of all financial statements and group financial statements for the last 7 completed accounting periods and the accounting records for the current year and the last 7 completed accounting period shall be kept at the registered office [7].

Banks should also comply with section 191 of the Act and the records of the bank shall be kept in English or French Language in written form or in a manner that allows the documents and information can be easily accessible and converting into written form [7].

Additionally as stipulated in section 193 of the Act, accounting records shall correctly explain the transaction of the banks at any time enable the financial position of bank to be determined with reasonable accuracy, support the financial statements and help proper auditing. The accounting records shall contain the income and expenses and the records of assets and liabilities of the banks. Accounting records not in English or French shall be translated within 7 days and kept with the original records during the retention period [7].

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The Banking Act 2004 In conformity with section 33, a full and true written record of every transaction a bank conducts should be kept. The records include accounting records explaining the transactions, state of its business affairs so as to enable the central bank to determine whether the bank has complied with all the provisions of the banking laws, financial statements, records showing transaction done by customers, at least on a daily basis and the balance owing to or by the customer, proper credit documentation and other records as the central bank may determine. The records shall be kept in written form or kept on microfilm, magnetic tape, optical disk or any form of mechanical or electronic data storage and retrieval mechanism as the central bank may agree to, for a period of at least 10 years after the completion of the transaction to which it relates. The records shall be kept at the principal office of the bank or such other place, in Mauritius, as may be approved by the central bank in chronological order or sequential order or in batches of convenient size for identification purposes [8]. As stipulated by section 57, where a cheque is not returned to the customer, the paying Bank shall retain the cheque for a period of at least ten years as from the date the cheque is drawn. After the period specified in the bank shall keep the cheque in a legible copy by the use of micro film, magnetic tape, or any such other form of mechanical or electronic data retrieval mechanism as the Central Bank may approve and the cheque may be destroyed by the Bank. The legible copy shall be kept for a period of at least 20 years as from the date the legible copy is made; otherwise, the cheques shall be kept for further 20 years in its physical state [8]. Section 60 specifies that a copy of any entry in a banker's books comprising of ledgers, day books, cash books, account books, records, financial statements or other documents used in the ordinary course of business of a bank, shall be prima facie evidence of such entry. The banker's books are either in written form or are kept on microfilm, magnetic tape, or any other form of mechanical or electronic data retrieval mechanism. It is important that the book was one of the ordinary books of the bank at the time of the entry and the entry was made in the usual course of the business of the bank and the book is in the custody of the bank. The copy of the entry should be

37

certified by a responsible person to have been compared with, and is a correct copy of, the original entry [8].

3.4.2 Electronic records and signatures The banking sector is technology-driven and banks keep the electronic records for transactions and supporting documents. The Electronic Transaction Act 2000 provides the legal framework to the above.

The legal effect, validity or enforceability of any record or signature shall not be denied solely on the ground that it is in electronic form and where any information or record is required in writing, an electronic record shall satisfy the requirement. Any electronic record shall remain accessible so that information contained therein is usable for subsequent reference. It shall be in its original form in which it was generated, sent or received with identification of the origin and destination and contained with the time stamps as to accurately represent the information. Furthermore, an electronic signature shall satisfy the requirement of signature of any enactment. Secure electronic records are those that are linked with a secure electronic signature capable of identifying the person uniquely and created in a manner or using a means under the sole control of the person. If, however, the electronic record has been changed, then the electronic signature would be invalidated.

Electronic records signed with digital signature shall be treated as secure electronic records. A digital signature is valid when it is created during the operational period of a valid certificate and is verified by reference to the public key listed in such certificate. The certificate should be issued by a licensed certificate authority outside Mauritius recognized by the controller authority. A local authority can also approved by the government to act as certificate authority [9].

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3.5

Access to archived document

All banks maintain have their own ways to store documents and archives of paper documents as per internal policy and legal framework. The ultimate objective of such a system is to access the required document within an acceptable time frame and by an appropriate person. Banks also ensure the safeguard of the document whether physically stored or electronically at least for the prescribed retention period until the records are destroyed or purged. The archived documents are accessed by the bank's employees for reference, by internal auditors, external auditors and inspection teams from the central bank and even from the holding company in case the bank is a subsidiary of a multi-national bank. The archives are also accessed by internal staff to reply to queries from Courts of law, ICAC, FSC and other authorities as and when required.

Section 192 of the Companies Act 2001 specifies that every director of a bank shall be entitled, on giving reasonable notice, to inspect the records of the bank [7].

Section 206 ensures that an auditor company is entitled to receive, from a director or an employee, such information and explanations as he thinks necessary for the performance of his duties as auditor [7].

Section 64 of the Banking Act 2004 stipulates that every person having access to the books, accounts, records, financial statements or other documents, whether electronically or otherwise shall take an oath of confidentiality. Additionally, this legislation provides a completed framework regarding the duty of confidentiality imposed on banks [8].

An electronic channel can be established for customers to have access to their archived information. Sections 51 and 52 of the Banking Act 2004 enumerate the necessary framework thereon [8].

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Chapter 4: Benchmarking DMS for Banks

DMS is primarily technology driven. Technology has been developing in the three main dimensions: Communication speed, Storage media and Processor speed. This has lead to various things that were thought to be impossible to happen in the last decades. Development in multimedia is one among so many. Although DMS provides the basics of scanning, retrieval and display, when it comes to implementing a document management solution in the real world, system essentials extend far beyond the minimum basics. DMS designed for multiple users, a high volume of documents, or multiple office locations must meet more stringent requirements.

Various service providers have developed electronic document management where image processing is one of its components. For selection of solution providers, we require a certain level of benchmarking as to the technology base used and whether such system is sustainable for the coming years. The criteria of selection are as follows: 1. Architectural considerations 2. Image scanning features 3. Image acquisition features 4. Archival of document images 5. Image security layer and image view 6. Indexing of images 7. Search and retrieval and access right 8. Security and user administration 9. Image transfer, delivery, distribution and data safeguard 10. Reports and audit trails features 11. System upgrade and after sales system support

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4.1

Architecture considerations

4.1.1 Usability One of the most important factors in how successful a DMS will be is its ease of use. Usability is critical in encouraging fast staff acceptance. A system will only be widely used if it is simple to capture documents, organize and find them. The best systems are user-friendly and flexible enough to adapt to the way people already work within a bank, rather than forcing them to change preferred procedures.

4.1.2 Interface design To guarantee that a DMS is readily adapted by users throughout a bank, it is important that the graphic interfaces for common operations, such as search and retrieval, be clear and easy to use. User-friendly interfaces not only assure rapid adaptation of a DMS by staff, but they also reduce training expenses associated with its implementation.

4.1.3 Workflow Workflow can increase the benefits of a DMS by automating the routing of documents to various people, which eliminates bottlenecks and streamlines business processes. This added functionality is more important for banks, which currently have central and branch offices.

Workflow should automatically notify specific users of document management related system events, based on rules created by the system administrator. Workflow should generate return receipts and timed responses. If a recipient does not act within a specific time frame, the program should send either a reminder message or a second message to an alternate recipient. An essential component in any procedural workflow system is document automation.

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4.1.4 Scalability A thin client is an infrastructure-friendly solution that minimises the burden of application installation, maintenance and software upgrades. The benefits of thin clients extend beyond conserving IT resources to expediting the search and retrieval of information over the bank's intranet or the Web. A Web browser based thin client must effectively deliver essential features to end-users without compromising system security

4.1.5 Multi-tier support with each tier fully independent Document management solutions, like any other network application, consume computer resources. Image files are large, and databases must track large numbers of records. Functions such as optical character recognition (OCR), image display and searching require extensive computing power. It is important to have n-tier architecture when more than a few people need access to imaged documents. Starting installation with a single-user implementation, it remains important that the DMS be able to accommodate future growth. An n-tier system delivers maximum scalability in departmental solutions and across the organisation with distinct client, business logic, data and document layers. Any network-connected storage media, including Storage Area Networks (SAN), can be used for physical storage, while multiple Standard Query Language (SQL) servers handle the distributed database layer. Tasks such as indexing, OCR and searching are distributed between the client terminal and the document management server for optimal performance. Some tasks are performed more efficiently on the client, while others are better handled by the central server.

An n-tier system can perform searches much faster, since the server machine is typically more powerful than individual workstations. File-sharing systems send a copy of the entire database over the network to the workstation, which then performs the search. This method leads to an increase in network traffic and search response times that are dependent upon the speed of the PC workstation.

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4.1.6 Multi repository storage for image Scanned or electronic document can be stored at source where it has been created and can be searched and accessed through network. A DMS provides for multi storage repositories for storing images of document at a single location or at various distributed locations.

4.1.7 Platform independent Computer systems run on various platforms such as SUN Solaris Unix, Windows, Linux, AIX etc. A DMS is platform independent and can be installed on various platforms. Java Technology based DMS provides portability of application over various platforms.

4.1.8

Support for Databases

A DMS is ODBC compliant and can be connected to Oracle, MS SQL database or other databases for storing image data and allowing faster access to document and manage the audit trail requirement.

4.1.9

XML Technology based

XML stands for eXtensible Markup Language used to describe documents and meaningful tags within application. This technology helps document processing and data interchange and has been developed by the World Wide Web Consortium (W3C) and has defined within ISO standard 8879:1986. It enables set up of Domain-specific vocabulary, data interchange, smart searches, user-selected view of data and granular updates.

4.1.10 Image processing libraries for supporting compression and extraction The size of the image of document being handled is an essential feature to consider as to decide on the storage capacity and size of data the DMS solution can provide. Inbuilt libraries in the DMS to provide for compression of image and extraction at the user end is essential to speed up accessibility of image file over the network.

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4.1.11 Robust System Administration System Administration within a DMS should provide for user level control, storage of data controls and network controls. Depending on the criticality of information, the level of access and the security around should be manageable within a DMS.

4.1.12 Integration with existing application The introduction of new software and databases often creates logistic challenges for the computer support staff. Document management programs should offer packaged integration tools for simple image enabling in order to minimise the burden on computer support staff. To minimise disruptions to business operations, it is essential that a DMS integrates smoothly with core banking applications and other software applications within the bank. This enables anyone to create add-on products to connect the hardware or software to other devices.

Universal Data Access (UDA) compliance conformity to a single application program interface designed by Microsoft that allows users to combine data from different databases made by various manufacturers

4.1.13 Automatic Archiving of image Data availability within a DMS is a critical component that needs to be considered. A DMS should provide an automatic archiving mechanism so that image of document is made available and archived automatically.

4.2

Image Scanning Features

4.2.1 Capture For a DMS to enhance business operations, it must accommodate all the types of documents, paper, electronic, fax, emails etc. that are part of a banks processes and procedures. It should also enable the batch processing of documents and forms in instances where high-volume processing is part of business operations.

It is important to ensure that a DMS permits users at both central and branch offices to capture and access documents as necessary. Full-featured systems allow

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documents to be scanned into the system and transferred into the database at different times so as to minimise traffic demands on the network during peak business hours.

Annotations permit users to append or remove information about a document that has been captured without permanently changing the original image. Highlighting, stamps, redactions (black-outs or whiteouts) and sticky notes are among the most common annotations. A DMS's security should give the system administrator control over the users who can view annotations and see through redactions.

In order for the document to maintain its integrity, all annotations should be overlays that do not change the actual image. This way, a document can be printed with or without the annotations. For a document stored in the system to stand up as the best copy of a record, users must not be able to modify the original image.

4.2.2

Facility for bulk scanning

Banks having a significant volume of images to scan during a day will benefit from a batch processing scanning system. When large numbers of documents need to be brought into the DMS daily, it is inefficient to process each one individually. A fullfeatured DMS allows files and records to be brought into the system in one batch to speed up the process.

Once all the pages have been captured, the system should let users easily group them into appropriate documents before assigning index fields and moving them to their appropriate folder location. The system should make it possible for pages to be rearranged, removed or added to a document to correct any mistakes that may have occurred in the organisation of a file. Similarly, it should be simple to update or add index fields at a later time.

4.2.3 Client-server architecture for storage A full-featured DMS allows users to simply drag and drop the appropriate DMS folders into a briefcase and transfer the briefcase to a laptop computer or a computer in a remote office.

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Portable volumes are high-volume briefcases that allow for constant updates to shared document management databases in different locations. This ability is useful for banks that use a service bureau for scanning on an ongoing basis or scanning is done at the banks with multiple branches. On many large-scale DMS, the document files are stored on multiple drives or network volumes. Portable volumes allow entire volumes containing document images and text to be transferred in mass to another database. This avoids network congestion during peak hours.

4.2.4 Multi-stage control over the process to assure quality of image Control over quality of image is important. Once a document is scanned it should represent a true copy of the document and will have a life time as per the retention period specified within the organisation document retention policy or as per the statutes. Multistage control over the process of scanning will ensure quality of the image at source.

4.2.5

Automatic indexing and OCR capabilities

Document retrieval and search is done using index fields set during scanning. A DMS should have an automatic indexing feature based on OCR to detect areas on documents that can be used for identifying the documents.

4.2.6

Compression of scanned Image files appropriate format

The use of standard format such as Graphic Interchange Format (GIF), Joint Photographic Experts Group (JPEG), Tag Image File Format (TIFF) and Portable Network Graphics (PNG). The choice of the format type will depend of size of the file, quality of the image, portability and the security features that can be attached to the image. The three most common file formats, the most important for general purposes today, are TIF, JPG and GIF. Table 4.1 shows the best file types for these general purposes.

TIFF is the undisputed leader when best quality is required. TIFF is the format of choice for archiving important images and is flexible with many options. TIFF is very commonly used in commercial printing or professional environments. TIFF is the most universal Web pages require JPG or GIF or PNG image types, because that is all that browsers can show. On the web, JPG is the best choice (smallest file) for photo 46

images, and GIF is the most common for graphic images. TIFF is the most universal and most widely supported format across all platforms, Macintosh, Windows, Unix and Linux.

Several compression formats are used with TIFF. TIFF with G3 compression is the universal standard for fax and multi-page line art documents. TIFF image files optionally use LZW lossless compression, there is no quality loss due to compression. Lossless guarantees that the image can be read back exactly the same as the time it was saved, bit-for-bit identical, without data corruption. Most compression formats are lossless except JPG and Kodak PhotoCD PCD files. TIFF files for photo images are generally pretty large. Uncompress TIFF files are about the same size in bytes as the image size in memory (3 bytes per pixel). The JPG is wonderfully small, often compressed to perhaps only 1/10 of the size of the original data and this makes is very much portable on the web. JPG uses compression with losses in quality and this quality can never be recovered.

PNG was designed recently, taking the past experience with other formats as advantage. The original purpose of PNG was to be a royalty-free GIF and LZW replacement. However PNG supports a large set of technical features, including superior lossless compression from LZ77 (ZIP method). PNG, because of its lossless compression is well suited for master copy data and is a noticeably smaller file than LZW TIF (25% smaller than TIF LZW for 24 bit files).

For comparison, a 9.9 MB 1943x1702 24-bit RGB colour image will have the following size using the different filed formats: 9.9 MB TIFF, 8.4 TIFF LZW, 6.5MB PNG, 1 MB JPG, 9.9 MB BMP. It seems that PNG is an excellent replacement for TIFF [10] - [12].

4.2.7

Automatic batch creation capabilities

A DMS should facilitate automatic creation of folders and subfolders using a predefined naming convention that can be parameterised during application set up or during start of a batch. As applied within banking environment, a tree folder structure for all documents related to a single customer is desirable.

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Table 4.1:

4.2.8

Web based scanning facility to support high volume

Web based scanning is not a current feature that comes with different models of scanning. Java Technology has enabled portability of scanned documents through network in a secured manner.

4.3 Image Acquisition Features

A DMS should have the Image acquisition features to import bulk of images from another system with automatic indexing during import, to directly upload images facility from a file system, to schedule upload using parameters, to maintain security check during import and to merge batches before processing with complete user level tracking mechanism.

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4.4

Archival of document images

4.4.1 Support commonly used format The non-proprietary formats available for storing document information are ASCII (since 1963), a basic building block for practically every text-based program and TIFF (since 1981) for graphics and widely used to transmit document information by DMS, fax machines and other software. DMS suppliers should provide conversion routine if new formats are available in future. PNG is a promising file format to be considered.

4.4.2 Portability DMSs should enable users to carry important documents anywhere for convenient viewing on other computers. With a DMS that supports briefcases or portable volumes, documents can be detached or copied and moved to other databases in other locations. Document management folders containing relevant documents can be transferred to other databases quickly and easily using searchable CDs and DVDs.

4.4.3 Linking capabilities of images and documents The records management within DMS must allow users to indicate related records through linking, a form of metadata that defines and establishes relationships between documents. It should allow document links to be established by all users at the time of filing, but only authorised users should be able to create, modify or remove links post-filing. If a record has multiple versions, it must also clearly indicate which version is the most recent.

4.4.4 Document control through locking mechanism during editing A document while being edited should be locked or frozen to other users and should give read access only. Audit trail for modified document should be kept within the system. DMS should provide version control on scanned documents.

4.5

Image security layer and Image View

Security linked to the scanned images is very important to avoid tampering. A DMS should support document view through applet and native application, digital signature

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at the time of scanning and image stamps facility, user name and time stamp on image particulars with annotation applied by users at different security levels, encryption of image during transfer over network, zoom in, zooming out and other features like rotate, invert etc. and printing of images with tracking and audit trail.

4.6
4.6.1

Indexing of Images
User defined indexes

For high-volume scanning operations, documents can be tagged with barcode to provide for indexes prior to scanning. Bar codes index documents by extracting fields from an external database, by filling in fields with pre-assigned values, or by associating certain documents with a particular index template. Bar codes can act as markers to indicate the beginning of a new document, automating document separation. While bar codes require some preparation, their benefits can be enormous.

4.6.2 Mandatory Unique field For the purpose of identification of any document, a unique reference has to be associated to it within a DMS. A mandatory unique field is important to provide identity to the document for the entire lifecycle of the document.

4.6.3 OCR functionality Zone OCR on document reduces data entry time and demands on system memory. Zone OCR saves time through automated document indexing that reads certain regions (zones) of a document and then places information into the appropriate index template fields. The amount of required storage space is also reduced because OCR and indexing are applied only to responses that have been entered. To minimize errors, the system should allow the user to set a minimum percent accuracy level for OCR. If any portion of the form does not meet this standard, the system should notify the user so that a staff member can read the form and manually enter the correct field information

Additional to the above, automatic full text indexing for TEXT search and index to allow searching on profile information like accessed times, name, and created by etc. should be an in-built feature of a DMS.

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4.7

Search and Retrieval and access right

Extensive Search facility to retrieve images in multi-user environment by defined users with the appropriate access rights is an essential feature that has to be provided within a DMS. Search mechanisms should allow users to get the required information within seconds.

4.7.1

Fuzzy Logic

Most searches assume that the search words have been spelled correctly and perfectly indexed by the OCR process or during the manual entry of index fields. Unfortunately, people frequently misspell words, and no OCR process is 100% perfect. Fuzzy logic compensates for these errors by searching for spelling variations. A DMS should allow the user to control the search by setting how many letters can be wrong or what percentage of a word can be wrong. For example, a fuzzy logic search for "goat" would find "goat", "gout" and "coat".

4.7.2

Wildcards

Wildcards are characters, like the asterisk (*) and the question mark, which can be used in searches to compensate for misspellings or unknown spelling. The asterisk stands for any character or characters, while the question mark stands for any single character. For example, searching for "c*t" would find the words "cat," "cot," "coat," "cut" and "chest." Searching for "c?t" would only find the words "cat," "cot" and "cut."

4.7.3

Boolean Operators

Whenever full-text searches are performed, there are usually several documents that meet the search criteria. Boolean operators (AND, OR and NOT) help fine-tune searches and reduce the number of unrelated documents on the results page.

4.7.4 Proximity Searches Proximity searches can also be used to narrow the search results. They are used to find words that occur within a certain number of words, sentences or paragraphs of each other. For example, to find documents relating to tobacco lawsuits, but not

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smoking ordinances or tobacco growing, users could search for "tobacco" within one sentence of the word "lawsuit."

4.7.5

Result of Searches

The results of the search must be portable to text or other format for reporting by auditors. The way in which the results of searches are displayed has considerable impact on the usability of a DMS. Even the most specific full-text searches can produce several hits when large document databases are involved. In addition to providing users with a list of documents that meet their search criteria, the DMS reveals lines of context that display each occurrence of the search word in each document. Lines of context help users pinpoint the appropriate document without having to view every document in the search results.

Once a document is identified, the search word needs to be located within the document. To help with this, some DMSs display the appropriate page of the document and highlight the search word in both the text and on the document image. This makes it easy for the user to immediately zoom in on the relevant section instead of having to look through multiple pages of a document. The search and results need to be recorded for audit trail within the system.

Moreover, a DMS should provide for combined search on profile, indexed and fulltext search, search by name created, modified or accessed times for any particular image and customer based search for images linked to particular customer of the bank.

4.8
4.8.1

Security and User administration

User Login Administration

Security is critical to the successful implementation and ongoing protection of a DMS. While security may not be the primary concern for a single department installation, it becomes more important as the system is expanded to allow different departments, and even the public, to access files. A DMS should provide multiple levels of security including authentication, authorisation, audit trails, and disaster planning. The system's security should parallel to that of the network and be simple to

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administer. Login id and encrypted password with a minimum of 68 characters for each user will enhance authentication.

Authentication is the level of security that requires users to present credentials, normally a user name and password, in order to access the system.

Authorisation is the level of security that controls access to objects (files, folders, etc.). Authorisation encompasses two primary areas: access rights, which determine the objects users can open, and feature rights, which determine the actions that users can perform on the objects to which they have access.

4.8.2

User Access Right Administration

A DMS should let the banks assign access to specific folders, as well as specific documents, at both the group and individual level. The use of groups with inherited, or predefined rights allows system administrators to quickly assign viewing privileges, while individual-level security allows specific users such as managers to also view documents that the rest of the group cannot. A full-featured DMS will not allow users to see objects for which they do not have viewing privileges. This protective feature is especially important for organizations whose systems contain confidential files and folders

DMS should also let system administrators limit the actions that users are entitled to perform on folders and documents at both the individual and group level. Feature rights determine a range of actions, including adding pages, annotating, copying, or deleting records.

4.9

Image transfer, delivery, distribution and data safeguard

DMS must provide efficient ways of getting information out of the system on the level of the individual document. Printing, faxing and e-mailing documents are several ways of doing this. DMS should promote the rapid copying of files to a CD or DVD. To be most effective, the DMS should support royalty-free CD or DVD duplication and contain viewers that enable people without a DMS to search for and view documents on the disc.

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To maximise its usefulness, DMS should support the most common printer and fax drivers and be able to print images, text and annotations.

E-mail has become the default mode of communication in banks. Banks obtain significant gains in efficiency and save considerable expense by transmitting documents via e-mail instead of using faxes, courier services or the postal service. DMS should have options that make it possible for images to be easily sent. DMS should be compliant to Mail Application Program Interface (MAPI).

A DMS should provide a simple way to publish information to the Internet or an intranet. This allows organisations to share information with other departments, remote offices, clients or the public. Web systems should be fully searchable and must support the same security protocols as network systems. Ideally, a DMS will require no Hypertext Mark-up Language (HTML) or complex coding to post files to the Web. A DMS can provide directory services with single sign on, support for multiple images delivery methodology (batch transfer), system fail over with auto CD viewer for distribution on CD in case of system failure, replication of data to the remote Disaster Recovery Site through the application, incremental back up of data and audit trails and safe recovery architecture.

Digital archiving with a DMS simplifies disaster recovery planning by allowing backups of entire document repositories to be stored on durable CDs, DVDs or other media. In the event of document loss or damage, archives can be reconstructed from digital backups. The solution should also provide built-in viewers on published CDs and DVDs. This allows immediate document access from any PC with a CD or DVD drive even if the network remains offline for an extended period.

4.10 Reports and Audit trails features

As an additional level of security, a DMS should offer the ability to generate audit trails and reports that detail system activity. A DMS should be able to log all users, documents viewed, actions performed and the time at which the actions were performed. A full-featured DMS will log unsuccessful attempts to perform actions

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and provide electronic watermarks to authenticate printed documents. Audit trail abilities are especially important when a bank has many different users and confidential documents; audit trails also play significant roles in demonstrating regulatory compliance. Standard reports and tools to generate customised report need to be in-built in any DMS.

4.11 System upgrade and after sales System support

The service provider should provide after sales support in a prompt manner and the service level agreement should be clearly defined and set to safeguard banks. Banks embarking on DMS linked project cannot afford to have a system that does not provide an efficient system support. Most of banking operations are time barred and also require securing level though out the different delivery channels [11].

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Chapter 5: Research on DMS within banking environment

5.1 Research Objectives
The following questions were defined as our research objectives: 1. To evaluate the current Document Management System in place in the Banking sector. 2. To assess the retention period of the different types of documents within the banking sector to warrant an electronic document management system. 3. To assess the readiness of banks to embark on a fully integrated document management system

The Investigating questions: 1. How are documents presently handled at banks? 2. How are computer applications being used to generate documents electronically? 3. To what extent is the Collaborative Suite being used for document sharing? 4. How are documents being stored and for what retention period? 5. At what frequency are archived documents being accessed? 6. To what extent is Document Management System understood within the banking sector?

5.2 Methodology
The banking sector consists of 18 Banks with the Bank of Mauritius as the central bank. All banks were subject to the survey through members of the Banking Committee's IT Sub Committee. A home page (see Appendix A) for the survey was designed and deployed on my personal website. This Questionnaire has been primarily designed using Hyper Text Mark-up Language (HTML). The questionnaire form has been deployed in three formats: - PDF, HTML and an electronic survey form which has been designed in PHP. PHP is a server-side HTML embedded scripting language. It provides web developers with full suite of tools for building dynamic websites. The electronic web form for this survey has been designed and deployed on web server hosted by Mauritius Telecom. The respondent, after filling

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his/her selection, completes the form by clicking on the "submit" button. An email with all the selection is automatically sent to the following address:

soodesh@intnet.mu. A copy of the questionnaire can be found in Appendix B. Printed questionnaires were also handed to the IT Managers/Head of IT members present at the Banking Committee's IT Sub Committee held at Bank of Mauritius.

The data from the Questionnaire has been planned to be used for descriptive analysis. The banking sector as regulated by the Banking Act 2004 is very stringent on the confidentiality clause. All information provided will therefore not be disclosed and will only be used to understand the present documentation management system and build a holistic picture of the banking sector (refer to Appendix A).

5.3 Data Collection Method

The primary data collection method has been through a survey questionnaire that was filled by IT Managers of all banks. They were handed a set of questionnaire during the last meeting and were requested to fill in the form and return it. The Questionnaire was deployed on the following website http://pages.intnet.mu/skgb/survey.html and all banks were to fill in the e-survey form online. An e-mail (Appendix C) was sent to all IT Managers to this effect, where they were requested to fill in the survey.

The respondent was requested to either download the questionnaire provided in both PDF and HTML format and fill in same and forward it to the postal address mentioned on the form or access the e-survey online and fill in the form by mouse click and, on completion, to click on the "submit" button. The dynamic webpage would automatically be emailed to the recipient email address. Out of 19 banks including Bank of Mauritius only 16 banks have participated and all questionnaires were filled in electronically through the e-survey form.

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5.4 Results and Discussion

Data has been collected through the 16 questionnaires and processed using EXCEL to tabulate the results. So as to conform to the confidentiality agreement as per Section 64 of the Banking Act 2004, the results have not been disclosed in its form but a descriptive analysis of the findings is instead discussed for each section of the questionnaire. 5.4.1 Existing Document Handling Infrastructure This part of the survey assesses the way documents are being handled by the target population.

General Document Management Considering the retention period of documents within the banking environment which is 7 years for all companys records as discussed in Chapter 3 and specific to the Banking Sector as provided by the Banking Act 2004, it is 10 years for all documents except cheques which are subjected to a further 20 years.

The survey showed that 80% of the banks do maintain a physical archive for their documents and that the average storage space for the archives is 2,200 square feet. As far as the electronic archiving is concerned, this is maintained by 50% of the banks and the average electronic storage space of documents per bank is 150 GB.

70% of banks mentioned that they maintain their archives centrally with the appropriate system to register the movement of items to the archive and to control access of documents once it is archived. The frequency of access to archives ranges from monthly to yearly. The average number of access per month to the archived documents is 15. 90% of the banks maintain their own archives and 10 % have outsourced the service.

Maintaining physical archive is a costly item which the banks cannot avoid but the storage space can be reduced to a minimum. Only very important documents that are required to be stored in its original format have to be stored and all the other documents can be converted in image format with the appropriate security features through a DMS. The Banks' archival policy may be revisited to address the issue. 58

Cheques handling More specifically related to cheques, some questions were included in the questionnaire to address the way cheques are being handled from a document management perspective.

From banks that issue cheques, it was found that 70% of the banks have a cheque scanning system in-house and they scan all outward clearing cheques. 50% of the banks retain the images of the outward clearing cheques.

Banks process the inward clearing cheques and debit the respective customer account using the electronic data file exchange among themselves through the Port Louis Automated Clearing House after each cycle of clearing. 40% of banks involved in this process scan the cheques again at their end for archiving images.

10% of the banks send the physical cheques along with the statement of account of the customer. Those banks are required to scan and maintain the archives of cheques at least for a certain specified period.

60% of the banks maintain a typical standard for the scanned images in terms of file size and quality of image and they do it through software application while monitoring the scanning process of cheques and through access of images at a later stage. 40 % of the banks use encryption to safeguard the images from being tampered.

The MICR line being unique for a particular cheque can be linked to the cheque image for indexing purposes as to facilitate search at a later stage. It was found that 60% of banks are doing so. All banks involved in the clearing process have confirmed that the MICR data line is encrypted before it is transmitted to other banks. The above results shows that documents are being managed as per each bank's internal framework and a DMS, if put in place, will surely set standard to the way document will be handled in the banking sector.

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5.4.2 Usage of Computer Applications to generate documents This section deals with the usage of computer applications to create documents during the day to day running of the bank and will indicate the portability of the electronic document into the DMS.

Table 5.1: Summary of survey results related to computer application usage

Do not Use Microsoft Products 2.1 Spreadsheet EXCEL 2.2 Word Processing WORD 2.3 Access Database 2.4 PowerPoint 2.5 Publisher and other graphic software Products linked to Core Banking Software 2.6Consumer and Corporate e-Banking 2.7Treasury/Wealth/Cash Management Software 2.8Anti Money Laundering Software Other Applications 2.9Accounting Software 2.10Imaging/Scanning Software 2.11Adobe Software Utilities

Occasionally Used

Frequently Used 100% 100% 20% 70% 20% 50% 30% 50% 60% 70% 60%

20%

60% 30% 80%

50% 50% 40% 20% 10% 10%

20% 10% 20% 20% 30%

Microsoft applications are most commonly used in banks to create documents. The survey results show that Excel and Word are frequently used to do so. Other Microsoft applications like Access Database, PowerPoint, Publisher are occasionally used to generate electronic documents.

The Table 5.1 shows the extent different software are used to generate document within the banks. It is important to note that all documents created can easily be imported in a DMS, thus eliminating the scanning process. Some documents need to be scanned after they are physically signed and in such circumstances scanning is unavoidable.

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5.4.3: Usage of Collaboration Suite for Document Sharing The use of the document sharing is a common way of reducing paper movement within an office environment. Use of internet or intranet mails is one of the ways document can be shared. There are other tools that help collaboration among the bank staffs. Table 5.2: Summary of results related to usage of collaboration suite

Do not Use Do you use the suite of programs for 3.1 Email and Managing Contacts - Address Book 3.2 Calendar - Schedule/Planner/Events and group Calendar 3.3 Task Management 3.4 Web Access 3.5 Internal Directory services 3.6 Public Documents Sharing of Information 3.7 Intranet Portals 3.8 e-Circular to Employee 3.9 Internet email to customer 3.10 Bank's Website

Occasionally Used

Frequently Used 100%

20% 60% 30% 60% 50% 10% 10% 40%

80% 40% 60% 20% 40% 60% 60% 50% 90%

10% 20% 10% 30% 30% 10% 10%

The above table shows that emails are frequently used by all banks and other collaboration programs are used depending on the banks requirement to a certain extent.

5.4.4: Document currently used and stored If we consider the different types of documents being used in the banking sector it would have been enormous. For the sake of classification, the documents have been categorised into two main groups financial and non financial. This section assesses whether these documents are being commonly used, the method of storage and the retention period associated with the different types of documents geared by the internal policy of the bank or the legal framework.

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The survey depicts the following:a) 73% of the documents stated in the survey are being commonly used by all banks and no additional documents were added to the list by the respondents. b) 48% of the documents are stored as hard copy, 5% in electronic format and 33% in both hardcopy and electronic format. c) The legal framework stated thereon by all the respondents was 10 years for both legal requirements and the internal policy of the bank.

5.4.5: Access to Archived Document This section assesses the frequency at which the documents once archived are being accessed. The results show that 4 % of the documents are never accessed once they are archived, while 86 % of the documents are accessed occasionally and 10 % of the documents are frequently accessed.

The above results show that 96% of the archived documents are occasionally subject to accessibility. Accessing an archive physically involves cost factors in terms of transportation, man power and security. A document management system with an inbuilt archive application can allow access in a secure manner within seconds without literally involving any cost factor. Additionally, if we want to provide for contingency in case of a disaster, it is practically impossible to duplicate the paper-based archives to be stored in another remote site. As for the electronic version of the archive, it can be stored on servers even on the other side of the globe and still provide access within seconds.

5.4.6: Document Management System This section dwells on the knowledge about the benefits that a DMS can provide to the office environment. The benefits have been formulated in terms of statements. The results show that 83% of participants are aware of the benefits of a DMS, 5 % do not agree on some statements and 12% are neutral to some statements.

This shows that more than 80% of the participants are well verse about the benefits that can be derived from a DMS.

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5.4.7: Other findings The surveys show that 50% of the banks have been established for more that 20 years. 14 of the banks are subsidiaries of multinational banks. The banking sector presently has 165 service outlets and 319 ATMs within the network. The Internet, mobile, phone banking, emails and kiosk are also being used by some banks to service the customers.

Those banks who have gone for electronic service channel have document management capabilities in-built in the software application to support the electronic channel. An extension of the existing infrastructure will surely provide for fully integrated document management system

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Chapter 6: Conclusion and Recommendations

Based on the survey results, it is found that all banks have initiated document management system in one way or the other but the level of full automation has not yet been reached. Space coverage for physical archive to an extent of 2,200 square feet is considerable, compared to a 150 GB on average per bank of archived data on electronic media.

The implementation of the cheque truncation system will build up the framework of an automated document system, taking into consideration all the basic aspects in terms of security, business continuity, document (Cheque) archiving, network communications, customer delivery channels, hardware infrastructure, human interface, acceptability and process automation. The same system extended to other documents within the banks will lay the foundation of a fully integrated electronic document management system and help banks deploy resources towards effective business channels [13].

In general, the banking sector is changing very dynamically. I believe that what happened in UK some years back will now happen in Mauritius: a complete change in the dynamics related to technology, communication and empowerment of people towards e-services.

Banks need to adopt the internet channel in an integrated manner for delivery of its services to customers. The basic of such an integrated system is a complete automation of the back end processes and streamlining of paper based activity to an electronic workflow. This will improve on the delivery time of services within 24 hours for any process that was taking a week or more. This is only possible with the implementation of a fully electronic document management system coupled with the business workflow.

On the other hand, the government in its vision to make Mauritius a cyber island and a regional hub is investing in technology, communication and empowerment of people with required knowledge to use the technology as tools in their daily life.

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Initiatives to reduce the cost of ADSL connection, to use the post office distributed around the islands for internet access, introducing free internet connectivity at schools and colleges among others initiatives will surely create acceptance for internet as channel for citizens to interact on the government online portal and get the services online and banks can benefit from it.

The most accessible channel for the Mauritians in the near future will be the internet and all businesses should turn around this to get maximum benefit out of it. Banks have always been considered to be the first mover to adopt technology in providing services to meet the market needs of today and the near future.

Figure 6.1 shows the various interactive forces that are influencing the Banking service sector today.

Figure 6.1: the banking services sector and interaction with forces [14]

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Currently, some banks are providing services through the internet platform such as checking balance, viewing statement of account and some historical data to their customers.

The interactive internet banking where customers having control over their accounts in terms of services like accounts amendment, ordering cheque books online, transfer of funds, payment of bills to third parties, online creation of standing orders or direct debit, online ordering and printing of statements, instant messages sending or notification and pay credit card bills have not yet picked up.

Other internet-based services like opening of current accounts, savings accounts, and application for other services are still taken as a back end process though input is done online.

DMS will provide the workflow necessary to automate many of the processes that require considerable human resources for completion and each of these processes will be supported by electronically/digitally signed documents that can be used for any further queries.

Based on these findings, I would recommend that implementation of DMS be given a hard thought to further improve the banking sector and create a sustainable platform for better customer services.

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Appendix A

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Appendix B

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Appendix C

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References
[1] Michael Raynes. (2002). Document management: is it the time now right? [Online]. Available:http://www.emeraldinsight.com [2006, June 30].

[2]

Bank of Mauritius, 2006. Presentation on Cheque Truncation System

[3]

Newgen Software Technogies Ltd. (2004). Solutions for business process & Document Management - OmniDocs. [Online]. Available:http://www.newgensoft.com [2006, July 5]

[4]

RAFAEL C. GONZALEZ and RICHARD E. WOODS, 2001. Digital Image Processing, Second Edition, Prentice Hall, Inc.: U.S.A

[5]

ATUL KAHATE, 2003. Cryptography and Network Security, First Edition, McGraw-Hill Publishing Company Limited: India

[6]

Bank of Mauritius. (2006). List of Authorised Banks, Non-bank depositTaking Institutions, Money-Changers and Foreign Exchange Dealers. Available: http://bom.intnet.mu [2006, September 10]

[7]

The Companies Act. (2001). [Online]. Available: http://www.gov.mu/portal/goc/compdiv/file/ca2001fin2006.doc [2006, August 18]

[8]

The Banking Act (2004). [Online]. Available: http://bom.intnet.mu/BankingAct2004FINAL.pdf [2006, August 18]

[9]

The Electronic Transaction Act. (2000). [Online]. Available: http://www.gov.mu/portal/goc/telecomit/files/etb.doc [2006, August 18]

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[ 10 ] KENNETH C. LAUDON and JUNE P. LAUDON, 2004. Managing the Digital Firm, Eighth Edition, Prentice Hall, Inc.: U.S.A

[11]

Laserfiche. (2004) Document Management Overview [Online]. Available: http://www.laserfiche.com [2006, September 15]

[12]

Wayne Fulton. (2005). Image File Formats - which to use? [Online] Available: http://www.scantips.com [2006, November 24]

[13]

Chanaka Fayawardhena and Paul Foley. (2000). Changes in the banking sector the case of internet banking in the UK [Online]. Available: http://www.emerald-library.com [2006, July 25]

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