How Do Banks Organize So Many Loan Documents?

To get a mortgage loan from a bank, you need to prepare over 50 pages of documents, including a copy of your register, documentary evidence of your income, an application form, a written contract, and a copy of your resident card. Credit loan documents are also lengthy, at least 15 pages per case.

How does a bank classify the flood of documents and find them without much effort?

In the past, loan documents were kept in a bank safe, which made looking for loan records very time consuming.

Nowadays, banks use the Electronic Document Management System (EDMS). Banks collect, digitize, and upload all documents to a server.

The “Loan Center” at Hana Bank in Seoul, the first bank in Korea to operate EDMS starting in October 2002, collects an average of 4,000 documents from over 570 branches across the nation. Among them, 80 percent are mortgage loan-related documents. An average of 40 pages per document means that the Loan Center receives some 160,000 pages. Piled up in a row, the documents would reach 20 meters, as high as a seven story building.

Shin Yoon-jung, 27, of the bond document team scans the documents. “It’s a sea of papers. I sometimes have nightmares where I moan under piles of documents.”

At 9:00 a.m. when documents arrive, employees start removing staples from the papers. After that, eight high-speed scanners, each worth 20 million won, start their work at breakneck speed. When all the pages are scanned, employees classify and save the loan documents in the server. The file-saving server capacity is 2 terabytes. Tera, meaning one trillion, is 1,000 times a giga.

Barcodes are attached to the documents, client by client, and kept in the Loan Center stack room in plastic files. The stack room is about 80 pyeong large. When there is not enough space, documents are sent to a far larger 180 pyeong stack room in Ilsan, Goyang City.

Deputy Manager Lee Jung-young of the Loan Center said, “Mortgage loans used to be an overwhelming proportion of the documents sent here, but they haven’t been arriving as much since July, while credit loans are on the rise.”

Sun-Woo Kim sublime@donga.com