From Paper to Digital - Fujitsu Introduces an Electronic Contract System for Loans - A Case Study of Sumitomo Mitsui Banking Corporation

Use of Paper Remains Strongly Entrenched for Loan Contracts

Internet-based online contracting is becoming standard practice due to the widespread use of mobile devices and diversification of services. Banks, however, still issue written contracts because of security and identification concerns. To them, the physical act of signing confirms the parties' intention to make an agreement. A large number of financial institutions still place importance on written contracts, particularly for corporate loan contracts, which often deal with large amounts.

Using paper contracts, however, has created the burdens of document management, as well as delivery time and costs for both financial institutions and the company borrowing the loan.

The First in Japanese Banks! An Electronic Loan Contract System

Fujitsu, together with the Japan Research Institute*, created a corporate net channel system for the Sumitomo Mitsui Banking Corporation. Using the know-how acquired from this project, Fujitsu created a new system based on the business program development assistant tool, FUJITSU Software Interdevelop Designer**, and the application framework product, FUJITSU Software INTARFRM***.

1. An electronic loan contract system that achieves a quicker and paperless procedure

Traditionally, loan contracts were written documents. Representatives of the bank and borrower had to visit each other's office or mail the document to each other by post in order to check the details of the contract or to place their seal. Also, written contracts had to be printed out and stored, and revenue stamps had to be affixed to them.

This first of its kind electronic loan contract system for Japanese banks uses electronic signatures instead of seals and carries out a web-based contract process to shorten the time required for signing the contract. In addition to eliminating the necessity for revenue stamps, the system allows contracting parties to see the contract details on the web. This means that the parties no longer need to set aside the space to store a copy, and the associated costs for the borrower can be reduced.

2.A loan administration system improves the contract inspection efficiency

Traditionally, a written contract received from the borrower was forwarded to the loan administrator and manually inspected. Inspection of the printout required a lot of time, and space had to be set aside to store the inspected document.

With the new loan administration system, the loan administrator receives a contract electronically and they inspect it by displaying it as an image on a touch panel designed for inspecting contracts. This improves inspection efficiency and achieves paperless processing by eliminating the necessity to print out the document for inspection.

*: A comprehensive information service company 100% owned by Sumitomo Mitsui Financial Group, Inc. It offers system integration, consulting, and think-tank services.
**: Fujitsu created the system based on its business program development assistant tool, FUJITSU Software Interdevelop Designer, and the application framework product, FUJITSU Software INTARFRM.
***: Fujitsu's application framework product for supporting software design, development, management, and maintenance.

System architecture

ICT Supports the Creation of New Financial Services

With these systems, Sumitomo Mitsui Banking Corporation can make their complicated loan contracting procedures more secure, more reliable, and simpler. This will present them with new business opportunities because they can propose new services using the time once used for the more complicated procedure.

Fujitsu will continue to take advantage of its ICT to support the products and services of Sumitomo Mitsui Banking Corporation, as well as meeting their various needs.