6 hidden costs of information silos in banking and insurance

A loan that should close in a week drags on for a month, a claim sits unpaid while three people hunt down one missing document, and an examiner asks a simple question that takes days to answer. It's tempting to write all this off as the cost of doing business, but the real culprit is information silos: the details you need scattered across systems that don't talk to each other, so no one sees the full picture.

Left alone, these silos quietly drain your business. Here are six of those costs that financial services leaders can't afford to ignore.

When a loan officer or claims handler needs a document, they become a detective. They check the origination system, then the archive, then email a colleague who might know where it landed, then wait. Forrester puts the cost at around 29% of the working day spent just searching for information.

The business cost:
These roles earn a median of around $77,000. At 29% of the day lost to the search, that's roughly $22,000 a year, per person, paid out for hunting instead of serving. Put 50 underwriters and claims handlers on a floor and you're spending more than $1.1 million a year to look for documents you already own.

A customer calls and asks something basic, “What's left on my loan? Am I covered for this?”

In a siloed setup, the answer to that one question is spread across several systems. So the person on the phone puts the customer on hold, digs around, maybe calls them back later. The customer just wanted one answer. They got a “let me check on that.”

The business cost:
JD Power found that 13% of retail bank customers were likely to switch within a year, and of those, more than a quarter pointed to a poor service experience as the reason.

When a regulator comes knocking, they want to see specific records, asking, “Who approved this loan in 2015? What was the process? Who touched this file?”

If those records are scattered across silos, every audit becomes a frantic scramble through different systems to pull it all together before the deadline. It's stressful, it's expensive, and it's the moment information silos hurt the most. Compliance is already eating up a huge share of leadership's attention, with US bank executives now spending around 42% of their time on it.

The business cost:
The price tag is already steep. Financial crime compliance now costs institutions $61 billion a year across the US and Canada, and the research points straight at information silos, poor data quality and aging systems as drivers of the avoidable work.

In a siloed business, getting a loan or a claim through the building means a lot of manual handoffs. Someone emails it to the next person. Someone prints it for a signature. Someone keys it into another system by hand.

Every handoff is a pause. Every pause is a chance for something to get lost, delayed or forgotten. It's how a mortgage that should take days ends up taking weeks. Learn more about why mortgages take on average 42 days in this quick-read article.

The business cost:
The average cost to produce a single mortgage rose to $11,094 per loan in 2025, and even in a recovering market, lenders cleared an average profit of just $785 per loan, less than half the long-run norm. Every extra day of handoffs eats straight into that thin margin, and the delays compound across thousands of loans a year.

A lot of these silos are old systems nobody wants to touch. The COBOL mainframe that's run core accounts for decades, or the green-screen policy admin system the claims team still keys into by hand. They still run, kind of, but keeping them alive is expensive. The specialists who maintain them are retiring faster than banks can replace them, and every connection to a newer system means another custom workaround.

The business cost:
McKinsey puts global bank IT spending at around $650 billion a year, more as a share of revenue than any other major industry, with much of it going to maintaining what already exists rather than building anything new. Every dollar tied up keeping a legacy core breathing is a dollar that can't go toward the digital experience customers actually want.

This is the big one. Every bank and insurer wants AI right now, but AI only works if it can read your information. And here's the catch: most of your information is locked inside documents a computer can't read, like scanned forms, faxed pages and PDFs. In fact, Gartner found that 70 to 90% of business information sits in these unstructured formats.

So you buy the AI, feed it your scattered documents and it does almost nothing useful. The AI isn't failing. It's starving.

The business cost:
The bills are real. Gartner pegs the cost of building and deploying GenAI models at $5 million to $20 million, and expects at least 30% of projects to be scrapped after proof of concept by the end of 2025, with poor data quality topping the list of reasons. That's a lot of money to spend starving a system of the documents it needs.

The information your business runs on lives inside documents, and those documents are often scattered across systems that don't talk, likely stuck in manual handoffs and locked in formats neither your people nor your software can read.

A modern document management platform is built for exactly this. It gives you one place to reach every document wherever it lives, uses AI to read what's locked inside scanned forms, faxes and PDFs, and connects it all to the loans, claims and audits that depend on it. Now loans close faster, reps answer customers without the hold, audits pull records on demand, and your AI finally has something it can use.

That's the difference between the banks and insurers that will pull ahead and the ones that will keep struggling with a broken information foundation.