Other documents, such as contracts, must be retained on paper for legal or regulatory compliance reasons. "As much as we've gone electronic in our core business, we still have contracts, trust agreements, etc., that are required to establish a relationship with the bank," says Thum. Such documents are scanned, but electronic versions are complementary.

"I would be surprised to see actual, legally binding documents maintained in purely electronic form," says Ernie Harris, product manager at Raymond James Financial Inc. in St. Petersburg, Fla. The financial services firm uses imaging technology for inbound documents and faxes, but the desire to eliminate paper-based transactions with customers is tempered by regulatory requirements and a cultural preference for signed forms. The company processes hundreds of thousands of paper-based requests to open, update or change customers' accounts each month.

That paper adds up quickly. A new client who is retired typically opens at least six accounts and signs 20 to 30 pieces of paper, says Harris. Currently, 50 percent of the company's transaction requests come in by mail or fax.

Raymond James aims to address that by creating dynamic documents that consist of a common form and modules that can be integrated based on a customer's needs. "You only have to sign one contract. Now we're talking about signing one, two or maybe three pieces of paper [instead of 30]," Harris says.

Some legal documents could go away if digital signature technology became widely accepted. Harris says he is one-third of the way through an evaluation of digital signature technology that could eliminate paper contracts. That system includes a digital capture pad that embeds a secure signature image and document hash into a Word or PDF file. However, he doubts that digital contracts will replace paper anytime soon. "We have hundreds of years of comfort applying pen to paper. It gets really uncertain when you start applying digital representations of those things," he says.