I was glad to see Eleanor Laise explore both the pros AND cons of turning the paper off  in Tuesday's Wall Street Journal (here). Sometimes, we in the industry get so excited about the supposed win-win of estatements (save trees, save money, save clutter, thwart dumpster divers, and so on), that we forget about the very real consumer behavior issues that work against going completely paperless.

For example, here are some of the potential pitfalls of paperless finance: 

• Statements and notices lost in overflowing email in-boxes
• Email address changes that are not communicated to the financial institution
• Spam filters trapping financial notifications and alerts
• Hard drives crashing and erasing records
• New computers being installed and records lost in the process
• Laptops being stolen along with the digital papertrail
• Computers infected with viruses rendering them inoperable or worse, sending financial data to the thieves 
• Stress at tax-time trying to remember web addresses and login credentials to access last year's financial info
• Finding out on April 14 that your credit card issuer only stores 12 months of records online, so Jan/Feb/Mar of the last tax year are no longer available online, and will take days to retrieve through customer service
• Forgetting to rebalance your investments because you never take the time to login and look at your online statement
• Forgetting to report investment income/losses on your taxes because you had no paper trail and forgot about the account
• Trying to explain to the tax auditor that you don't have paper copies because you "are saving trees" 
• Backup files being lost, forgotten, or corrupted

At one time or another, everything on this last has happened to me. That's why, even though I prefer trees to be alive, I've resisted going paperless for most bank and credit card statements (note 1). Also, as an industry observer, I like to see the statement stuffers for research purposes. 

Action Item
However, most of these problems can be solved over time by a single online banking improvement:

Guaranteed, long-term storage of financial transaction records, statements, check images, and other financial documents. 

By long-term we mean at least five years to cover tax audits. But much better would be life-of-the-account storage, which we believe is a tremendous retention tool and much less costly than free bill payment. See our Online Banking Report, "Lifetime Statement Archives," for the full business case.

Update: Gonzobanker published a how-to on going paperless today (here).

Note:

1. Of course, I'd save many more trees by turning my newspaper subscriptions off. A few days worth of newspapers at our house weighs more than a year's worth of financial statements. But I still like the scanability and serendipity of browsing a printed publication.