3 Ways Electronic Signatures Are Valuable in Financial Services
Banks, credit unions and other financial institutions are struggling to make a financial transition to embrace emerging solutions. Some organizations are excelling through this shift, and some are faltering, but the industry as a whole is figuring out how to balance customer demands, industry regulations and internal processes in a world increasingly dominated by cloud, mobile and social technologies.
Paper applications, contracts and records have a limited space in this new world, but many banks find themselves clinging to these solutions because they are perceived as necessary to ensure that contracts and other agreements are legally binding. It seems like there aren't enough resources available on the legal validity of electronic signatures for financials services. With refined laws surrounding electronic signatures and advanced technologies like digital signatures behind the e-sign process, banks can move forward into a new era of documentation that streamlines the process.
Benefits of Electronic Signatures for Financial Services:
1. Streamlining internal operations
Everything from analyzing loan applications to opening a new account forces multiple stakeholders to have a hand in the project. With so many users involved in simple bank operations, it is not uncommon to have customers or internal employees fill out paper forms, sign them as needed, stick them in a folder and leave them on the desk of the next person in the chain. That folder could sit there for days before somebody is able to get to it. If that individual is working from an alternate location for a day, an urgent record could be delayed.
These issues are on the tip of the iceberg. Plenty of financial services firms are operating across multiple branch locations and need workers in multiple branches to play a role in the project. This means mailing the physical documents and dealing with all of those corresponding delays. Transitioning to e-signature solutions eliminates all of the overhead costs and wasted time of paper-based internal processes and allows financial institutions to establish efficient, and secure internal documentation.
2. Standing up to an audit
Try documenting how a physical folder moves between multiple branch locations, proving that only authorized personnel saw any of the files, ensuring that all dates for signing are accurate and then compiling all of that audit data and evidence into a unified report that you have to mail to regulators. The task is not only a huge headache, but it is incredibly risk prone. One paper slips out of a folder in a public location and is found by a stranger and you have a data breach.
Paper-based process can feel safe when it comes to regulatory laws because they are familiar, but a good e-signature solution for financial services creates a built-in audit trail that makes it much easier to validate that proper measures are being taken in how a document is signed and passed between users.
3. Creating a positive customer experience
In a world in which people can do just about anything using a smartphone or tablet, grabbing a pen to fill out an important form can feel uncomfortable and risky. Electronic signatures don't just let you reach customers on the devices they most commonly use, they also let you create comfort. E-signature solutions allow you to build in metadata about forms that can help consumers understand what they are signing and what every term means. Electronic forms can also include auto-check tools that identify common mistakes and blank fields on a form, helping to eliminate human error. All told, these functions can lead to a better customer experience.
Electronic signature policy and technology create incredible potential in the financial services sector, but it would be naive to claim that transitioning to the technology isn't an important commitment. Check out our beginner's guide for e-signature use in banking for more background on what financial services firms need to think about when choosing an e-signature plan.