How can Utilize an Electronic Signature in Financial Firms

However, for individuals who are new to electronic signatures, the essential questions are: “How should I use the electronic signature?” and “Which strategy will yield the highest ROI?”

To summarise, all business lines and channels have procedures that are suited for electronic and digital signatures; the use cases chosen are as unique as the bank. Having said that, these are the five most common applications for electronic signatures.

In Financial Institutions, How Do You Use an Electronic Signature?

electronic signatures

Electronic signatures are an essential part of any corporate digitization strategy. Financial institutions (FIs) of all sizes are very interested in getting rid of paper and shifting to digital technologies. Retail and commercial banks, credit unions, lenders, and many other financial services organisations have used electronic signatures for a variety of use cases.

As digitalization programs progress and financial institutions discover the benefits in terms of customer experience, compliance, efficiency, and cost savings, they are looking beyond early apps and quick deployment methods.

Account Establishment

Offering a completely digital account opening and onboarding process that can be accessed from any location and at any time has become a competitive advantage. The goal is to create an end-to-end digital procedure that eliminates the need for the client to physically visit the branch to sign documents or produce physical identification documents.

Account opening processes that are only partially automated, according to Aite Group senior analyst Tiffani Montez, result in considerable churn rates ranging from 65 percent to 95 percent, depending on the product.

This means that the majority of applicants bypass the online application process in favour of another channel (such as a branch or contact center) or seek out another financial institution that allows them to complete the application process remotely.

The good news is that unique and modern digital compliance approaches, such as electronic signature and additional authentication technologies, offer the possibility of eliminating the need for verification and signature at the branch. And financial institutions are quickly adopting these technologies. In 2017, Celent Research published a report on the electronic signature adoption at BMO Bank of Montreal. The bank’s first electronic signature use case was incorporation.

Remote mobile electronic signing is available even when online account openings require a handwritten signature for compliance reasons. In 2015, major banks and financial services organisations began field testing mobile signature capture.

A multinational bank set up a pilot operation to investigate the opening of mobile accounts at airport kiosks. The bank developed specialized iPad software that includes electronic signatures immediately within the app, guaranteeing that the entire process is digital.

According to banks, paperless account opening procedures greatly improve the first client experience by eliminating the need to wait while paperwork is prepared or errors are corrected. When done remotely, the consumer has the added benefit of being able to choose when and when they transact with the bank.

Lending

The most common application of electronic signatures in loans is with consumer and small business loans, as well as retail finance. To sign loan applications and financing agreements online, in the contact center, and in the branch, as well as to electronically deliver the various consumer disclosures at the heart of these processes, electronic signatures, electronic forms, and digital procedures are employed. The coast is clear. Keeping all transactions digital and establishing workflow standards reduces the potential of document errors such as missing signatures and data.

However, the majority of electronic signature action occurs on the internet, where the desire for immediacy is higher to compensate for the high abandoning rates in loan applications due to the paper’s lengthy processing times. Customers commonly employ electronic signatures at a rate of nearly 100% while transacting online.

In the case of student loans, one lender deployed electronic signatures during the peak of the lean season and obtained a 99.9 percent rate of adoption overnight, which has been consistent since then.

Banks and retail credit providers around the world are reaping similar benefits. By providing electronic signature capabilities, Secure Trust Bank in the United Kingdom and global financial provider Hitachi Capital can execute financing at the point of sale with the speed and ease of an online credit card transaction.

The customer signs their name on a tablet or other storage device by hitting a few buttons, and the transaction is complete. This is a huge competitive advantage since it enables banks and financial services firms to close deals while client interest is high.

Conclusion

A digital signature is a unique code or encrypted message attached to an email, document, file, or other communication. It is used to verify the identity of the sender and protect against fraud. Digital signatures are only as secure as the mechanisms that safeguard them. Be sure you’re using a reliable method when sending sensitive information via emails, such as a signed and encrypted PDF.

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