Driven by the wide acceptance of electronic commerce, the impetus to cut down on physical paper, and – most notably – the need to quicken processes (e.g., loan processing by the lending institutions), electronic signature solutions for financial services have seen greater approval rates over the last few years.
Legislations such as the Uniform Electronic Transaction Act (UETA) and the ESIGN Act which aimed at eliminating certain security, legal, and compliance concerns have also made e signature usage even more appealing. And top service providers in this space (led by Foxit eSign aka eSign Genie) have become so perfect at this to the extent that, an e signature is now more fraud-proof and secure compared to the traditional pen-and-paper signature.
There are many cases of e-sign usage in various industries, usually at the channel or product level; however, players in the financial services sector are adopting it on a larger scale? Why is this?
Why financial services companies should embrace e signature
By taking advantage of advancements in technology, particularly, the invention of e signature services, across entire processes, financial institutions can handle some of the biggest challenges that they are facing in this day and age.
1. Economies of scope
Reduced paper and related transportation costs, return on investment (ROI) as a result of reduced transaction times, and improved security around record keeping — are making financial services companies embrace e-signature.
Since less paper is involved, banks, financial brokers and other players in the lending sector can now save on printing costs, as well as transportation costs. Using an e signature service also expedites the approval and authorization process for client transactions and facilitates easy access to signed documents and contracts, as all electronic documents are accessible in real-time.
2. Clients can sign documents on any device, anytime
Many customers prefer electronic signature nowadays. Demographics, Mobile technology and the belief that everything must take place (almost) in real-time make e-Sign services across the financial sector more acceptable. Customers want to interact with their bank or designated financial institutions anytime they wish, and wherever they are. Through top e signature platforms, such as Foxit eSign aka eSign Genie, customers can expect seamless digital experiences that allow them to quickly complete transactions from anywhere.
3. Streamline customer on-boarding
Players in the financial sector must adhere to the Know Your Customer (KYC) verification measures to make sure that new clients are actually who they say they are. This procedure can be a bit complex for lending institutions especially when it comes to gathering liens, legal agreements, notes, titles, social security cards, etc. However, electronic signature service providers can help you streamline these processes and cut the time required for the KYC process considerably.
4. Improve your compliance stance
The financial services sector is vastly regulated with pressures from organizations such as The Consumer Financial Protection Bureau (CFPB) and The Federal Financial Institutions Examination Council (FFEIC). Implementing electronic signatures can boost your compliance stance compared to the ink and paper signatures. E signatures are known to present great authentication methods, tamper-evident seal, secure encryption, all with a court-admissible and legally binding audit trail. Additionally, e signatures perfectly meet auditor’s requirements and strictly conform to the ESIGN and UETA laws.
5. Reinforce brand image
The use of electronic signatures creates a positive notion, especially at the customer level. Why is this? Lenders and financial services companies that use e signatures are perceived as innovative, which then gives the customer the idea that, they are good at customer service and fighting fraud. This impression matters a lot for individuals and institutions wishing to succeed in the financial services sector.
Use cases and industry application of e-signatures in the financial services sector
According to a research study done by Forrester Research, financial service providers are now at the forefront compared to other industries in terms of e-signature adoption.
Lending – When viewed from the lending aspect of it, the most frequent uses for electronic signatures are in retail financing, small business loans, and consumer loans. Digital signature solutions nowadays are being used for signing contracts and loan applications online, as well as for electronically delivering the numerous consumer disclosures that relate to these lending processes.
Wealth management– This is a sector that is coming up with a key target for electronic signatures. The goal is to curtail the long sales process (which usually involves many meetings and redundant errors) to a single sitting. Both the financial advisor and client usually have to sign various contracts and forms, making the whole process an ideal target for e-signatures.
Banking– E signatures help banks speed up the lending process, streamline new account openings, and offer more convenient customer service.
Mortgage industry– As more players in the mortgage industry move online for increased speed and convenience, e-signatures automatically becomes the perfect solution to introduce digital experience into the ever-demanding mortgage transactions. They make these transactions convenient, secure and compliant.
Ad hoc and other general e-contracting processes– Within the financial institutions, there are several ad hoc processes that require signatures. These processes range from procurement and e-contracting to IT, HR, Corporate, Legal and more.
Finance services companies can use e signatures in managing the following documents:
- Loan application forms
- Account change/maintenance forms
- Change of address forms
- Transfer of assets documents
- IRA and 401k rollovers
- Change of beneficiary forms
- Delegations of authority forms
- Mortgage Application Trade Confirmations
- Audit sign off
- Term sheets
- Credit reports
- Compliance processes
- New account opening forms
- Subscription documents
- Redemption request forms
- Account maintenance forms
Making the case with Foxit eSign aka eSign Genie
Foxit eSign aka eSign Genie enables financial services companies to create digital workflows from when a transaction is initiated up to its completion. For instance, a banking customer can commence a mortgage application process from her smartphone or tablet, via the Foxit eSign aka eSign Genie’s platform. The request then sails through the digital approval procedure and returns to the client for final reconsideration—all without going to paper.
Gone are the days when a bank or lender had no choice but to spend hours preparing a heap of papers just to issue a simple loan, and a client had to waste more additional time trying to wade through these papers to locate the places to sign. With Foxit eSign aka eSign Genie, the whole package is digital, from the word go, resulting in a gratifying sensation that keeps clients coming back for more.
Sole reliance on typical pen-and-paper signature exhibits inflexibility and an uninventive mindedness to the future of business practices. A lender or a financial services firm loses nothing by adopting digital signature solutions; rather stands to gain to a large extent through minimized risk, increased efficiency, better close rates, lower costs, and the better customer experience in all aspects of its operations.1