For any bank looking to take the primary steps towards digital transformation, meet eSignature online, the seemingly little technology synonymous with immense benefits.
The financial service industry now more than ever before experiences a collision of regulatory, technological, and regulatory challenges. One, revenue pressure is rising. Shifts towards more digital customer behavior and the rise of digitally-agile competitors are increasing the competition.
Two, cost pressure is growing. Customers want 24/7 access to bank services via channels of their own choosing. Thus financial institutions hoping to deepen their client engagement and rival. The demand will require an end-to-end view of their customers, based on new tools and reliable data – all of which need investment.
Banks and institutions which do not adopt technology are meant to lose their customer base. As fintech companies are raising the standards in terms of providing straightforward, digital, and user-oriented financial services.
Getting rid of the legacy system for real digital transformation
The banking sector has historically been a sector slow to change when compared with other industries. One of the challenges they face is figuring out how to shift from their usual legacy systems. In which their entire operations run on, and adopt new and unfamiliar technology.
In some institutions, for example, it’s likely for change efforts to be forgotten in the depths of boardroom silos. Even when the intention is to come up with a cross-functional platform for improving customer experiences. The good news is that, nowadays, a majority of players in the banking sector believe they must embrace technology. Simplify their processes and their back offices.
E-signing can help banks move forward: Use Cases
Electronic identification and e signature online can be a solution to most of the challenges mentioned above. They provide clients the liberty of getting banking services whenever they need them.
Opening bank accounts (Knowing your customer)
Financial institutions are usually obligated to gather customers’ personal information for banking transparency and money laundering prevention. However, to get this info and complete the KYC process, a number must be followed. Honestly, it can be a long and strenuous experience.
In the digital era, how do you deliver a flawless and secure account opening experience – one which guarantees applicants do not abandon the process halfway. As found in the report dubbed as State of the Digital Customer Journey, abandonment rates significantly rise when the time to carry out an application process increases.
Considerable Impact On New Customers of Banking Sector
As new competitors disrupt the banking sector and raise the customer experience bar. Financial institutions know that they need to improve their game when designing their journeys for new customers. Credentials This first touch point with applicants can have a considerable impact not only on the probability of converting them into clients but also on their ongoing impression and relation with the bank.
The good thing is that new and inventive approaches to digital fulfillment with identity verification technologies and electronic signatures present an opportunity to do away with the need for an in-branch visit, verification, and signing. E signatures online help banks onboard new clients quickly by speeding up the signature collection process.
Convenient in Sign the Document in The Bank
Imagine from your customers’ point of view how convenient it is to be in a position to sign account opening documents, without having to spend time travelling. No more being stuck in traffic jams, no more skipped lunch breaks, waiting in long queues, no more piles of paperwork in the drawers at home, etc.
In short, digitizing the account opening procedures not only enhances the customer experience but can also significantly reduce manual processing and KYC rework for your staff in the back office.
Loans and Mortgage Applications
For banks, loans are an indispensable part of their business. From vehicle finance to home loans, credit applications to personal loans, and everything in between, lots of applications relating to these services are processed daily. The challenge is that, in any credit or loan application, one or more signatures are required. Physical signatures are exceptionally paper-intensive and time-consuming, not to mention costly.
Traditional wet ink signatures bring about inefficiencies into digital and automated workflows, wasting money and time and increasing an institution’s carbon footprint. Making sure that the entire workflow can be executed electronically solves these challenges and boosts the firm’s competitive edge. Remember, the ability to more quickly and efficiently complete applications are not only beneficial to clients but also to the bank itself.
Signatures to a Loan or Mortgage Document with eSignature
Picture this; with the manual signature processes, it takes days, at times, weeks, to fill all the information and signatures to a loan or mortgage document. Not to mention the time taken to send the applications back and forth via post or fax. But like we have already mentioned, with sign solutions, this time frame can significantly be reduced to a matter of minutes since these solutions can be integrated into a digital platform that efficiently manages document workflow.
For example, a portal can be designed where all borrowers access a single entry point and electronically sign the documents. The borrowers can access this portal from wherever they reside in the country, without having to visit the bank physically, thus eliminating the bottlenecks and delays, and boosting the efficiency of the entire process. Also, this ensures that issues with having different document versions are avoided, optimizing storage and archiving. While at the same time providing a comprehensive audit trail and improving process transparency.
For customers, this is a perfect gaming-changing solution, since one of the notable hassles and disappointments with financial applications is the inconvenient and long nature of the process. Using e signatures online workflows, banks and other lending institutions can gain a considerable edge over the competition. The benefits are immense, and the business case for e signs is strong. As can be carry by the rapid adoption of such solutions across the country.
Banks staff onboarding
Bank new hires can sign documents online and complete onboarding anytime, anywhere. The digital records are then sent to the HR department. None of the parties (candidates and HR officials) need to hand-carry or sign documents. Thus, damaging or losing contracts is completely abstain, and the HR department spends less wait time to sign off.
In short, new hires can take action on contracts that require a signature promptly, in a matter of seconds. Whether it’s that W-4 and I-9, or handbooks and individual policies, an electronic signature solution has got you covered.
Lastly, you know that employee documentation contains very private information. It is, therefore, advisable that identity authentication tools are used to secure such documents. No better solution or tool can achieve that than electronic signature software.
What are the primary purposes of embracing eSignature online solutions for banks?
Organized documents in one place
Banks and financial organizations deal with a range of documents on a daily basis. Equally, banks have tens of branches working under the main branch. Unfortunately, many vital documents are misplaced more often than you imagine.
Working out long processes of signing various documents for lending, leasing, or account opening and gathering additional papers like declarations, proofs, certificates, etc. from different clients each day, increases the probability of misplacing them.
For the banks to have an organized and effective documents centralization, it needs to adopt the use of electronic signatures. When a signature is a snare in a document template by an e signature solution. Then it is automatically and safely stored in the document management system (DMS) of the bank. Meaning, any branch of a particular bank can be able to access e signature online and serve as many customers as possible.
When contracts are posted out on paper, it gets difficult to determine where they are in the signing process and what may be holding back the process. Was the contract lost? Did the bank staff forget it in a pile of mail? Is the client having second thoughts? With electronic signatures, financial institutions can see where the contract is at any time. Then the institution can act by moving it along the process by sending notifications and reminder emails.
In this fast-paced era, people’s time is of greatest value. Performing processes online makes them quite fast. Electronic signatures allow financial institutions to provide clients the ability to sign forms and contracts whenever, and wherever they are. That means clients that are on vacation or located far away from the bank branch can still conduct business with the bank. Most importantly, the paperless efficiencies associated with e signatures online frees up the branch staff, giving them more time to focus on critical business functions such as cross-selling and up-selling.
Banks must provide investors and clients with the utmost confidence that their sensitive information will not leak to the wrong hands. This includes investment authorizations, legal records, customer statements, and the swathe of other agreements that underpin modern banking.
Electronic signatures guarantee the highest levels of assurance and trust because they have unique signing keys for each signer. Usually, this directly links the signer’s identity to the signed doc and verifies their action, in addition to being eIDAS and ESIGN act compliant. Besides that, e sign solutions provide further evidence in the form of comprehensive audit information on user actions. This includes the exact times and dates of signing, IP addresses, legal notices, authentication mechanisms, and signatures applied.
Banking industries need a high level of security, it is good to understand the different types of e-signs and their validity. Basic e-signatures can be used to address a range of use cases depending on whether trust, user experience, or cost is the priority.
Things Banks must do when adopting eSignatures online
Before any bank approves the use of electronic signature solutions, they should ensure the following points:
Must follow the already established standards
There are several laws governing e signature use, especially in a sensitive industry like banking. There are federal ESIGN regulations, state regulations that fall under the Uniform Commercial Code (UCC). Also, the laws that govern e-transactions for specific industries.
If you are familiar with the standards that apply to your institution, then you are likely to start well. Going without these standards could get you into trouble with the authorities.
Take authentication into consideration
Is the person carrying out the transaction who they claim they are? For low-risk e-transactions, banks do not have to do much to validate identity. On the contrary, for a high-risk transaction like a mortgage, promissory note, or an auto loan, the risk automatically escalates. That means banks must be keener when determining the levels of authentication that should be associated with a particular transaction.
There are various ways to approach authentication for electronic signatures. The ideal approach is integrating authentication into your online banking system. If your mobile/internet banking system is well-secure, you can depend on its authentication in your e signature solution. We are saying this is an ideal situation because many banks already have an authentication process in place, which they have used reliably for many years.
If you can’t integrate authentication, then you need to do something for higher-risk transactions. For example, for new account openings, you can rely on third-party services like credit reports or other relevant services that verify identity. The bottom line is straightforward, though: Weigh your risk and calibrate the extent of your authentication process accordingly.
Drop to Paper and Try Free Electronic Signature
When a customer determines he wants to perform a transaction offline after initiating the process online, that is called “dropping to paper.” There are two instances when banks should make this option available.
- When we need to create Documents – Whenever we need to sign any document to be appraise legitimate, you need to allow clients to drop out of the process, when necessary. They should have an option to opt-out and say, “I do not wish to do this – I prefer to do it on paper.” As with authentication and verification, this is more decisive for higher-risk transactions. Without offering clients this opt-out, the whole document could be invalid.
- In the servicing phase – Selling a mortgage or loan, delivering it, or fulfilling a request for a copy – you may find yourself dropping to paper. And if that’s the case, you should do it (drop to paper) correctly. From handling access control to document identification, everything must be done appropriately. If you don’t and something goes wrong in the later stages, the matter could end up in court.
Many of us would prefer to live in a cost-effective and super-efficient world where all transactions are move out without paper. However, that is not always going to be the case. The option to drop a transaction to paper flawlessly and without any negative implications is an essential step in the electronic signature process.
Ensure you are using eSignatures as a competitive advantage
Before embracing electronic signatures, ask yourself, “What’s the whole essence of doing this?”
Maybe your customers relish the ease of e signs. Or you have learned that your competitor has had massive success with a similar situation.
At times, those are not bad reasons. However, a better one is being sure that a switch to eSignatures online makes sense for your bank.
Here are other reasons that would make sense:
- It will help you to open new accounts or loans faster. If that happens and the bank adds revenue, you have probably made the right decision.
- It will minimize risk. If you have followed all the necessary steps in coming up with an electronic signing system, all your e-sign transactions will produce documents that meet the relevant legal requirements.
- It will cut costs. If the electronic signature solution you are using will reduce paper-related costs, then without a doubt, that makes sense.
In the end, you have to find reasons such as the ones mentioned above to justify the move to free electronic signatures online. If you switch for the right reasons and conduct the process in a proper manner, you will not regret it.
Putting it all together: A clear sign to follow
With competition for deposits getting more cut-throat and customers trending towards fast-paced alternatives in nearly every aspect of life. Banks need to adopt the right tools to retain their current clients and appeal to new ones. Now more than ever, banks have an unprecedented and unique opportunity to engage, maintain, and create loyalty with personalized service.
By improving a once inconvenient and mundane process (albeit a critical and necessary one), financial institutions can enhance service, boost security and compliance, and streamline operations. Very often, the most challenging thing is determining how to meet clients’ demands.
To those ends, electronic signatures provide a straightforward answer to many difficult banking questions. All that is want is the will to try and strategies to implement its use.