For many years, the banking industry has been known to have a slow tendency of adopting change specifically innovative technologies.
But due to the regulatory requirement and pressure from other sectors, it has started to slowly adopt such innovative ideas as they try to keep pace with the other sectors in the economy.
This is because they are trying to reduce the costs as they increase production. One of the technological innovations that the banking industry is trying to deploy in their system is digital e-signature to acquire paperless processes as they serve the customers.
The digital signature solutions help financial institutions to offer better services to their customers as well as increase both production and efficiency in their operations.
Use of digital e-signature is growing at a rapid rate as the banks are trying to cut down the costs associated with traditional handwritten signatures.
Such costs include papers, inks and also it takes a lot of time which makes the operations to be expensive. According to recent research, digital e-signature industry market is projected to grow up to £2,590m by the year 2022.
Now, let's us looks why digital e-signature are very important in the financial industry:
1. Cutting costs
This is the main importance of the increased adoption of the free esign software innovation to many banking and financial institutions. Even though the initial investments required for adopting the technology is huge, the long term cost-saving benefits excides the initial cost. At first, the paper may look as if they are affordable and cheap but when all the costs are added up, you will realize the use of paper for handwritten signatures is really an expensive process.
For example, assuming that interviewers in the U.S print around 1.5 trillion pages annually. This paper is an estimate of around 20 million trees. As you can see, the use of papers is costly and expensive practice after doing all the calculations.
Similarly, another factor is the cost incurred to buy photocopying and printing machines which have significantly higher costs.
In addition, through the use of electronic signature website a bank will be able to save costs that could have been incurred circulating and delivering the documents to different parties.
Also, the e-signature is helping the banking institutions to save costs on storage space. For example, a bank that doesn't have a digital archive will have to retain the signed documents copies in a secure and safe cabin or area.
This implies that the bank will have to invest a lot of time and resources on storing, auditing, filling and of all secure disposal of the documents after they have been used and sometimes security personal might be involved which doubles the expenses.
This case is different when a bank is using a digital online electronic signature software in their banking services. When using e-signatures, a bank will be able to store their sensitive documents on either a private secure cloud system or a robust server. Eliminating physical files, security guard costs and large document repositories through the adoption of the e-signature solution can be very effective in cutting costs.
2. To prevent non-compliance and Frauds
It’s good to keep in mind that paper records and document are not as much secure like when you are using the e-signature solution.
This is because intruders can easily alter with the already signed documents which create a compliance gap. Also, intruders can forge handwritten signature which is a threat to the financial institutions. In addition, paper documents can be easily destroyed or even stolen by people with a hidden agenda. These fraudulent activities result in many negatives implication such as regulatory hefty fines and lawsuits as customers try to recover their money.
This will also result in significant financial losses. To avoid this, banks have found a long-lasting solution in digital e-signature. E-signature has the ability to protect the documents integrity.
This is because the technology is designed to be untraceable and secure when storing the documents. The e-signature system is very secure in such a way that a change of a single document content will invalidate the signature.
This implies that there is a bond between the signer and the document through identity verification measures and timestamp. Through this, intruders cannot disrupt the documents.
3. E-signature increase productivity
E-signature is doing wonders through improving how people work and relate together in the financial institutions. For instance, paper documents will take days for it to be sent from one recipient to another and back again. This process is very time-consuming and expensive to the banks. Also, the process takes a lot of productive hours through delays as one recipient wait for a document to be signed by another person.
But with electronic signatures, the workflow cycles of all documents is faster and instant. E-signature can enable different recipients to sign a document simultaneously even if they are far from each other. Through this, the staff and financial advisors can accelerate complicated and long processes and therefore, giving them more time to interact with customers to create strong relationships, loyalty and even trust.
When financial institutions focus on providing strong compliance and security, it will give the investors and customers’ confidence to do more business with the banks. The confidence arises when customers know that their confidential information will remain safe with the banks.
Such documents include investments authorizations, customer statements, legal records and any other document associated with modern banking. The good thing about digital e-signature is that they provide every signer with unique signing keys. The keys provide high level of assurance and trust to all customers and investors.
The above benefits associated with the use of e-signature in a financial institution are the one catalyzing banks to use the technology. Financial institutions play a major role in any economic growth as therefore they should be very sensitive on the modern arising technology that can improve their customers’ services. E-signature is a technology that has the ability to transform and increase banking sector services quality to the general public.