For a variety of purposes, electronic signatures can be used by lenders, commercial and retail banks, credit unions, and other financial service firms.
Financial institutions are looking for ways to quickly deploy digitization technologies as they recognize the advantages in terms of customer experience and compliance, cost savings, and efficiency. These advantages are applicable to every commercial channel and department within the business.
Account Opening
A fully digital account opening and onboarding process that can be accessed anywhere and at any moment has been a competitive advantage.
It is our goal to create a digital process that can be accessed from anywhere and at any time. Tiffani Montez, senior analyst at Aite Group, said that account opening processes that are not fully automated can result in high churn rates, ranging from 65 to 95 percent depending on the product.
This means that most applicants abandon the online application process in favor of a branch or contact centre or another financial institution that allows them to complete the application remotely.
There are new, innovative ways to digitally comply, including electronic signatures and identity verification technologies.
This allows for the elimination of the need for signature verification at the branch. These technologies are rapidly being adopted by financial institutions. Celent Research published a 2017 report about the deployment of electronic signatures at BMO Bank of Montreal.
The bank's first use of electronic signatures was incorporation.
The launch of a digital account integration service that is simple and contextual in nature, according to the BMO Annual Report is an exceptional service in Canada.
Customers of BMO can search for, select and open accounts on their smartphones in under eight minutes. "The BMO mobile client registration has been in production since 2016.
Remote mobile electronic signature is possible even though online account openings are subject to compliance requirements.
In 2015, major banks and financial service firms started testing mobile signature capture in the field. One multinational bank created a pilot program to test the possibility of creating mobile accounts at airport kiosks.
The bank developed a customiPad software that included electronic signatures. This ensures that all procedures are digital. Although the bank used the same trusted process for creating deposit accounts for many years, the team decided to make the iPad version.
This allowed them to simplify the process and reduce the number of steps.
Banks claim that paperless account opening procedures significantly improve the client experience. They eliminate the need to wait while paperwork are printed or errors are corrected.
The added benefit of transacting remotely is that the customer can choose when and where to do business with the bank.
Lending
Electronic signatures can be used in loans for both small and large companies. The electronic signature, electronic forms and digital procedures can be used to sign loans applications and financing agreements online.
They can also be used in branch to electronically send disclosures to consumers. It is simple. Transparency is key. Implementing workflow standards and keeping transactions digital reduces the chance of document errors like missing signatures.
Electronic signatures make it easier to work with documents. For example, a borrower can be brought back to sign paperwork that was incorrectly completed the first time.
US Bank almost eliminated loan exceptions by implementing electronic signatures in its corporate and consumer loans processes. This was implemented in more than 3,000 retail branches. The bank has reduced its document processing costs while meeting compliance standards.
improving the client experience
We started with 70% of all loan account openings using e-signatures. Within a year, we had risen to 85% which is where we stayed," says Ron Eddy (associate vice president for technology operations at U.S Bank).
The majority of electronic signature activity takes place in the internet channel. This is because the customer's demand for immediate access to information is greater than the low abandonment rates for loan applications due to paper's lengthy processing times.
Customers use electronic signatures at an average rate of around 100 percent via the internet channel. One lender used electronic signatures for student loans during peak season. It achieved a 99.9% adoption rate overnight.
This has remained constant ever since.
Similar rewards are being enjoyed by banks and retail loan providers around the globe. Secure Trust Bank, the United Kingdom's financial provider, and Hitachi Capital the global financial provider, offer electronic signature capabilities that allow them to complete financing at the point-of-sale with the speed and ease associated with an online credit card transaction.
By pressing a few buttons, the consumer signs their name onto a tablet or other device at the store. This gives banks and financial service businesses a competitive edge as it allows them to close the deal quickly while client interest is high.
Similar benefits are available for business loans. Wright-Patt Credit Union, one of the 50 largest credit unions in America, used cloud computing to streamline its business lending process.
OneSpan Sign and nCino integrated electronic signatures, allowing the credit union's business loan team to fully benefit from the digital end-to-end process. WPCU's business loan volume increased by fourfold in less than one year using the integrated solution. It also improved the credit experience of its members.
Benjamin Miller, WPCU's Business Portfolio Analyst, said that the coordinators who prepare and send the document bundles electronically are happier about it.
WPCU's Commercial Lending Team used to take 22 minutes to prepare paperwork for members. Now, it takes half the time with digital processes.
They have also noticed significant time savings for their lenders. Lenders used to spend 54 minutes closing a loan. Now, it takes them no time.
As financial institutions strive to compete for the growing mobile consumer market, it is becoming increasingly important that mobile loan transactions can be completed remotely via electronic signature.
Many of our clients indicate that electronic signature changes have:
- Reducing the time to submit an application from 8 days to 24 hours to 48 hours.
- The annual scanning and imaging costs for 26 million pages loan paperwork were cut by $1 million.
- 90 percent reduction in document errors.
- 80 % of document handling expenses were eliminated workflow optimization was reduced from 16 to 4 steps
- This allowed a bank to redistribute 95,000 hours of work by bankers to sell additional loans.
- No manual administrative procedures are required anymore.
Wealth Management
Another good way to use electronic signatures is wealth management. This is done to speed up the sales process, which often involves many meetings and high error rates.
Instead of requiring multiple meetings and lengthy paperwork, the goal is to have one session where paperwork can be completed face-toface with customers. A recent webinar by CEB TowerGroup on electronic signatures in wealth management raised two topics. Clients want easier digital interactions.
A second requirement is to give advisers the tools they need in order to deliver the customer experience they expect. CEB states that consumer technology usage is high but advisors aren't interacting digitally with clients.
A CEB poll of wealth management and financial services firms found that 32% said that improving client onboarding and using technology for multichannel customer interaction were the most important topics.
The poll found that 34% prefer to use customer-facing portals and wealth management websites to acquire new financial products or services. 62% of Gen X/Y clients feel technology helps them. Your financial advisor can work more efficiently. RBC Royal Bank of Canada introduced electronic signing technology in 2012 for their wealth management line.
Bank Systems & Technology estimates that the bank's investment advisors spent over 80,000 hours per year searching for papers and correcting errors such as missing data and signatures. There was a lot of human error with hundreds of mobile advisors across the country managing millions of papers on the road.
For example, an adviser might have to go back to the client to get missing signatures or to rewrite papers. Electronic signatures were the solution.
The Bank's Electronic Signature Returns on Investment (ROI) Includes the Following:
- Sales management was streamlined by thousands of hours, allowing consultants more time to focus on building relationships and selling.
- 75% less document errors.
- Annual administrative savings of $8,000,000
RBC has laid the foundation for electronic signatures in other business lines by automating its wealth management processes.
Interview with James McGuire, Bank Systems & Technology, a former Vice President of Digital Strategy at RBC, James McGuire stated that the main challenge in the product launch was the creation of the solution architecture and processes to handle different types of transactions. It will be much easier to apply the solution to other areas of the bank's business like branch retail transactions.
The bank is already testing the solution in a few branches, and plans to have it available across its entire branch network by the end.
Investment transfers are another area of wealth management. Tangerine, a Scotiabank company formerly known under ING Direct Canada began offering electronic signature capabilities to clients during the most busy time of year for retirement investments.
The transfer permission form was used by consumers to transfer their registered investments to Tangerine. Over 1,500 electronic signature transfers were made by the bank in just six months. Electronic signatures were welcomed by Tangerine customers, with 65% preferring electronic signatures to paper ones.
None of the digital forms were erroneous. The bank had a NIGO Rate of 0% which is simply not possible with paper.
Mortgage
Digital mortgages are growing in popularity despite the complex nature of the mortgage industry. Digital signatures allow customers to have a digital experience at their home.
They make it easy, secure, and compliant as more mortgages and refinances migrate online. Banks integrate technology, such as electronic papers and electronic signatures. They also digitize the many procedures involved in a mortgage transaction.
Banks and lenders are automating the urgent disclosures phase of the mortgage process.
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Wells Fargo has, for instance, made it possible to electronically transmit information for Home Equity Line of Credit applications.
This was an excellent example of how electronic signatures can be used. It allowed consumers to review disclosures online or via mobile browsers, and kept the process moving without waiting for a package to arrive.
Paper. via mail. Wells Fargo extended electronic disclosure to all residential mortgage applications. The bank also made mobile phone access to residential mortgage disclosures.
Wells Fargo also offered the option to electronically sign a mortgage request for clients who prefer a paperless process in 2015.
The two main drivers of mortgage digitization are not only legal concerns but also client experience and non-bank lender competition.
In order to be more agile and gain a competitive advantage, non-bank lenders are quickly implementing electronic signatures. Customers prefer internet transactions. Customers reward financial service providers that allow them to communicate with their loan officer, upload documents and accept disclosures online.
They also appreciate the ability to sign electronic forms via a mobile device.
Lenders were able to cut down the time required to get a mortgage. The average wait time for obtaining a mortgage was 45 to 55 days, and now it takes less than 20.
Signature Mortgage has a simplified 7-10 day process by having an online application that can be signed and sent out the same day. Nearly all your customers (99%) prefer to submit their mortgage applications electronically. Signature Mortgage has seen a 100% increase in income, a 85% drop in courier costs and unsolicited comments from clients about how easy and quick it is.
Commercial Banking & Treasury Management
Financial institutions are looking for ways to make business with clients outside the branch easier by improving the customer experience in business loans and treasury administration.
Signature Bank in Chicago is an excellent example. American Banker claims that clients can now enroll in treasury management service faster with an electronic signature.
The bank wanted to reduce the time and money required to include services for clients. Previously, clients had to apply their signatures using wet ink on paper papers sent via FedEx or print, sign and return PDFs provided by email.
Another bank could use the Treasury Management Services Framework Agreement as a starting point. This regional bank uses nCino which is a cloud-based, cloud-based banking platform based on Salesforce.com.
They used the OneSpan Sign for Salesforce connector to quickly get started with eSigning. This allows a Salesforce administrator within the bank to install the connector and bring eSigning capabilities into Salesforce in minutes.
Coding. Bankers might be able to start delivering paper for signing immediately from their CRM platform.
Another topic of interest is ACH processing. For operations like withdrawing ACH from a consumer's account, businesses need a simple way for customers to sign the bank authorization form.
Paper forms are difficult to sign because the customer must be present to sign, have access to a facsimile machine or visit the post office. The digitalization of the process allows businesses to obtain signed authorizations quicker and makes it easier for customers to sign electronically via their smartphones.
This reduces losses and boosts cash flow.
Conclusion
Electronic signatures can be used in a variety of ways. Many financial institutions use electronic signatures in branch transformation efforts.
Some others start with large-volume online self-service transactions. An international bank's wealth management line was the first to implement electronic signatures in its field sales channel.
After demonstrating success and ROI, they extended the technology to other areas of the business as part of a digitalization plan.
Many institutions have adopted electronic signatures as a standard service. Although a specific line of business might require a solution immediately, it is likely that the company will have a business need for digital business processes.
As a service, electronic signatures are available to all divisions. This helps to break down silos within the company, reduce development time, speed up deployment, and creates a consistent user experience.
You can go digital and offer electronic signature capabilities to your customers as a shared service, regardless of how diverse your company's needs and goals. For more information, download this whitepaper: Accelerate your Business Digitization: Best practices for using electronic signatures as a business service.
