E-signatures are rapidly becoming an essential technology for all financial institutions and banks. In the last year and a half particular, e-signatures are enabling banks and financial institutions to ensure vital businesses by providing customers with access to digital services such as opening bank accounts and loan financing for autos and insurance contracts.
Although COVID-19 triggered an increase in the use of digital banking and the need for secure electronic signature technology solutions the trend was already gaining momentum to enhance the customer experience and make banking more convenient for all customers. In reality, the electronic signature industry is projected to increase by 28.9 percent from 2019 until 2027.
As per the US Electronic Communications (ESIGN) Act 2000, an e-signature is a signature process that is used to sign digital documents. As it shares the same legal status as a signature written in a document often referred to in the context of "wet signature" -- legally binding the signer to a contract or other agreement.
Yet, concerns about their legitimacy, security, and proper authorization of signers have risen. The concerns could be legitimate because a fake signature could be a legal issue. There are other concerns associated with e-signatures, including security concerns that can expose you to being hacked. Although it's normal to be wary about adopting electronic signatures, online e-signature services, like Countersign are equipped with essential security features to deal with concerns and stop misuse.
What is an eSignature?
Electronic signatures are a substitute for handwritten signatures. However, the law does not define what the ideal signature should look like. It sets out the criteria to create a contract but it doesn't state which technology to use in the contract, whether pen and paper or mouse and computer. This is known as "technology neutral".
There is a 'technology-neutral approach within UK general law as well as the advanced electronic signature standard, and US law. Legislation can use specific technology. This can be the case with certain contract types that are subject to regulation or for the assurance of the EU's "qualified electronic signature standard.
Best methods to implement electronic signatures
Maintain a current and easily accessible authorized signatory list.
Sign off on any additional signatories, if they are needed.
Develop a formal internal electronic signature procedure or policy and then consider adding specific anti-fraud controls and security measures.
You can consider using a cloud-based e-signing platform to speed up the process and also a signatory authorization system to provide an additional level of protection.
If in doubt, consult with legal counsel to determine whether the e-signature option is suitable for your particular transaction.
In the end, e-signatures are a significant improvement in efficiency and can further be improved by using the most advanced technology in signatory management.
Most common Concerns with the Adoption of Electronic Signatures
These are the five most frequent questions that are answered regarding electronic signatures.
Are eSignatures legal?
Yes. The Electronic Signatures in Global and National Commerce Act (ESIGN Act) was enacted on June 30th, 2000. This made it legal for electronic signatures for signing and storing electronic documents on a federal scale. On the state level, electronic signatures are also governed in 1999 by the Uniform Electronic Transactions Act (UETA) with minor differences in 48 states.
But, they only apply to specific documents. They don't include recognition of wills and family law documents. They also do not include official court documents as well as health insurance benefits as well as testamentary trusts.
Are Electronic Signatures as Legal as "Wet Signatures"?
The tracing and authentication techniques of esign services ensure that they are safer and more secure than ink signatures and paper documents. E-signatures are designed to decrease the chance of fraud and ensure conformity through the audit trail.
The American Bar Association states that the electronic trail that is created by electronic signature solutions could provide additional information that may not have been accessible before the advent of the internet. For instance, it is possible to see virtually who was who, when, and the location where an individual signs the document.
E-signing platforms may be further enhanced with digital encryption technologies, as well as identity verification tools like biometric identification and ID document capture to keep out the tampering.
Do eSignatures and Digital Signatures Identical?
While the ideas are the same an electronic signature reveals the intent of the person signing a legally binding contract.
Digital signatures are electronic signature that produces the appearance of a fingerprint unique to each individual during a transaction. This can then be used to verify the authenticity of the signed record through public-key cryptography and encryption/decryption technology.
While digital signatures can't accurately reflect the intentions of the person signing them, they are beneficial to utilize in conjunction with electronic signature software to provide more protection to the data and transaction as a whole.
How Difficult is it for eSignatures to Locate?
Secure electronic signature systems must be able of authenticating users before signing electronically and link that authentication to the signature e-signature along with the document.
In this way, multi-authentication strategies allow for flexibility to be configured for the same transaction in line with the risks of the company. The audit trail that is digitally recorded for every transaction makes it much easier to track signatures and documents from A to B.
Do electronic signatures for complex financial agreements eliminate human contact and customer service?
No. One of the main advantages of Esignature for the insurance industry is that it can enhance the experience of customers. While it is true that the latest technologies, such as artificial intelligence (AI) increase the effectiveness of online transactions and banking, they will not eliminate the need to have human interactions. Human interaction is an essential element of financial services, especially for investment management, loans, and mortgage contracts. Financial institutions and banks are currently integrating solutions that offer virtualized human assistance to offer secure, video-enabled interactions with customers to help customers navigate complicated, multi-step financial contracts.
Web-enabled video and collaboration features conferences can be integrated into the eSignature process to facilitate it to be simple, easy, and secure for clients to complete financial agreements online while still enjoying the best user experience. By incorporating the human aspect to complex and arduous financial contract processes, eSignature technology can provide secure and engaging interactions between financial service suppliers and their clients.
Businesses are increasingly using e-signature technology to satisfy the requirements of customers in the current digital world. E-signatures provide the most efficient customer experience regardless of location and allow you to communicate with customers online increasing the speed that documents are completed, ease of use, and speed. In addition, this technology provides the necessary level of transparency efficiency, speed, and security for all transactions, which pen on paper simply cannot match.
Although you might be wary about embracing electronic signatures, technology has advanced rapidly and it is crucial to be up to date. Benefits of using electronic signatures include the ability to provide a more efficient and efficient process of singing to your customers, thereby closing deals more quickly. It also helps reduce the amount of repetitive work required by HR departments with a faster process of onboarding and policy document acknowledgment.
So, why not invest in a reliable electronic signature provider like eSignly? It not only offers an electronic signing process that has the best security and convenience, but it also allows you to sign, save and send your documents to anyone you want, from your preferred browser, and on desktops or mobile devices as well.