How E-Signatures Help Banks and Financial Institutions?

To derive an authentic enterprise digitization strategy, electronic signatures have a vital role in the current world. The topic becomes more enthusiastic if we are talking about its contribution towards the success of financial institutions like banks, insurance companies, and other financial institutions by minimizing the use of paper in the organizations and going digital.

The concept of electronic signatures is not new for the financial institutions of the world, as many commercial banks, insurance companies, credit unions, and many others have been adopting this technology for many years for different use cases. Retail and commercial banks, credit unions, lenders, and many other financial services organizations have been adopting e-signatures for a variety of use cases.

They know that the best E-signature helps financial institutions use to increase compliance, effectivity, client satisfaction, cost-saving, and efficiency beyond their expectations. However, they have not incorporated this technology into the organizations well because you will not find it in every business line of the institution.

Besides, the banks and insurance companies need to examine the impact of electronic signature on ROI, the overall performance of the organization, and the departments where they are using it and where they are not using as well. In the following post, we will discuss the departments where the best E-Signature has been successfully implemented and how financial institutions are getting benefits out of it.

When we talk about banks, we are discussing the services that they are providing to their clients. However, a need for improvement is always there, and the banks can do it with the incorporation of technology. Currently, for the following use cases, the financial institutions are offering technology-based solutions to their clients for making them, foolproof and properly scrutinized:

For account opening process

Many banks have allowed opening a bank account by staying at home and at any time. The insurance companies also allow you to buy the insurance policy according to their requirements. In this way, they have taken a competitive advantage over others.

However, they are facing the challenge to make it end-to-end-digital, as they have not got success in making the process such a competitive one that the new account holders need not come to the institution physically.

They still need it because they want the account holder in the bank for signing the documents with ink. In the Covid-19 Pandemic, the officials find that the drop-out rate has been reached up to 65% due to the difficulties, the clients were facing due to lockdown.

• If they implement the end-to-end- digital-process, this ratio can be reduced up to a significant level.
• However, it has been observed that many banks have made the process easier with the help of e-signature technology to eliminate the need for a physical visit by providing their customers, an opportunity to sign the documents. Some banks have been using this technology since 2016, while many are implementing it now.
• For example, BMO Bank of Montreal has been using this technology since 2016 that has enforced other banks to start implementing this technology to keep the BMO away for taking a competitive advantage, and the same is the case with other banks in the world.
• Mobile e-signing is already in use, as some banks offer this service by using kiosks. However, it is at the initial level, which needs to be used and promoted on a large scale. It is also recommended to allow users to sign the documents by staying at home and the system should be capable to cross-check it for developing compliance about the signatures.

For the process of loan request and approval

Providing the opportunity of signing the documents electronically to the clients for business and personal loans is the ultimate strategy for the banks. The reason is that banks generate money through this process, and making the whole process, stress-free is their business requirement.

To achieve this target, they need electronic signatures, electronic forms, online consumer disclosures, and technology-based processing. Signing the loan applications and contracts for the approval are other requirements for which they need to incorporate e-signature services.

If they get success in implementing the digital workflow to complete the lending process, they will get the chance to eliminate document errors and omissions because the system will not accept the wrongly-filled information.

With that, if they will be able to incorporate e-signature application for the signing process, the users will enjoy a pain-free procedure and excellent customer services that cannot be achieved with document rework.

Some banks in the United States have already implemented this process. They claim that the process of loan request and approval has been improved up to 70%. They are also confident that this percentage will improve more and they will achieve the target of improving the overall lending process to 85%.

Regarding the lending transactions, e-signature technology is growing focus because, in this way, the financial institutions can approach their clients easily. Overall, according to a customer report, the banks can help their clients by electronic signatures improve the loan process in the following ways:

• The processing time can be reduced up to 48 hours that is currently, can prolong to eight days.
• The banks can save huge amounts by reducing the expenses on scanning the documents and imaging.
• The documents errors and omissions can be reduced by 90%.
• The banks can reduce document handling costs to a large extent.
• The workflow of the process can be reduced to four steps, which consists of 16 steps with a process that is not equipped with electronic signatures.
• The bankers can save a huge time by this process, and help other clients in the loan approval process.
• They can also reduce the operations that need an office, as major tasks can be performed electronically and digitally.

Improved Wealth Management Process

For wealth management, using electronic signatures is an excellent way to make the whole process smooth and steady. The purpose of making this strategy is to shorten the process that can be of numerous sessions to a single session of paperwork.

According to research, the clients are looking for only two themes. First, they need simplified interactions, which are only possible with the digital environment. Second, they need experienced staff to advise. If they get technology and experience side by side, they will help the financial institution develop a good reputation among the masses.

CEB survey also confirms this statement, as if found that improvement in the client boarding and implementation of technology plays a key role in wealth management.

The respondents also claim that using client-facing portals and websites makes sure that the services will be improved if a respondent wants to purchase financial services or products.

For example, when Royal Bank of Canada implemented electronic signatures for their wealth management business in 2012, they found that the bankers were losing around 80,000 hours on annual basis in dealing with the clients and providing them the solutions when they were not using electronic signatures in their bank.

When they implemented electronic signature technology, they started serving thousands of more applicants, who had not been dealt with previously. In this way, they generated more for the bank.

Overall, when they implemented E-Signatures, the following ROIs helped them continue with this technology:

They saved thousands of hours that they were wasting previously.

They controlled the errors in the documents to 75%.

They saved $8,000,000, which they were spending annually as administrative expenses.

Improved Residential Mortgage Services

• Mortgage services are difficult to handle. The reason is the complexity that involves in the process to help the financial institutions keep it safe during losses. The introduction of digital mortgage with the incorporation of electronic signature has refined the whole process.
• This technology also helps the banks bring the customer on board via technology to make the whole process of mortgage convenient, compliant, and secure.
• To achieve this target, the banks have incorporated numerous technology-based solutions like e-signatures, e-documentation, and e-disclosures, etc. They are now able to send e-disclosures after completing the e-documents, and verifying the signatures electronically that is the key step for the banks to approve a mortgage for their clients.
• As the banks know that they have the competition with non-bank lenders while talking about mortgage services, it becomes necessary for them to incorporate the technology that helps them take competitive advantage.
• However, it has also been observed that these private lenders have also started incorporating technology for their mortgage clients. Besides, clients want convenience only, and if they are getting it where they are going for a mortgage, they will prefer not to go anywhere where digitization is not included yet.
• They want to keep working with only those, who offer them mobile devices to communicate, where they can find e-documents, fill without any mistake or delay, sign digitally, and get e-disclosure and e-signs at their doorstep.
• With the help of e-signature technology, the lenders have got success in reducing the time, documentation, and approval process. Previously, the whole process was prolonged to 10 days, and now, they can get the result, sometimes, within a day that is a huge success.

Improved Treasury Management and Commercial Banking Solutions

• Improving commercial banking services is always a concerning point for all the banks. The reason is that these services with treasury management are the face of the financial institution, and if something is missing in it, the banks cannot make their reputation in the sector of financial services.
• According to the banks that have incorporated e-signatures in their organizations, they have improved the services of commercial banking and treasury management in such a way that their clients can save a huge time during the processing of their applications. They receive the confirmation and updates within a minute via emails, WhatsApp messages, and SMS.
• The process of making wet signatures was also the reason for prolonged processes, which is now completed via some of the best electronic signature apps like Doc Sign Pro that is only a process of few minutes while staying at home.
• Opening the email to confirm that you are an authorized client with replying to the SMS through an authentic number completes the recognition process in a few minutes. Previously, physical appearance with the authorized wet signature on paper was complexing the situation.

Discussing overall benefits of e-signature for the banking sector

• With e-signatures, the processing, mobility, and timings will be improved. The banks need to keep them competitive in the financial market, and if they can provide the most comprehensive services at a specific time, they can maintain it; otherwise, it will become hard to compete. So, if they want to compete, they need electronic signatures.
• The banks can minimize the risk of errors with the help of technology. When the banks incorporate technology, they not only use e-signatures but also incorporate e-documents and e-disclosures. And if the user is filling the form online, the chances of errors automatically minimize.
• “As electronic signatures have a legal backup, the banks can incorporate into their systems without any legal obligations.”
• The banks can improve the performance of employees with the help of digitization. According to a research, the banks can improve their performance to 75%, as the processing time reduces, the electronically signed documents are easier to approve, and the clients feel more comfortable with the technology-based tools and software.
• You can take a definite, competitive edge over others if they are not using e-signatures. If you are technologically equipped, the clients can resolve their issues with no time and complexity. So, if they are aware of it, they will prefer you over others.
• The banks can save a huge amount that they were spending on papers previously. According to the banks that are using e-signature technology, the expenditure on papers can save thousands of dollars, as the e-signatures help the financial institutions reduce paper to use because the e-forms do not need printing. However, for that, one of the best e-signature apps is required.
• The interconnectivity has been improved among the banks, financial institutions, and insurance companies. Why is his connectivity important? Well, these institutions are interconnected with each other. The insurance companies ask for the payments in which a bank is always involved. Some clients use the services of a different bank while having a bank account in another bank.
• The digitization improves this connectivity because banks only need confirmation that they can get through online solutions. In the past, it was a long process, and clients needed to wait along for the process completion.

Conclusion

There are numerous banks worldwide that are using electronic signatures to facilitate their clients. Most banks have developed such strong solutions for digital signatures that help them carry out the most complicated processes in just a few minutes. The availability of online channels such as websites, mobile applications, and ATM channels has improved the facilitation to make sure that the currency transactions have been minimized.

Overall, the whole procedure of documentation is a way to develop a paperless economy in which the receipts and payments will be made by online applications and websites. Using electronic signature is helping the financial institutions and government authorities make sure this way of business.

In the initial phase, the banks are offering electronic signatures to facilitate them by completing all the transaction without a bank visit. Now, they can send and receive payments, pay utility bills, go for charity, as many charity foundations are connected with your banks, apply for loans, and take many other financial decisions. With the introduction of e-signatures, more processes will be completed without visiting the banks now.

From now, the banks are thinking about proven and successful ROI. Once they achieve it, they will move forward and introduce some new features like remote account openings, enterprise digitization strategy, and e-contracting.

Currently, many banks are using electronic signature technology as a shared service. However, in the future, the banks will not adopt this service as a single product; rather the value of an enterprise solution that can address everything related to online documentation, e-disclosure, online financial transactions, e-signatures, e-disclosures, and other types will increase a lot.

So, it is the time when the banks need to rethink the strategy and should evolve such solutions that can address their future requirements as well as current facilities.

Overall, a bank is responsible to provide financial services and solutions to their clients with maximum ease and protection. For that, the banks have been keeping their clients motivated by providing them the maximum services in their branches.

However, with the introduction of technology in organizations, the clients have now more aware. They expect that banks will follow the technology trends as well. So, to address this concern, banks need automation and technology-based solutions. Some solutions have already been included there, but they are lacking in providing e-solutions like e-signature, e-documents, and e-disclosures, etc.

So it becomes necessary for them to follow the footsteps of those banks that are already using technology to complete the transactions, and start implementing these features in their institutions as well.