With the COVID-19 pandemic still sweeping the nation and people largely sheltering in place, organizations across all industries have been forced to get creative in order to digitize processes and services to keep business running. The pandemic has accelerated the digital transformation plans for many government agencies and businesses, and e-signatures have emerged during this time as an essential technology that can help maintain business continuity while enabling the digitization of processes that have long remained manual and paper-based. The need for electronic signatures has been present for a long time. In fact, June 30th of this year marked the 20th anniversary of the Electronic Signatures in Global and National Commerce (ESIGN) Act being signed into law. This act enabled the use of electronic signatures for signing and storing digital documents. Another important act that has been especially impactful in the U.S. is the Uniform Electronic Transaction Act (UETA), which legally recognizes e-signatures and records as fulfilling the “in writing” requirements for transactions.
Because e-signatures are recognized as legally binding, businesses even in heavily regulated industries such as financial services can feel secure adopting this foundational technology to enable the remote signing of legal documents and further propel their digital transformation plans. Here are just some of the benefits e-signatures have to offer:
E-signatures provide a more secure method of gathering signatures than paper documents and written signatures. For one thing, paper documents are easier to get lost and can fall into the wrong hands, as you can’t track paper documents as easily as those hosted online. Additionally, some e-signature solutions provide audit trails, showing not only who signed the document but also when and where through the use of timestamps and GPS coordinates.
Once signed, the documents can be protected with digital encryption technology to prevent tampering, and integrated workflow rules can streamline business processes by advancing the document to the next step or automatically archiving it to a content management system. When combined with digital identity verification and biometric technologies, e-signature solutions can even reduce incidents of fraud by ensuring that the person signing the document is in fact who they say they are.
Reduction of operational costs
With e-signatures being processed entirely online, there is no need for manual paper documents to be signed or transported. In fact, it even saves businesses money on paper and mailing supplies and also saves time for staff who were previously filing the paperwork manually.
The consumer lending company OneMain eliminated $500,000 in annual toner costs and no longer generates thousand-foot stacks of loan papers a month after adopting e-signatures. Similarly, the Bank of Montreal estimates it will save $100 million in paper costs annually through the use of e-signatures.
Improved employee productivity
Instead of spending time on manual paper processes, such as editing errors or rewriting, e-signatures free up employees’ time, allowing them to work in a more effective and valuable way, whether it’s building customer relationships or conducting other business for the organization.
When the Wright-Patt Credit Union (WPCU) in Ohio adopted e-signatures in 2017, it was able to make its loan origination and closing process fully digital for the first time. In the first year of using e-signatures, the 15-person commercial lending team was able to triple commercial loan volume from 30 to 100 loans per month and grew its total loan portfolio 156% over the previous year.
Enhance the customer experience
One of the greatest benefits of e-signatures is that they provide an overall better customer experience compared to traditional, paper-based processes. Customers today expect digital services from the businesses they interact with, and they desire greater convenience rather than spending their time printing or signing paper documents. The Business Development Bank of Canada (BDC) dramatically transformed its customer experience by integrating e-signatures into its mobile application. Entrepreneurs and small businesses are now able to complete a loan or financing application with the BDC in just 15 minutes, entirely in the mobile channel.
Any business that wants to keep ahead of their competitors, retain existing customers and gain new ones can benefit from adopting e-signatures.
Meet and maintain regulatory compliance
Around the world, laws are catching up with the growing adoption of e-signatures. In many countries, electronic records and signatures are now treated as any other type of electronic data and are as admissible as if they were paper-based records.
In Europe for example, the Electronic ID and Trust Services (eIDAS), enacted in 2016 and fully enforced in 2018, legally accepts e-signatures for cross-border business and applies to all EU member states. However, companies that use these types of solutions should look for those that meet the Advanced Electronic Signatures and/or the Qualified Electronic Signature requirements.
Also, in Europe, the General Data Protection Regulation (GDPR) is the law of the land in terms of capturing and managing consent of the consumer, and harsh consequences are in place for those that violate this regulation, costing up to €20 million or 4% of annual revenue, whichever is larger. The use of e-signatures is the perfect way to comply with these regulations, as they can precisely capture consent and provide the details of the consent as well as comply with the opt-in requirement. E-signatures also give an in-depth audit trail of the customer’s signage, showing what they agreed to, how they signed and when, which gives legal and compliance teams greater visibility.
For certain provinces in Canada, electronic signatures are legally the same as traditional handwritten signatures. Similarly, part 2 of the Personal Information Protection and Electronic Documents Act (PIPEDA) ensures that electronic signatures and documents are given the same legal weight federally.
These examples highlight the importance of organizations remaining compliant, not just to avoid fines but also to build trust with their customer base. Having a good understanding of how privacy regulations affect your organization is a good step to achieving transparency and building trust, which are both important processes in achieving digital transformation.
Overall, COVID-19 has shifted the way that organizations serve their customers, and e-signatures are laying the foundation for the future of digital business around the world. They provide a sense of transparency, efficiency and security not found with traditional methods of signing. By increasing security, reducing operational costs, improving employee productivity, enhancing the customer experience, and helping businesses meet and maintain compliance, e-signatures provide many benefits. Organizations that take advantage of this technology will find themselves one step closer on their digital transformation journey and remain relevant, both now and in the future.