Banks are suffering from an excessive and painful amount of paperwork, whether it’s related to new account opening or servicing. Agents are spending disproportionate amounts of time printing and scanning documents, and chasing their customers to provide signatures –– leading to turnaround times that are unacceptable in today’s fast-paced world. However, eSignature platforms provide an answer to these problems by allowing agents to collect customer consent instantly and in real time through customers’ mobile devices.
The problem with traditional paperwork and signatures
Many banking processes require signatures, including account opening (onboarding), mortgage applications, personal loans such as signature loans, and wealth management. Even modifications of existing agreements, such as loan deferrals and forbearance requests require documents and forms to be signed and submitted. While collecting customer consent is necessary for staying compliant, most frontend systems are outdated and cumbersome, making it hard for customers to complete transactions in a timely and efficient manner.
Banks face even longer turnaround times and abandonment rates when multiple signatures are required to complete a transaction. This is a common scenario for both retail banking customers, such as spouses with a joint bank account, and commercial banking customers, such as organizations with multiple stakeholders. It’s challenging enough to get an individual to sign physical banking documents in a timely manner; it’s exponentially more difficult when several players are involved and coordinating schedules is required.
Physical paperwork was born out of a need to fulfill compliance requirements. On the surface, this may seem like a necessary evil. After all, banks need to make sure that people applying for credit cards or taking out a loan are not going to default. In particular, younger and low to middle-income earners have to produce and sign a great deal of paperwork due to a lack of history at the bank, or no credit or mediocre credit scores. As fears of fines and litigation grow, there’s no choice but to add more and more layers to banking applications. Or so the thinking goes.
eSignatures are a better alternative for banks
Thanks to technological innovations, there are multiple ways banks can easily fulfill compliance requirements while providing a fully digital banking experience.
Here are some of the capabilities eSignature platforms include that can simplify and fully digitize banking customers’ experiences:
- Instant, 24/7 mobile communication: Generation Z and low to middle-income customers often don’t have a desktop computer, and they certainly don’t have a fax machine. Yet all of them carry a smart mobile phone. Banks can greatly increase the likelihood of them completing applications by meeting them where they are.
- eSignatures: With a simple finger swipe, customers can send banks their John Hancock. The document is then locked and stored on the bank’s CRM with a fully time-stamped audit trail.
- eForms: The best solutions on the market allow banks to convert traditional forms and PDFs to mobile-friendly, pre-populated forms (or auto-fill options in the case of new clients). When new compliance regulations are introduced, it’s easy to update the forms.
- Digital ID verification: With a snap of a camera phone, customers can take and upload a selfie or forms of ID. Digital ID checks through KBA, OTP, or photo ID verification allow banks to fulfill their Know Your Customer (KYC) and anti-money laundering requirements — while saving customers a trip to the local branch due to a missing piece of ID.
Besides the convenience it brings, biometrics with two-factor authentication and a geotag is more dependable and compliant than a fax machine or Fedex.
The benefits of an eSignature solution for banks
The benefits of providing an instant mobile experience are tremendous. It results in significantly reduced customer drop-out during the application process, eliminating the usual bureaucratic barriers to entry. Banking customers will stop drifting towards new fintechs and neobanks, and start using their primary bank for all services, even the complex ones. And the overhead costs associated with maintaining physical paperwork are drastically reduced. All this while maintaining — or even surpassing — current compliance standards.
Today, customers who need to provide consent for any number of banking transactions should be able to easily do so without having to find the time to go to a bank branch, or deal with fax machines and printers.
These are the some of the benefits financial institutions can expect to gain by adopting an eSignature solution for banks:
- eSignature solutions enable faster customer onboarding, as customers don’t need to spend time going to a physical branch and signing stacks of papers.
- Conversion rates and sales are boosted thanks to the ability to capture customer consent in the moment via mobile.
- Operational costs are slashed and productivity increases, as agents waste less time and effort filing paperwork.
- Customer experience is enhanced, which contributes to banks’ NPS scores, boosts loyalty, and decreases the likelihood of churn.
- Providing seamless digital capabilities like eSignatures positions traditional banks to stay competitive with contender neobanks and fintechs.
- The top eSignature solutions also provide KYC and ID&V procedures required for compliance.
Whether banks are handling onboarding new accounts, or providing essential services to existing customers, eSignature software for banks remove the painful friction that comes with physical paperwork.