How Banks Can Use eSignatures to Empower Rural Communities
By Leor Melamedov
It’s not easy for rural customers to access the banking services they require. Branches are usually out of close walking or driving range, limiting this population’s ability to take care of banking tasks on the fly. Fortunately, eSignatures and other digital tools are bridging the gap, allowing people in remote locations to gain equitable service. And by helping banks better serve rural communities, digital tools can help financial institutions meet their ESG goals.
Bank Branches Fail Rural Communities
Banks tend to be located further away from rural customers, making it challenging for customers to visit. Whether they need to open a bank account, apply for a loan, update information, or request a new credit card, requiring in-person visits places a high burden on this community. Customers need to take time out of their schedule and drive long distances to a branch during limited opening hours.
At the same time, branches are drying up. The number of FDIC-insured institutions dropped from a peak of 18,083 in 1986 to 5,033 in 2020. And the number of banks with under $1 billion in assets fell from 17,514 to 4,116 during that period, according to a March 2021 report by the Congressional Research Service. The coronavirus pandemic and digital revolution that accompanied it only accelerated this decline. Many branches merged together, staying put at high-traffic locations and becoming even less accessible to people in far-flung towns.
This leaves behind what’s known as a banking desert, defined as census tracts in which the central point has no branches within a 10-mile radius. According to the Federal Reserve, there are over 2,100 existing and potential banking deserts. More than 1,500 of those are situated in rural areas.
Now, imagine the following typical scenario: a customer shows up at a distant bank branch (or credit union), paperwork in hand, only to be told that they are missing information. They are forced to come back another day to supply those missing documents. Between family and work obligations, and the long traveling distance, that customer is now set up for frustration. Their loyalty is tested. And the bank is using up precious resources to manage this prolonged process.
Rural Households Are Ready For eSignatures
In contrast to the dearth of accessible branches, 75.6% of rural customers have access to a smartphone, and 68% have access to the internet in their homes. This means that a majority of rural customers have everything they need to interact remotely with their banks.
While the CFPB is increasing outreach to underserved rural areas, financial institutions can harness the power of mobile-first technology to reach them faster.
Switching to fully digital transactions is also in the best interest of banks themselves: Both retail and commercial banks spend a disproportionate amount of time processing paperwork, including chasing after customers to provide consent. This is a major area of concern for banks, as many processes require signatures, including account opening (onboarding), loan applications, and disputes.
But when banks depend on traditional wet signatures, things go awry. As we’ve seen, customers, especially those from rural areas, struggle to show up at branches in a timely manner. And agents lose precious time printing and scanning forms, and chasing those customers for missing documents and signatures.
eSignatures are the antidote for this customer (and bank) pain. But not just any eSignature solution will do. The best eSignature solution goes beyond older formats such as PDF and Word, which are not optimized for quick and instant mobile completion. They require customers to have special software installed, and be in front of a desktop computer. Signing and filling out forms from these formats is possible but difficult to carry out from a smartphone. And underserved communities don’t need any additional layers of friction.
Unlike traditional eSignature solutions, mobile-optimized platforms are accessible to anyone with a smartphone. The best eSignature solutions available on the market today put the mobile experience at the heart of the eSignature, while still allowing customers to fill out forms and documents and provide a signature through a computer or laptop if they choose. These solutions don’t require customers to download an app; all they need is a smartphone instant messenger.
How the eSignature Process Works
Once agents and executives are aligned on the new eSignature solution, and once agents have been trained to use them, the next part is to set them up in the greater digital workflow.
It’s easier than it sounds. An admin simply enters into a console with a drag-and-drop interface, configuring business rules to trigger requests for eSignatures. For example, customers may be required to add their eSignature to some digital documents, but not others. Admins can set up relevant rules based on conditional logic (“if”/”then”).
Here is what the eSignature flow looks like once configured:
Not only is it very easy for customers to sign from any digital channel, from any location, it’s easy for agents to receive them in the moment, when they are instantly stored for future reference. There is zero lag time between any of these steps, allowing eSignatures to be a seamless part of the customer-facing workflow.
The Bottom Line: Reach Rural Communities With eSignatures
Banks can accommodate the needs of rural communities by offering fully digital experiences, including eSignatures, for all kinds of transactions. By allowing customers in distant locations to receive complete digital services, banks can help bridge the gap between different groups. Lightico offers instant and mobile-first eSignature solutions, as well as remote ID verification, eForms, document collection, and mobile payments to allow customers to complete entire journeys online. To learn more, visit Lightico.com.
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