Digital banking—with easy and convenient accessibility—is how consumers expect to bank today. It stands as one of the most important considerations in the consumer decision-making process when they choose a personal bank relationship. A poor online experience can result in consumers switching institutions—while a favorable one can strengthen customer and brand loyalty. As a result, digital banking experiences now form the cornerstone for building customer satisfaction programs and continue to gain in importance. Despite the efforts applied to remote banking capabilities and mobile experience, banks struggle and generally fall short in providing a modern, digital banking experience across all channels.
While today, consumers may not visit branches as often, it is paramount that branch technology keeps pace with digital banking trends, especially since so many other daily activities revolve around digital “on-demand” access. Financial institutions should ensure that the in-branch experience is just as convenient, simple and pleasant as an online digital transaction. If not, savvy consumers will quickly recognize the deficiencies and their loyalties will shift.
In short, you don’t want to disappoint your customers when it comes to their banking transaction experiences. Your objective should be to delight them.
The challenge we face today centers on the increasing emphasis on the total digital experience. But the required signing of documents to complete an account opening or loan application, for example, is usually overlooked. Digital strategies fall short of a full, complete online session as most institutions still default to paper-based document signing, whether through branch appointments or courier-based delivery and return. This does not meet modern consumer expectations and results in frustration and disappointment.
In contrast, eSignatures enable a comprehensive digital transaction process. They extend new levels of convenience and elevated services with the simplicity expected in today’s digital world.
The eSignature basics
To be sure, the migration to eSignatures isn't an automatic affair. For starters, the array of laws governing electronic signatures is complex; these include the federal E-Sign Act (on the books since 2000), and state laws that fall under the Universal Commercial Code (UCC). Additional rules and regulations govern electronic transactions for specific industries.
But the good news is that financial services companies can implement accepted guidelines and strategies to ensure electronic signatures meet all regulatory requirements.
And once in place, this capability has a particularly important role to fill. Let’s start with customer experience, which occupies the mind of every bank executive. As consumer demand for digital services rapidly grows, banks labor to find new, innovative ways to efficiently deliver products and services.
For instance, instead of giving a customer a paper document to sign, banks can offer a tablet so they can review and electronically sign the form, and complete the transaction entirely on the device. By using newer touch screen-based devices, employees can sit with the customer to review documents and guide them through the process in a more personal and relationship- building atmosphere.
Customers can complete a new account opening, loan document signing or a simple address change in a single online session, fulfilling a complete digital lifecycle.
Creating a dynamic digital customer experience drives loyalty and repeat business; it also fosters word of mouth conversations as customers share their digital experiences with coworkers, friends and family. Accommodating a consumer’s complicated schedule and enabling them to engage with their bank on their preferred channel allows banks to move away from a shallow transactional relationship towards a richer experience.
Simplification via eSignature
With eSignatures, banks can also process more transactions without adding any extra staff, which improves the time-to-value. It can also streamline back office functions and reduce transaction time to minutes as opposed to the hours, days or weeks it may have taken previously.
Once the consumer has authenticated their identity, they can immediately complete the document signing process. After the signing ceremony is completed, transactions and documents follow downstream back office processes electronically. This also eliminates delays and manual errors associated with cumbersome paper-based document handling.
Key security concerns
Data breaches continue to pose threats. Thus safe, secure transactions add up to essential considerations for every digital strategy. Security and data integrity technologies to protect the financial institution and its customer are built into eSignature technology.
During the electronic transaction, for example, signing parties can be authenticated using a variety of secure technology options, including knowledge-based authentication (KBA) as well as text-code authentication. These “out-of-wallet questions” or cellphone text messages confirm identity and protect the legal enforceability of the transaction by providing documented attribution to each signing party. In addition, eSignatures use tamper-resistant validation techniques to protect the integrity of the document after signing is completed.
Audit trails of individual activities are created throughout the transaction. The activity and tasks during the signing ceremony are collected and documented, including the actual IP address of the machine or device used for signing. The audit file is subsequently stored with the completed/signed documents in the financial institution’s imaging or document management system.
That said, customers may decide at some point to drop out of the online process and complete an application offline, a process known as “dropping paper.” As Brad Powell puts it in a recent post for Axiaware, “Many of us would like to live in a super-efficient, cost-effective world where all transactions are handled without paper. But that’s not always going to happen. The ability to drop a transaction to paper smoothly and without negative ramifications is a key step in the eSignature process.”
Putting it all together: A sign to follow
With competition for deposits springing up in non-traditional arenas—and consumers trending toward a best-of-breed approach to manage their financial life—banks need to wield the right tools to retain their current customers and appeal to new ones. Banks have a unique and unprecedented opportunity to engage, retain and create loyalty in new channels and with personalized service.
By improving a once mundane and inconvenient process (albeit an important and necessary one), banks can enhance service, streamline processes, and boost security and compliance. Very often the most challenging piece of the puzzle is determining how to meet consumer demand.
To those ends, eSignatures can provide the simple answer to a complex digital banking question—with more banks and credit unions ready to sign on so their satisfied customers can sign off.
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Michael Ball is vice president of markets and strategy for IMM.
For more articles like this one, check out our recent Executive Report: Fraud and cybersecurity: Staying steps ahead