The electronic signature revolution is here. Traditional physical signatures aren’t fit for our constantly changing, tech-savvy world. Faster, more secure alternatives are becoming increasingly common, with some experts predicting the market could balloon to $5.5 billion by 2023.
In a time when social distancing and remote work are mainstream, financial institutions are exploring new ways of doing business. Quite a few still require physical signatures (aka “wet signatures”) to move money, but the pandemic has caused many institutions to alter their processes for things like electronic witnessing, e-wills, and e-notarizations.
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These signatures are traceable, they’re time-stamped, and they create zero waste. More importantly, electronic signatures are just as legal as their written counterparts.
Finance and Secure Electronic Signatures
Electronic signatures give documents a digital footprint. In highly regulated industries, this comes in handy. The process of sending paper documents back and forth between parties can take days or even weeks, with some paperwork never getting signed in the end. By implementing electronic signature solutions, financial advisors and wealth planners can work with individuals to complete contracts faster and more efficiently, with fewer hold-ups along the way.
Many industries are already using electronic signatures successfully. Healthcare providers, for example, are using the technology to reduce the amount of time it takes to obtain signatures from patients, doctors, and insurance companies. Vermont’s government reduced its contract approval times by 75% when it started using them. And electronic petitions can collect millions of signatures over a few weeks — something that would have been impossible to do with paper.
Moving away from traditional signatures and implementing electronic solutions instead can dramatically reduce the time and effort required to complete certain tasks, essentially turning hours of work into mere minutes.
Electronic Signature Security Requirements
Financial services firms are heavily regulated and face massive legal consequences if they don’t follow the rules. The SEC’s newly implemented Regulation ‘Best Interest’ is a great example of just one new set of guidelines for wealth managers to follow in their day-to-day. Security is a major part of this regulation, but it’s also the reason so many institutions still rely on wet signatures.
For professionals who have been affected by the pandemic and want to make the leap to electronic signatures — but perhaps aren’t sure how to do it safely — here are three ways to implement stronger security measures:
1. Make sure you have access to the right features.
Look for a solution that gives you the ability to implement:
- Public key infrastructure (PKI). This is one way for digital signatures to confirm the identity of the people signing documents. There are two keys — one public and one private — that provide users with their own identification and protect their information from theft or tampering. You can use a PKI tamper-evident seal, which ensures that the document hasn’t been changed or tampered with after it was signed.
- Two-factor authentication. Increased authentication measures can be added to electronic documents to ensure that only authorized individuals can access sensitive information. This usually comes in the form of a unique code sent to a user’s mobile device to verify that they’re trying to access the document.
- Certificates of completion. These certificates provide detailed information about each party or signer with access to the document. This includes details like the signer’s IP address, consent to the use of e-signatures, time stamps, and the electronic signature image of the signer.
- Audit trails. Signatures on hard copies can be forged, paper can be damaged or lost, and confidential information could be shared with unauthorized individuals. Most electronic signature solutions provide an audit trail for documents, including a document history that shows which user made changes and when those changes were made. An added layer of security includes geolocation, which provides the location where the document was signed. This trail is available to all parties, and it can help resolve any disputes that may come up between signers.
2. Don’t forget about physical security.
Electronic signatures need electronic security, but digital measures are the result of physical infrastructure. Things like geographically dispersed data centers with on-site security as well as malware protection, firewalls, and rapid data replication will ensure your confidential information stays protected.
3. Explore the possibilities of blockchain.
Most people are familiar with blockchain as it relates to cryptocurrency, like Bitcoin. However, the technology has made its way into some unexpected industries, such as supply chains, because of the level of security it provides. Blockchain helps individuals and companies avoid fraudulent transactions by allowing them to share data in secure, tamper-proof ways. In short, it’s a ledger that records transactions between parties in a permanent, verifiable way that doesn’t require modifications.
When it comes to meeting the standards needed to combat the pandemic, it’s important to make sure that something as official and binding as a signature is as secure as possible — but still socially distant. Gone are the days of wet signatures. Now is the time to step into the future and give people more peace of mind.
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