How Electronic Signature Can Help Banks To Move Ahead?

How Electronic Signature Can Help Banks To Move Ahead?

Digitization involves paperless documentation that can be authenticated and accepted as a legally compliant one only when it is attested with an electronic signature. All financial intermediaries like banks, stock exchanges, regulatory organizations, custodians, registrars, and brokerages require workflow that involves a lot of signatures both from the customer and the data verification staff. With automation and digital tools taking real signatures is redundant. However, to maintain the contractual binding of an agreement, all documents have to bear an electronic signature. 

Financial services organizations like banks and asset management companies have adopted eSignature platforms to increase their operational efficiency and reduce costs of compliance and avoid risks of non-compliance. Entities are fast embracing the use of electronic signatures in all the channels of business and functional verticals of the organization. 

Globally, the market for digital signatures is gaining traction at an accelerated pace. The growth of the electronic signature market is projected to grow to USD 25000 million in the next decade. The use of electronic signatures and biometric devices is easing customer onboarding experience and reducing customer acquisition costs for organizations. 

Why do banks need to use electronic signatures? 

The opportunity cost of delaying automation is tremendous and banks have realized that consumers are attracted to efficient digital tools that help in their onboarding experience. When a consumer comes to a bank for a business loan, the need is not just dire but even the timing is critical. They are looking for quick loans that can be processed to meet their business requirements. 

If a cumbersome loan cycle process greets them in a world where the majority of businesses have moved towards automation, they will tend to look for alternative sources to fund their needs. 

If a bank is looking to stabilize its process before automating it then a significant chunk of consumers will move to other enablers like competitor banks that have scaled through automation or fintech companies that use digital tools in their operations. 

Areas where a bank can use the electronic signature

  • Account opening

The number of signatures that an account opening form needs for the sake of due diligence cannot be reduced or disregarded in banking. However, with every normal account, the plethora of business opportunities from the cross and upselling are high. A bank can always leverage its economies of scope and scale to increase the sales of other products through simple account opening.

Offering an end-to-end digital account opening that allows consumers to onboard and signs the documentation virtually without ever visiting a branch will enrich the consumer experience and create a good first impression. With third-party API verification, the documents related to personal information like ID are completed alongside eSignatures to complete the onboarding process. 

  • Loan origination

Lending is the primary business of a bank where documents need to be signed multiple times to maintain compliance and regulatory requirements. Covenants and guarantees have to be signed as assurance measures to eliminate default risk for the loan given by the bank or credit union.  

Consumer lending, small business loans, and refinancing business target consumers are the ones who expect efficient service and quick loans as they are critical for their business and personal goals. Banks have realized the potential of the market offered by these segments and have automated their loan origination systems to incorporate the use of eSignature platforms for all documentation purposes. 

The value proposition of incorporating a significant step of eSignature will keep the workflow seamless and apply the process rules to eliminate the risk of missing signatures before a loan is disbursed is high for lending business. 

Without eSignature, the business has to go through the process of connecting and requesting the consumer to come back for the missing signature. This reflects poorly on the banking experience for any client. 

  • Mortgage documentation

The mortgage business took a big hit during the subprime crisis and financial apocalypse of 2008 when banks suffered huge losses. As a takeaway from the episode, banking rules that follow the rules of Basel III were established and strict adherence to the recommendations is part of banking regulatory compliance. It is also an accepted risk mitigation measure to ensure that the financial system will not face a domino effect of default risk. 

With the integration of automation tools like eDocs, eSignatures, and eDisclosures, the filling and signing of several forms and covenants are simple and efficient. It is completed within minutes thereby sticking to time-sensitive disclosures through electronic delivery. 

When future mortgage borrowers can access the eDisclosure through apps or web browsers and can verify the documents through eSignatures without a physical appearance in the bank, time is saved. Documentation that is seamless and efficient is embraced by consumers who experience unparalleled service. 

Non-bank mortgage companies are taking a considerable share of the market size. Banks who have been holding the helm as the top mortgage lenders have to up their game through the convenience of eSignature platforms and automation of the mortgage origination cycle. 

  • Treasury and forex services

Treasury and forex services are value-additives for the banking business and often give way to the potential of upselling a loan to the client. Consumers who use their banks to manage their treasury and forex services are seeking fast and efficient solutions that optimize cash management by streamlining the accounts payable and receivable. Considering the automation of business processes is happening everywhere, a bank has to realize that if its function is not robotic, the client may consider hiring a separate accounts receivable and payable automation service vendor. Virtual signatures with relevant business automation will help banks retain this business.


The virtual signatures platform that the bank selects has to conform with the law of the land where the banking operations and stakeholders are spread. For instance, if a bank is looking to finance a project of an entity with a headquarter in Germany, then the eSignature should be in adherence to both German and American laws to stay compliant. 


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