A sign of things to come

FST gathers Softpro’s Ralph Maute, Steadlands’ Peter Craik, Rolf Schröder of Wacom and xyzmo’s Gerald Cäsar to discuss the importance of eSignature solutions in the modern financial market and what the future for such technologies holds.

“Implementing an eSignature solution can speed up processes and reduce sources of error. It also enhances accessibility”
-Rolf Schröder, Wacom Europe GmbH

Ralph Maute, Product Manager eSigning Workflow Solutions joined SOFTPRO in 2000. Prior to his product management position Maute gained broad experience in challenging projects for signature capturing and verification worldwide. Being a dedicated mountain biker and holding a degree in Medical Informatics he is known for both expertise and stamina.

Peter Craik established Steadlands in 1993 in order to act as an independent sales agent for manufacturers in the electronic component industry. Product developments led the company into other fields including IT peripherals and it is sales success in the IT field, which has seen valuable growth for his company.

Rolf Schröder looks back to 25 years experience in the IT industry. He was one of the founders of Isobar GmbH and worked in the Project and Corporate Business at Canon Germany during the 1990s. Since 2002 he has worked at Wacom Europe GmbH as Business Development Manager.

Gerald Cäsar, President & CEO of xyzmo SIGNificant Group, holds a Masters degree in Engineering from the University of Linz, a Doctors degree in Technical Sciences and an MBA focused on sales and marketing. Over the last 19 years, he has held several executive positions, exhibiting a wide range of business, managerial and marketing skills in companies like SERVO DATA and CSC.

FST. What key features should an eSignatures solution possess?
Ralph Maute. According to our experience there are some factors successful projects have in common. These include the ability to choose an appropriate signature-capturing device, depending on the level of proof quality required for the particular process – and it’s our aim to be a navigator for our prospects when selecting pen pad or a Tablet PC; supporting hybrid environments where paper documents and e-docs still co-exist and in the absence of dynamic signature parameters, static features may be used for comparison; and ensuring the seamless integration into existing or dedicated processes to cover the complete electronic document lifecycle.

Peter Craik. The key feature is simplicity. Any eSignature solution, especially those involving members of the public, should deviate little from the current, trusted processes. Take a process such as a new account application form, and, if not already in electronic form, convert the paper-based system to an electronic version. At this point, instead of going through the procedure of populating the form, printing, signing, scanning, then securely storing the original, the ‘print-sign-scan-store’ can be replaced by applying a handwritten signature captured on a electronic pad and embedded into the document. The form, containing the data and eSignature, is protected using hash algorithm technology to maintain the document’s integrity.

Once the initial system is in place additional processes can be added: start with account opening, then add change of details notifications, new card or PIN requests, mortgage, loan and insurance applications, and so on. Of course as eSignature technology has matured beyond capturing a handwritten signature on a pad, standardised procedures can be developed across more sales channels; in-branch, in-field and online.

Importantly, mitigation of risk to the organisation should be ensured. Any system must meet compliance and regulatory requirements and a solution with irrefutable eprocesses and a verifiable audit trail is critical.

Rolf Schröder. An eSignatures solution should guarantee maximum security, not only as part of legal requirements, but as customers need to fully trust such solutions. With respect to the whole process and the infrastructure involved, it should also be cost efficient, and finally – and this is key for the acceptance of the solution by users – the visual signature quality has to be extremely high so that the haptics of the surface are as close to paper as possible.

Gerald Cäsar. The key features an eSignatures solution should possess include review, assent or abandon functions, enabling a transparent view and full users comprehension of what they are signing, as well as the support of various hardware devices, such as signing pads, tablet PCs and flat screens capturing signature biometric traits.

Other important features that enhance security are authentication and signature execution using multiple authentication methods, in addition to enabling multiple signatures for different parts of forms. To allow flexibility and easy integration, the eSignature solution should also include interfaces for existing applications with conversion capabilities, support of various tokens, smart-cards and soft certificates in addition to desktop and web interfaces. High efficiency is achieved with a highly scalable solution which includes mass (batch) signature capabilities and enables on the fly positioning of signature fields with automatic signature positioning functionalities for documents that have the same format. Additional features are the ability to verify incoming digitally signed documents, perform real-time comparison of signatures against pre-enrolled profiles and enable vaulting, which can be implemented as an external call to a file or content management system including PDF/A support.

FST. How can the implementation of effective eSignatures solutions drive productivity and business effectiveness for financial organisations?
PC. The ROI period following the implementation of an eSignature solution is relatively short in comparison to other capital investments financial organisations will make. The reduction in equipment and materials, as well as the risks associated with NIGO (not in good order) paperwork, handling, distribution, physical storage and secure destruction of paper documents is a major driver. Relating to paper reduction, eSignature solutions support any organisations drive towards a ‘greener’ eco-friendly message.

In addition to this, eliminating re-processing costs and creating a straight-through electronic process, an organisation’s systems can be automated, thus reducing head-count, opportunity for human error and speed up delivery of services; by having the ability to close business across more sales channels, organisations can enjoy reduced business attrition rates and improved customer service performance.

RS. Implementing an eSignature solution can speed up processes and reduce sources of error. It also enhances accessibility: electronic documents can be verified directly and be viewed in connection with other documents without searching in binders or archives. eSignature solutions also save a lot of time and money for copying or sending documents from a branch to headquarters and vice versa and make document transfer much quicker.

GC. eSignature solutions drive productivity and effectiveness for financial organisations by reducing operational and back office overhead, as when business processes become paper-free, the need to perform paper-related tasks is eliminated. In addition, all documents are available to the back office systems for real-time decision making and immediate electronic archiving, eliminating document loss, duplication or missing signatures.

These solutions also increase security and reduce fraud because the integrity of the content and authenticity of the signer are guaranteed. The eSignature helps accelerating turnaround times by avoiding searching for contracts or forms, reducing customer-waiting times. Accounts can be opened faster and withdrawals completed more efficiently, meaning that financial institutions can do more business. In addition, customers continue to sign like they always did but with an improved experience, leading to customer satisfaction and retention. Financial institutions can also increase revenue by having more time available for up/cross selling, thanks to increased efficiency of sales/consulting staffs. Finally, eSignature solutions drive improved legal compliancy and limited liability, as any manipulation within the document will result in invaliding the signature.

RM. The DSGV has reviewed the effects of electronic signing for 438 savings banks and summarized as follows: Digitizing signatures at the teller enhances the customer experience and achieves substantial cost savings.

Some banks could also optimise their back office processes, for example, Bankenservice GmbH in Berlin runs a multi-tenant system which includes specialized services such as automatic signature verification for giro processing. Their quality of stored reference data of signatures has increased tremendously thanks to the reduced effort of manual post-processing.

Fraud attempts on the documents are detected more efficiently, at a lower cost to the bank, and this characterizes a holistic approach of signature processing: The extraction of signatures from electronically signed documents for further processing is enabled, while maintaining the security and integrity of the signed documents and their signatures.

FST. Should the implementation of eSignatures be viewed as purely a technology issue, or are there other elements that need to be considered if they to be employed successfully?
RS. The implementation of eSignatures into business processes is more than just a step forward in technology. The handwritten signature is an accepted part of our daily business life. By signing, we execute a declaration of intention and this is a process that has been developed throughout history and is accepted on a cross-cultural basis today. Besides the legal aspect, the handwritten signature has a psychological aspect of a feeling of security.

GC. The implementation of eSignatures is defiantly more than a technology issue. The specific business processes have to be analysed and adopted in order to help streamline existing processes and achieve the benefits of the paperless environment. In addition, input devices could differ, depending on the organization’s needs, meaning where and how they are meant to be used.

RM. The major hurdle is to develop a joint understanding of what processes should be supported with electronic signatures and consider the relevant legal aspects that may differ from one country to another, especially when it comes to the terminology.

In general there exists a common confusion between the terms electronic signature and digital signature and our focus is on the aspects of handwritten signatures digitized throughout the signing process – so called ‘dynamic’ signatures which are also sometimes referred to as ‘biometric’ or ‘online’ signatures.

The term digital signature usually refers to a digital signature protocol using cryptographic techniques, as is sometimes applied to an electronic document. The digital signature is properly defined as a subset of electronic signatures and the idea of trustworthy digitizing of a handwritten signature was not in the minds of regulators until the late 1990s. Until today people have known little about how to use dynamic signatures in digital processes, but the technology has reached a maturity where it is now being used by several customers in banking, insurance, telecommunication, retail and other verticals.

PC. Any change to a process should be considered at a cultural level as well as technological. Any organisation will tell you that their most important assets are their customers, followed by their staff; people are key but are prone to be suspicious of change. Humans have signed paper documents with wet ink for years, even a small change such as signing the exact same signature on an electronic pad can be considered strange. Training and explaining the use of the system is essential in order to help put consumer minds at ease.

I always encourage anyone who is considering the introduction of eSignatures into their processes to ensure they have a Champion from other stakeholders within their organisations. Someone from each affected department should be included to avoid objections later in the process development; often someone in IT will not understand legal requirements and, at a minimum, it is best to involve someone responsible for process delivery, IT and legal.

FST. How are financial institutions using eSignature solutions to distinguish themselves from their competitors? What are the challenges facing financial companies in getting the best from this process?
GC. Financial institutions using eSignature solutions can distinguish themselves from competitors by enhancing their efficiency and enabling faster processes for their customers. In addition financial institutions can offer improved services given by sales and consulting staff, resulting with better customer experience, higher satisfaction and retention. Their customers enjoy improved signing processes, which include reduced waiting periods, increased security and reduced fraud with no change in their habits. Last but not least are the abilities to improve their legal compliancy, limit their liability and create a better image by promoting an environment friendly initiative.

The challenges financial companies face in getting the best from this process are getting all the necessary departments on board and aligned, by involving them in the process in order to integrate the solution efficiently. In addition to embedding the solution gradually by starting small with two to three branches, in order to learn which improvements are needed in the process, but always have the big picture in mind and, finally, secure top-management support.

RM. Besides eSignatures needing to enhance the customer experience they are expected to work in a self-explaining manner and to create the benefits described. Most of the e-signing solutions on the market have weak links when it comes to the signature itself: These solutions are primarily designed to seal a document, however, they lack a clear strategy on a minimum quality for trustworthy signature capturing, which has caused a lack of trust in potential buyers.

What might be an advantage in the first stage – as a solution may also run on a Pocket PC or on devices that do not support the differentiation into pressure levels as well as sufficient time signals – might result in disappointment whenever a signature is in doubt and needs to be verified. So, while it might be enough for quick capture, the process is neither fully secured nor has it the same level of trustworthiness.

PC. Over one billion signatures a year are captured using the technology we offer, with major implementations in banking, insurance, motor, consumer finance and healthcare markets. Our customers pride themselves on being at the forefront of technology and believe this offers them the chance to attract a best-of-breed workforce.

Successful implementations lead to smooth, uncomplicated and error-free data processing. Financial institutions who have implemented eSignature solutions find customer acceptance is fast and have reported positive feedback from their customers and staff. Obviously, as mentioned earlier, the ‘green’ message cannot be ignored, and some users promote the fact their systems are more environmentally friendly.

At the customer facing level, the challenges are few for those who follow the recommendations; involve each stakeholder department, start simply, ensure staff is well trained and able to explain the system simply and easily to the end user.

RS. Manufacturers of eSignature solutions only provide the tools for companies,  the question of how companies distinguish themselves from their competition depends on how the company can communicate the advantages of the solution to their customers.

The challenges lie in the adaptation of the processes and the continuous integration into all commercial transactions. There are definitely more areas for eSignature than only opening a bank account.