User experience is always front and centre when it comes to attracting retail consumers. But what about corporate and institutional banking? Surely large corporations with dedicated finance departments have things other than just user experience on their minds. Are remote signing solutions worth it for them?
The answer to that question is a resounding yes. This two-part series explores the benefits of remote electronic signatures from the perspective of corporate banking clients – both big and small. The potential savings, as it turns out, can run into the millions.
Onboarding new clients is a time and cost intensive process for banks. In addition to credit risk management, a number of regulatory checks have to be performed as well. This includes things like KYC checks for all directors/ signatories etc., beneficial ownership analysis, various contractual documents etc. The tally of the number of documents to be processed can run into the hundreds for a single large corporate client. Handling such volumes can lead to delays as mistakes or signature mismatches are spotted and need to be rectified.
The cost impact of this cannot be understated. In addition to the direct cost of on-boarding, there is also an opportunity cost, as for every single day the client is not on-boarded, there is significant revenue that is being left on the table for others to extract.
Remote electronic signing can put a real dent in this problem. Qualified Electronic Signatures (QES) come with a qualified digital certificate that is generated by a qualified signature creation device. This certificate guarantees authenticity of the electronic signature and proves the identity of the signatory in a legally binding manner. Banks can use this to greatly reduce the on-boarding time and potentially save millions in lost revenues.
Signed documents are not only required during on-boarding, but also for daily banking operations. Any sizeable banking relationship will likely have scores of unique products and services being offered across dozens of countries. The mere maintenance of this relationship itself requires a lot of paperwork to move to and fro between the client and the bank on a daily basis. Even with host to host solutions, there are exceptions which need to be handled.
eIDAS complaint Qualified Electronic Signatures can help here as well by making remote digital signing possible. This can help in the daily transactional flow by:
- Reducing the manpower necessary to process requests, which saves costs
- Ensuring data integrity and non-repudiation of origin
- Greatly reducing the time required to process such documents
- Decreasing operational risks as the potential for fraud or acts of omission is reduced
- Reducing the need for paper documentation or using courier services (which might be minuscule in comparison to other overheads, but it can help banks support their green initiatives)
Banks focusing on digitization require a solution that offers a legally binding remote electronic signature service that does not compromise on security. It is possible that some financial services firms may prefer a hybrid solution if they foresee use cases for both Advanced and Qualified Electronic Signatures. A hybrid solution would be very cost effective in such cases as QES may be used for signing onboarding/ contractual documents and adding its use for certain high value transactions (above a certain threshold) would provide the benefits of QES without additional cost burdens.
With all of these benefits, banks would be able to forge closer ties with their largest clients. As operational efficiencies improve, the business relationship becomes more “sticky” and the cost to switch to another service provider becomes higher. The client would have less of an incentive to move away from a perfectly fine-tuned existing relationship and would assign a higher value perception to the existing relationship.
We continue this discussion in Part 2 of our series.
References and Further Reading
- Selected articles on eIDAS (2014-today), by Gaurav Sharma, Guillaume Forget, Jan Kjaersgaard, Dawn M. Turner, and more
- Benefits of the eIDAS Toolbox – Case Studies from Various Industries (Part 1) (2018), by Gaurav Sharma
- Benefits of the eIDAS Toolbox – Case Studies from Various Industries (Part 2) (2018), by Gaurav Sharma
- Digital Trade and Trade Financing - Embracing and Shaping the Transformation (2018), by SWIFT & OPUS Advisory Services International Inc
- REGULATION (EU) No 1316/2013 establishing the Connecting Europe Facility, amending Regulation (EU) No 913/2010 and repealing Regulations (EC) No 680/2007 and (EC) No 67/2010(12/2013), by the European Parliament and the European Council
- Selected articles on Electronic Signing and Digital Signatures (2014-today), by Ashiq JA, Gaurav Sharma, Guillaume Forget, Jan Kjaersgaard , Peter Landrock, Torben Pedersen, Dawn M. Turner, and more
- Selected articles on Authentication (2014-today), by Heather Walker, Luis Balbas, Guillaume Forget, Jan Kjaersgaard, Dawn M. Turner and more
- eIDAS webinar 1: Using electronic Identification, Authentication and trust Services for Business (2018), by the European Commission
- The European Interoperability Framework - Implementation Strategy (2017), by the European Commission
- Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (2016), by the European Commission
- REGULATION (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (2016), by the European Parliament and the European Council
Proposal for a REGULATION concerning the respect for private life and the protection of personal data in electronic communications and repealing Directive 2002/58/EC (Regulation on Privacy and Electronic Communications), (2017), by the European Parliament and the European Council
- Revised Directive 2015/2366 on Payment Services (commonly known as PSD2) (2015), by the European Parliament and the Council of the European Union
- REGULATION (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC (2014) by the European Parliament and the European Commission
DIRECTIVE 2013/37/EU amending Directive 2003/98/EC on the re-use of public sector information (2013) by the European Parliament and the Council