In Part 1 of this series, we looked at how remote electronic signing can help banks with faster onboarding, reduction in operational and legal risks and enhancing operational efficiencies in relation to corporate banking clients. The direct savings from that alone can run into the millions. If we account for the opportunity costs of not having remote electronic signing solutions, that cost can be much higher.
We continue the discussion by examining more specific cases, such as contracts and documents requiring multiple signatures, and how data integrity can be maintained more effectively with remote electronic signing solutions.
Maintaining Data Integrity
As perceived by company executives, many surveys put cybersecurity as one of the top current business challenges. For banks, this is especially true as the potential payoff for malicious actors targeting the financial system is markedly higher. While it is true that most of the attacks are against retail customers, that is attributable to the fact that they represent the vast majority of the client base. However, when corporate clients are targeted, the value at risk is high enough to cause major headaches for most executives.
Maintaining transactional data integrity and non-repudiation is a major requirement for banks when dealing with their corporate clients (and even retail customers. A digital signature ensures data integrity and provides legal value to the signed document. With a Qualified Electronic Signature implemented, it can be guaranteed that the document hasn’t been altered while in transit, eliminating the risk of fraud. The eIDAS regulation provides the necessary legal value to such signatures. What-You-See-Is-What-You-Sign (WYSIWYS) technologies further ensure protection from document tampering and give users the confidence that the document is genuine.
In addition to data integrity, non-repudiation is also ensured by qualified signatures. This means that signatories cannot deny the validity or authenticity of their signatures. This can be a significant factor in addressing certain types of fraud cases and has the potential to save millions in fraud losses and legal fees associated with these cases. It is a strong argument for applying Qualified Electronic Signatures (QES), giving an enhanced probative value and the legal standing equal to a handwritten signature.
Only Qualified Electronic Signatures have the legal equivalence of handwritten signatures. An advanced electronic signature-based solution would not be sufficient for cross-border transactions. Especially if they require the highest legal value. QES is the only standard that offers that certainty at an international level.
Many banking documents require multiple signatories to sign documents. This process can become lengthy if signatories are spread across geographies and the document must physically travel to each signatory and be signed as per the applicable governing laws. This is especially true for subsidiaries located in foreign countries. Remote electronic signatures offered by eIDAS-compliant qualified trust providers can help streamline this process immensely.
This can also be useful in specific cases where multi-party agreements must be signed. For example, a bank, a local client company, and the client company’s parent entity, acting as a guarantor for the local entity. Another example may be a tri-party agreement between a bank, a client, and the client’s vendor where a channel financing facility is to be provided. Imagine a large company with multiple such vendors – the time to process all the contracts could become prohibitively high without legally binding remote electronic signatures eIDAS enables.
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