Don’t be fooled. While eSignatures are great for some things, they’re not a complete digital solution for financial services. Here’s why.
Why do we sign things, with eSignatures or real ones?
If you’ve ever bought a house, gotten married, or opened a bank account, you’ve probably wondered:
"How does scrawling a scribbly line across the bottom of this piece of paper make me a legal owner/spouse/confirm that this bank account is mine?"
When you really think about it, this makes absolutely no sense. In fact, the signature is the last holdover from an ancient time.
Where the signature came from
Traditionally, documents were signed with wax seals for families or royalty, and then into signatures for individuals.
By the time the renaissance rolled around, artists were signing their work in all sorts of flouncy script, so the signature itself was part of the artwork.
From the artists, the signature eventually jumped to officialdom and was used in courtrooms and legal proceedings in the UK in the 1700s. From there, it was a short leap to banks – and the rest is history. But here's the thing:
Signatures are completely useless today.
With digitization, the paper signature is no longer a viable authorization mechanism:
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It tends to change over time.
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It’s relatively easy to fake/commit fraud (my signature, for example, is just a straight line).
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It ties digital processes to paper authorization.
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It’s super annoying.
Of course, these problems are nothing new. And in response to changing business processes (particularly how consumers buy financial services) the eSignature was born.
Using digital encryption tools, eSignatures have become commonplace. What’s more, they’re legally binding almost everywhere in the world. Most of us have used eSignatures to purchase things online, verify documents, hire employees, or sign contracts.
And, with plenty of eSignature software on the market, it’s easy for any business to go paperless with eSignatures. The only problem is, despite their ubiquity, eSignatures are hardly the end-to-end digitization strategy that they’re so often billed as.
Limitations of eSignatures
While good at turning a squiggly line on a piece of paper into a squiggly line on a screen, eSignatures are often presented and used as a complete digital solution.
The argument goes like this:
With eSignatures and fillable PDFs, we can accept and process customers in a digital way! No more scanning documents back and forth, deciphering cramped handwriting, or dealing in paper at all! Goodbye shredder, hello delete button!
But before you get carried away with the quick and dirty digital transformation I just outlined, it’s worth mentioning a few things.
1. When you implement digital signatures and use fillable PDFs, you only digitize a tiny portion of the customer journey.
Your customers can now complete processes with their computers, but they still need to engage with clunky forms, and I think we can agree that this is not a great user experience:
2. eSignatures and fillable PDFs fail to leverage a full suite of digital tools.
Clickable buttons, drop down menus, auto-completion, data being carried through from one section to another – these are all options that exist in a digital system that don’t exist in a paper-based one. By relying entirely on fillable PDFs and eSignatures, companies fail to take advantage of these benefits.
3. eSignatures and PDFs, while they can go mobile, exist overwhelmingly in a desktop world.
And with mobile continuing to increase in importance and value, it’s only natural that processes currently powered by eSignatures will be drifting onto smaller and smaller screens.
eSignatures fill a critical function in a digital ecosystem, and they are a powerful tool to help reduce friction between customers and companies, particularly at the early onboarding stage.
However, when it comes to creating a digital experience, eSignatures are only the tip of the iceberg. There are a range of other tools that can help companies provide the experience their customers want while meeting internal audit, legal, and regulatory needs.
4. eSignature software doesn’t allow pre-completion of forms.
For most enterprise organizations, a constant customer pain point is that you need to ask for the same information again and again. Disconnected processes mean that even if you know a customer’s address because they have a mortgage with you, you still need to ask for it when they apply for a credit card.
A security wall, where clients log in, can help reduce these problems, since it allows you to store information about your customers in a secure way.
However, there are always going to be processes that exist outside that kind of protected system.
eSignatures don’t enable processes to accept new information from existing databases, and require the same information to be completed again and again.
What does a digital solution look like?
To provide a positive digital experience, the first step is to use your digital toolbox. This is where the user experience comes in. Take, for example, applying for a small business credit card.
A bank used to require its applicants to come in-branch to fill out paper forms, sign them, and then wait a week or more to find out if they were approved.
The bank digitized its process and now applying for a small business credit card is fast and easy, and they even autofill their addresses as you type:
What’s more, they only show you questions that apply to you and don’t force you to scan through each question when it isn’t even relevant.
They also use tricks like big, clickable boxes and responsive design so the experience is the same on phones, tablets, and laptops.
This is the caliber of experience that consumers expect across all digital transactions, regardless of whether they’re applying for a credit card or buying life insurance. And this is what a true digital solution looks like. It’s not just digitizing existing paperwork by uploading a fillable PDF, implementing eSignature software, and calling it a day.
It’s about understanding all the tools that you have access to, and deploying them in a way that customers want.
Future of eSignatures
It’s easy to understand the appeal of eSignatures.
They enable organizations to keep their processes largely the same, and make it easier for customers to buy things online. They facilitate the digital purchase of big ticket items like houses, cars, and financial products to try and make buying them as easy as buying new shoes online.
However, the mistake we so often see is relying on eSignatures as a complete digital solution.
The reality is, they’re only ever going to be one piece of the digital transformation puzzle. eSignatures do a fantastic job of adding legal weight to online decisions, such as opening a bank account or applying for a mortgage. And eSignatures do eliminate the print/scan/send back to company buying cycle customers often get stuck in.
But unless we build supporting elements with our digital toolbox, we’re never going to improve the customer experience to meet rising expectations set by the likes of Amazon and Shopify. And as more and more FinTech companies enter the financial space, consumers will start voting with their wallets for great experiences, not just good ones.
To be on the great list, enterprise organizations have to move past eSignatures, and fully embrace their entire digital tool box. That, or risk being left behind.
