Digital signatures in BFSI: From start to finish

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Digital signatures in BFSI

Introduction 

Digital signatures have been a hot topic in banking circles for some time now. Banks are looking to adopt this technology to speed up their business processes and save on costs. However, there are still many questions surrounding using digital signatures in banking. This article will attempt to answer some of the most frequently asked questions about this topic. 

The digitalization initiatives of banks are being driven by more than just client expectations and habits in the ever-expanding digital environment. Our society has grown to understand the value of sustainability or switching from paper to digital procedures. The digital revolution’s impact has also already permeated many other aspects of our lives. We can shop, meet up with pals, or watch our favorite shows online and virtually. This has kind of become the standard for us. We expect that banking transactions follow this “normality.” Because of this, OmniChannel concepts are seen as successful and cutting-edge. From the banks’ perspective, this entails cultivating long-term customer loyalty and satisfying customer needs. 

The corona virus epidemic also serves as a reminder of the value of digitization. Companies and banks alike are stepping up their efforts to push digital initiatives in particular because of the necessity to work remotely or from home and to secure the freedom to do so. The use of an electronic signature in this situation makes it possible to enter into contracts or conduct other comparable activities from anywhere. 

 What are digital signatures? 

A digital signature is an electronic equivalent of a handwritten signature. It is used to verify the identity of the sender of a message or document, and to ensure that the content of the message or document has not been tampered with. Digital signatures are based on public key cryptography, which uses a pair of keys – a public key and a private key – to encrypt and decrypt information. 

Digital signatures in BFSI: From start to finish

 How are digital signatures used in banking? 

There are many potential uses for digital signatures in banking. One of the most obvious is the signing of contracts. Instead of having to send paper documents back and forth, both parties can simply sign electronically. This saves time and money on postage and printing costs. Digital signatures can also be used for things like opening new accounts, applying for loans, and making online payments. 

 Are digital signatures legal? 

Yes, digital signatures are legal in most countries. In fact, many countries have laws that specifically recognize the validity of electronic signatures. That said, it is always best to check with your local laws and regulations to make sure. 

What are the benefits of using digital signatures in banking? 

There are many benefits to using digital signatures in banking. As we mentioned before, one of the biggest benefits is the time and money that can be saved by eliminating the need for paper documents. Digital signatures can also help to reduce fraud, since they make it much more difficult to forge someone’s signature. Additionally, digital signatures can provide a higher level of security than traditional signatures, since they are more difficult to copy or counterfeit. 

Are there any risks associated with using digital signatures in banking? 

As with any new technology, some risks are associated with its use. One of the biggest risks with digital signatures is that they may be compromised if the private key is stolen. Additionally, if a digital signature is used to sign a fraudulent document, the victim may have difficulty proving that they did not actually sign it. However, these risks can be mitigated by using strong security measures and keeping the private key safe. 

Digital signatures are a hot topic in banking circles for a good reason. They have the potential to speed up business processes and save banks a lot of money. While some risks are associated with their use, they can be mitigated by taking proper security measures. If you’re considering using digital signatures in your bank, be sure to do your research and consult an expert to make sure it’s the right decision for you. 

What an ideal digital signature solution for banks must offer 

An ideal digital signature solution for banks must offer a high level of security, be easy to use, and be legally binding. The solution should also allow for the signing of documents from anywhere, and provide a way to track and manage signed documents. Additionally, it should integrate seamlessly with existing bank systems and processes. 

A suitable solution should be adaptable and consider authorizations, process sequences, and potential decentralized structures in addition to the complexity of the banking industry. It must ensure that the right people always receive the proper documents to sign, even if their roles change. 

In order to enable customer-centric integration of electronic signatures throughout the customer journey, banks should also rely on software that can consider all user interfaces (customer portals and platforms, CRM systems, etc.). 

 Things to contemplate during implementation 

Four general inquiries can be used to construct a signing process: 

  1. What kind of document needs to be signed, first? What kind of signature is needed in this case? 
  2. How many distinct signatories are there, and how frequently do they sign, if a qualified electronic signature is required?
  3. Have the documents that need to be signed already been generated or are they just now becoming available?
  4.  How does the signing procedure operate?

 Depending on the type of document and the requisite evidential value, either a simple, advanced, or qualified signature can be used—or must be—in that situation. Experience has taught us that banks must produce a large number of internal documents that must be signed by all parties. This includes, for instance, the management of tasks like credit approvals, credit checks, and customer ratings, among other things. The majority of these documents are made in Word, filled out by various departments and individuals, then approved, signed, and submitted at the end. If the so-called written form criterion pertains to the application, qualified electronic signatures are accepted and are regarded as being equivalent to handwritten signatures. 

 Conclusion 

Digital signatures are a powerful tool that can help banks save time and money. However, before implementing them, it’s important to understand the risks involved and take proper security measures. Consult an expert to make sure digital signatures are right for your bank.  

What are your thoughts on using digital signatures in banking? Let us know in the comments below. 

Certinal is a wholly-owned subsidiary of Zycus, the pioneer in Cognitive Procurement. A familiar name and market leader with years of experience managing critical contracts & agreements, Zycus boasts of over Fortune 1000 enterprise clients and deployments of procurement and sourcing suite of products. Digital Signing has always been a focus area for Zycus. Thus, Certinal was born to offer a best-in-class Digital Transaction Management solution that will be easy to use, 100% secure to deploy, and legally compliant worldwide. We stand committed to providing a one-stop solution to large enterprise customers, compliant with various security standards and conforming to different regional regulations. Book a demo now! 

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Digital Signature Platform for Global Organizations by IDC