Why Your Current Banking eSignature Software May Not be Enough

The world has moved towards digitizing a wide range of transactions across a wide range of industries. In this reality, it’s only natural that eSignatures have now become the standard way of authenticating documents, contracts, and forms. Yet while eSignatures have been legally binding for the past 20 years and existed in PDF format for the same amount of time, the world is now ripe for the second generation of eSignatures, which is mobile-optimized and far more intuitive than its predecessors.

The evolution of the eSignature

While eSignatures are commonly perceived as a relatively new phenomenon, they have actually existed in some form for quite some time now. In 1976, Whitfield Diffie and Martin Hellman came up with an early concept for a digital signature as they brought cryptography from the realm of espionage to the public space. But at that point, the eSignature was merely a theoretical idea. A year later, Ronald Rivest, Adi Shamir and Len Adleman devised the RSA algorithm, which was based more on mathematical models than a consumer-friendly interface. It wouldn’t be until 1988 that digital signatures were sold and marketed as software. In that year, Lotus Notes 1.0 used the RSA algorithm developed a decade earlier to create the first commercially viable eSignature solution. Fast forward to 1999, and an eSignature revolution took place. Now, it was possible to integrate eSignatures into PDFs, which made the use of eSignatures significantly more approachable and widespread. Yet there were still questions surrounding the legal validity of eSignatures. Did eSigntures hold the same legal weight as wet signatures? Some states already passed legislation about electronic contracts, but there was no single, unified law. On June 30, 2000, President Clinton enacted the Electronic Signatures in Global and National Commerce Act (ESIGN Act). True to the spirit of the law, it was indeed signed via eSignature. The ESIGN Act ruled that eSignatures are as legal as traditional signatures, which opened up greater possibilities for a vast array of remote business transactions. Over the years, eSignature transactions have only increased in prevalence, jumping from 89 million in 2012 to 754 million in 2017. Today, eSignatures are still most commonly associated with filling out PDFs. But is this still the optimal way? And are there any new alternatives?

Why first-generation eSignatures are no longer the gold standard

The world has changed dramatically since 1999, when eSignatures were first added to PDFs. Back then, digital was synonymous with computers and dial-up internet. Mobile phones were used for making calls and playing Snake, and little else. If somebody wanted to sign a document electronically, it would mean waiting for access to the internet, and waiting for an email with the attached PDF. Since the advent of the smartphone, everyone is essentially carrying around with them a mini-computer all times. It’s little surprise that 49% of web traffic in the U.S. came from mobile devices by the end of 2019. Back in 2015, mobile devices accounted for a mere 27% of internet traffic. Not only are people choosing to use the internet from their mobile phones instead of from desktops; they are spending more and more time on their mobile devices period. From 2012 to 2018, the total average time people spent on their mobile increased from 88 to 203 minutes per day. Consumers are using their smartphones for more tasks than ever: from checking email to trading stocks. There’s almost nothing they can’t accomplish just as easily from their smartphone. Yet when consumers try to submit an eSignature via PDF on their mobile phone, they find themselves frustrated. That’s because the vast majority of first-generation eSignature solutions require mobile users to open their email, download the pdf, and complete and sign their documents in A4 or Letter size on small screens. While it is possible for customers to sign through their mobile phone in this way, it’s an uncomfortable experience because the forms aren’t mobile optimized. Moreover, some formats require users to download a particular app in order to digitally fill out the form. Another reason the PDF format is no longer the gold standard for eSignatures is that form instructions aren’t always clear. It’s common for customers to fill out and sign PDF form, only to be notified later that it needs to be re-done. This drags out the process, increasing the sales cycle or even leading to upticks in customer abandonment rates. Traditional eSignature methods simply don’t allow for effective agent/customer collaboration. A Lightico study of over 1,000 Americans surveyed respondents who had failed to complete a contract that required an eSignature. The results show that 27% lost or forgot about it, 35% said it wasn’t mobile- or user-friendly enough, and 25% didn’t trust it. For today’s mobile-first customers, legacy eSignature solutions are insufficient to meet their needs.

The next-generation eSignature solution is made for mobile

Customers who have grown accustomed to instant smartphone transactions in all facets of their lives no longer want to provide eSignatures on clumsy PDFs. Nor do they want to download a mobile app for the sole purpose of being able to fill out a form and sign. Today’s most effective eSignature software allows agents to send customers a simple text message link, which opens up to a mobile-optimized environment where they can fill out forms, upload documents, and sign. As customers complete the process, agents stay on the phone, guiding them through the forms and answering any questions they may have. This prevents costly and time-consuming errors, preventing re-dos of forms and preventing customers from abandoning the process due to frustration. Lightico offers such an eSignature solution, and it has been proven to lead to 35% higher FCR, 25% reduction in AHT, and 15% higher NPS scores for businesses that use it. It’s also fully HIPAA-compliant, allowing companies to both stay compliant and provide the level of customer experience that today’s consumers demand.