We’ve come to a point in time were holding a piece of paper that someone else has touched can be a dangerous endeavor. Clearly, the pandemic has altered the way we do business. But, perhaps a more positive way of looking at our mostly homebound situation, is to realise that the coronavirus has, in fact, accelerated our manual systems, quickly making obsolete cumbersome processes in favor of more efficient solutions. Take, for example, online contracts.
Of errors can be reduced when you shift from manual to online signatures
The shift towards trustworthy e-signature providers
Thankfully, these days, digital solutions agencies allow for a more direct way of installing an e-signature on a document. In banking, for example, sending a photo of a signature is hardly a secure way of signing a contract. A jpeg snapshot could easily be cropped or copy-pasted onto other dubious documents.
It’s not difficult to see why many companies, especially those in finance, are shifting towards trustworthy e-signature providers. Let’s explore the benefits of online contracts and how they can streamline operational processes in the financial industry such as banks.
What are online contracts?
Traditionally, a contract is an agreement between two or more parties. Legally binding, it usually indicates an exchange or a promise of sorts. Contracts are part of daily life. A handshake could be considered a contract. The delivery of your shopping is a contract between you and the vendor. The terms of the agreement on Instagram are a contract as well. Depending on the country, some contracts must be written to be valid. It’s safer, too, to have that paper trail, in case of disputes.
Online contracts, simply put, are contracts that are made and signed electronically via the internet. An e-signature is a legal way to obtain consent or approval on electronic documents. In the early days of online contract signing, parties would copy-paste ‘photos’ of signatures on documents or, even more tediously, print out the contract to sign and scan, before emailing it back.
A study published in the Economic Times, which researched the effect of using digital signatures in India-based banks, showed savings of 1.3 hours from every transaction and $11 in costs involving office supplies (paper, ink) and shipping. This is on top of its many other advantages, such as streamlining regulations and bettering the end-to-end experience.
One hurdle that people might be struggling with before taking the leap online is the validity of online contracts. But digitisation is hardly an issue when it comes to such agreements. In Denmark, for example, a signature is not required to be on a physical paper for a contract to be legal. In Danish law, to prove a contract is valid, parties have to present evidence in court, such as electronic records that are admissible in evidence under sections 344 and 880 in the Danish Administration of Justice Act.
Moreover, Regulation No. 910/2014 in the EU stipulates that electronic signatures “shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form.”
In the U.S., the Electronic Signatures in Global and National Commerce Act (ESIGN) made e-contracts and e-signatures just as enforceable as traditional documents, as long as basic requirements are satisfied.
What are the benefits of using online contracts for your business?
There are multiple benefits associated with online contracts for your business, these are some of the biggest benefits:
1. Everything is expedited
Consider the old-fashioned way: You draft the contract, then send it over to your client via courier. If there are amendments, they send them back. Then you send it back. Then they send it back. It’s a constant back and forth. While you may encounter the same issue online, it won’t take as much time or manpower to do.
Say you have a chain of banks or insurance companies. You’re busy hiring, employing better vendors, looking for fresh locations, signing up new customers. Imagine how many contracts you have to draw up. How much space will that consume? How much back and forth? Now imagine being able to do all of that with just a laptop.
2. The margin for error is much narrower
Post-it notes were once handy, but they can fall off. Sure, you highlighted the important bits that require a signature, but those can easily be overlooked. In an e-contract, however, signatories will be prompted should they miss filling in any data.
What more, compared to emailed contracts, digital contracts are on the cloud and therefore always online. Both parties will only have access to one document. You can amend things in real-time and any changes will be tracked. It’s much less confusing.
3. Convenience enhances customer service
Many people are no longer comfortable going outside to do errands and wait in line. With digital contracts and signatures, people can sign up virtually anytime, anywhere, on any device. It’s convenient on their end; it can also boost your productivity. With the contract right in front of them, potential customers will have a harder time turning you away.
4. Processes are automatically automated
No more filing. No more bulky storage solutions. Do you want your archive of contracts alphabetised? Done. You want your files sorted by date? Done. You can cut your manpower assigned to handling contracts and redirect their contributions elsewhere. Everything is just so efficient.
5. Think about the savings
You don’t just save on cost on the courier and the storage and the paper and the ink. You can save time, energy, effort. You don’t have to stress about the contract getting lost in the post and falling into the wrong hands. You don’t have to worry about getting extra storage space for all the filing cabinets that are bursting at the seams with paper contracts. This might even push you to grow your business because you’re no longer limited by physical space. Even deadlines warrant less pressure because the process is just speedier.
And, as we all know, going digital is more environmentally responsible. You’re saving Earth, one digital signature at a time.
6. It’s very secure
We’ve seen it in films and television shows: people stealing contracts and ripping them up. Well, with digital contracts, you can be assured that all parties will be keeping their word. Trusted digital solutions providers, like us at e-Boks, are also equipped with top-notch secure platform systems that combat all sorts of malware and related theft.
What industries can benefit from online contracts?
As the world shifts to online communications, essentially every field can benefit from online contracts. However, here are just some examples on how digital signatures can help you in whatever business you have. Massive corporations as well as enterprises that handle clients, security, and finance will definitely be able to streamline their operations with the use of digital signatures.
1. IT and Security
This goes without saying. IT and security are normally online-based, so it makes perfect sense that their transactions are done digitally. Having sound digital contract systems is also something of a calling card for their safety measures.
2. Architecture and Engineering
Big building projects require a ton of people and processes. There are construction workers, safety guidelines, government red tape, engineers, architects, decorators, schedules, expenses, blueprints, deadlines.
Responsibilities and expectations should be written down and specified in a secure centralised system that can be accessed by all parties to ensure proper facilitation and implementation.
3. Legal Services
Lawyers are pretty much drowning in paperwork and signatures. It doesn’t take much imagination to see how consolidating all of these documents into a cloud system would be helpful.
4. Real estate
Yet another industry that demands several signatures from various other sectors of society, real estate would be revolutionised with the right digital solution. Realtors always need to work fast in order to make the sale and with the efficiency promised by digital contracts, they won’t need to drive back and forth just to secure those signatures.
It’s a universal fact that bureaucracy is slow. Digital transformation might just help move things along. By adopting and accepting digital contracts in a cloud-based space, government approvals and requests would be much, much faster. We all deserve better service, after all.
6. Finance and banking
When money is concerned, everyone just wants to have all their bases covered. Nearly every step in a banking or finance-related transaction constitutes a contract. That digital signatures will hasten banking procedures and improve its security is a given, but the fact that amendments, signatures, and other interactions are recorded and tracked will definitely contribute to client confidence and engagement.
Why does the banking industry prefer to use online contracts?
There are differnt reasons why online contracts are becoming the preferred usage, these are some of the reasons behind the shift in the banking industry:
1. Environmental ethics
One argument against digitisation is its so-called faux environmentalism. Though it saves on material resources, like paper and office space, it uses extreme amounts of energy and large infrastructure to power its data centers.
However, there are digital solutions providers that have committed themselves to use only green resources. Here at e-Boks, we are quickly shifting towards climate-neutral data and renewable energy. Our cloud is partnered by windmills and we are more than halfway in our mission to plant 120,000 trees by 2030.
Ever heard of the phrase ‘time is money? Well, this is especially apt in the banking sector. Bank Systems & Technology noted that “Manual and paper-based processes during a typical customer onboarding process can cost up to 20 times more than electronic document processing.” This includes the many errors banks encounter from typos to faulty signatures to revisions as a whole, the finance industry wastes hundreds of millions yearly just to accommodate corrections.
Not only does digitisation make such tweaks and amendments a less unwieldy issue (reports say that errors can be reduced up to 95%), one other study reveals that it can save at least $20 per document and cut turnaround times by 80%.
3. Enhanced security
Many assume that security is more compromised online, but this is an outdated concern. Online security software is improving all the time as it goes against the threat of malware. Digital solutions providers also offer increased security measures such as passwords, two-factor authentication, and more.
As mentioned earlier, every little change on the cloud-based contract can be tracked and verified, ensuring that there are no underhanded amendments. Everything becomes more transparent and everyone becomes more accountable.
4. Competitive edge
Too many times have people asked: Which bank is the easiest to deal with? As more and more financial institutions reorganise their structure to answer the call of clients for more streamlined solutions, there is a continued demand to evolve. Digital signatures will aid in this need for agility.
5. Applicable across various banking transactions
The applications of digital contracts and signatures in banking are pretty obvious, but there are so many other uses for this revolutionary technology:
Mortgage origination and closing
The possibilities even go beyond the customer experience. Digital signatures can be harnessed for employee verification and application as well as other internal documents. With better organisation, banks can save thousands of hours and dollars in administration. E-signatures can be accessed by any division or department in the bank, skipping over unnecessary steps, accelerating implementations and approvals, and creating a more positive customer experience.
One example is Danske Bank, one of the first banks ever to undergo digital transformation. The bank’s philosophy was to create a “digital customer journey,” and we at e-Boks were able to facilitate this shift, turning banking into a convenient experience and saving the company millions from paper-based processes.
6. More conversions
When PenSam Insurance decided to convert to digital signatures, they were able to gain between 1,000 and 1,500 signatures every month. In this case, e-signatures work by sending potential clients offers and policies. Accepting an offer is as easy as sending an e-signature.
When employees don’t have to focus on paper jams and missing contracts and waiting for one final signature, they’re able to allot their time to more productive things, like selling accounts, improving systems, and developing new products. Wouldn’t you want this kind of efficiency?
A company like us at e-Boks, with our catalog of fully integrated digital products, can help you effortlessly make the leap towards digital and reap all of its benefits.
How do you safely and securely send a contract for electronic signing?
These are some of the qualities to consider when looking for a digital contracts provider:
How secure is their system? What authentication requirements are needed to access a document?
· Paper trail
Can edits be tracked? Can anyone who accessed the document be verified? Is there a viewing history? Can you mark revisions?
Just how transparent is their process? Can users decline the service? Are users aware that they’re signing a contract?
Can the signature be separated from the file? What other documents are linked to the contract?
Are users aware that they’re signing a contract? Does the system allow the user to declare their intention to sign?
Can the document still be edited after signing? Is the document tamper-proof?
Tips when drafting and sending electronic contracts
We have made a list of tips that you should take into consideration before drafting and sending electronic contracts.
1. Use a well-established platform
A reputable platform like e-Boks answers all your questions about digital signatures. We already have an established system that can be fitted into your company. What’s more, we also have a safe and secure setup that will let you rest easy knowing that your documents are protected.
Studies have actually shown that hiring a third-party digital solutions provider is much more cost-effective to companies.
2. Avoid sharing sensitive documents to people who are not concerned
You wouldn’t let a stranger peek through confidential paperwork. The same principle applies to the digital world. Don’t share your password. Don’t leave your email open for anyone to view. Cybersecurity is as much up to the user as it is to the company.
3. Be mindful of the laws concerning digital contracts
Countries have valid regulations towards digital contracts. Make sure you’re aware of these to avoid needless difficulty. Reading the fine print can go a long way.
4. Update your cybersecurity system
Investing in digitisation means investing in security software. It’s the same way you would put a lock on your archives storage room or hire a security officer to guard your office.
Forget about sending contracts through email — which is essentially just a faster version of sending in via post. With e-Boks, it’s not a matter of upgrading old processes. It’s about transforming the way you work and think.
- For more than 20 years, we have helped public authorities and businesses securely digitise their communication flows.
- We proudly provide the governments of Denmark, Greenland, Norway, Sweden and Ireland with national digital post solutions.
- Well-renowned international banks, insurance companies and energy service providers have chosen to use the e-Boks platform instead of pursuing their own solutions.