In an age when electronic signatures are gaining steam in the credit union industry, it’s easy to get swept away by the desire to get documents signed online in minutes.
There’s good reason to get excited about this technology, but it’s important to understand the pros and cons of electronic signatures before deciding if it’s right for your credit union.
The Pros of Electronic Signatures
Get documents signed immediately. Instead of waiting for documents to be sent by courier around the globe, your contracts can be signed and delivered with electronic signatures in a matter of seconds.
Expand member base. With electronic signatures, you’re not limited to only having members near your branches. You can use electronic signatures for everything from account openings to loan applications. That means you can attract members from across the country, and you’re more likely to retain your members if they move.
Improve document accuracy. Unlike using paper processes, electronic signature software can support mandatory fields, so you can be sure your documents are 100% complete every time. That means you never have to track down members to re-send or re-sign incomplete documents.
Save time and money. Electronic signatures save credit unions time because documents can be sent out for signature right away. This gives you more time to spend on building relationships with your members instead of shuffling paperwork. Not to mention the cost reduction for printing, faxing and mailing documents.
Boost member satisfaction. With electronic signatures, your members can sign documents anytime, anywhere on any device. This technology makes it faster and easier to interact with your credit union, which is especially important for younger members.
The Cons of Electronic Signatures
Some have limited storage options. Some electronic signature vendors require that you store your documents on their servers forever. This is a concern for many credit unions that want to control where their members’ personal information is stored. Credit unions should make sure their electronic signature vendor is able to hand over control of the documents and digitally shred copies from the vendor’s servers according to Department of Defense standards.
Security varies depending on vendor. Not all electronic signature vendors offer enough security for credit unions. The most basic type of electronic signature offers no security at all against tampering, while others offer some basic tamper protection. But only one signature technology offers the high level of security—a specialized type of electronic signature called a digital signature. Learn more about the types of electronic signatures in this blog post. Credit unions should be wary of low-security electronic signature products.
Some use proprietary software. Many electronic signature services rely on proprietary software. This can pose a problem for credit unions that don’t want to be locked in to one vendor for electronic signatures. To avoid this problem, credit unions should pick a vendor that complies with the Digital Signature Standards set by the National Institute of Standards and Technology. These signatures are embedded into the documents, which means you have the freedom to switch vendors down the road if you want to.