You probably already know the benefits of digital signatures for credit unions—you can save time and money. Many credit union members are tired of paper-based processes and expect to be able to access your credit union's services anytime online.
But just because your members are eager for convenience doesn’t mean they will automatically be comfortable with using digital signatures. This is especially true because of the sensitive information found in many financial documents.
Most of your members have probably signed some sort of basic agreement online. They might have clicked “I agree” on a term sheet, or maybe they’ve signed agreeing to pay a credit card bill. But that’s not necessarily the same thing as securely signing with a digital signature service.
Education is the most important aspect of getting your members excited about using digital signatures. It’s important to answer their questions clearly and confidently to help them become comfortable with this technology.
Are Digital Signatures Even Legal?
When credit union members first hear about digital signatures, their first question is usually, “Are digital signatures legal?” The answer is yes! Digital signatures are legal under the ESIGN Act and UETA. In fact, some digital signature services offer more legal evidence than you’d get with a handwritten signature on a piece of paper.
However, it’s important to understand that not all services can give you the same amount of legal evidence. The American Bar Association (ABA) has created guidelines to help you know what to look for in a digital signature vendor. These guidelines say you should look for five features in your digital signature service:
- Signer’s identities must be proven
- There must be disclosure and consent to use digital signatures
- The document must be secure against tampering
- All signers should have access to the document
- All actions taken should be documented in an audit trail
If your digital signature service meets all of these criteria, you can reassure your members that your digital signature service is legal and compliant.
Is My Personal Information Protected?
These days, it seems like we’re always hearing about another big data breach. From big retail companies like Home Depot to financial services companies like Fidelity, no one is safe. Because of this growing threat, it’s more important than ever to protect your members’ personal information.
While no software or service is 100% hack-proof, there are safeguards you can put into place to protect your members’ information from hackers. With digital signature services, your members can be protected against fraud through a process called identity authentication.
With this service, your members must prove their identities before they’re able to access any documents you send to be signed. Members can do this in by entering:
- Their social security number and date of birth
- A secret code sent to their cell phone via text message
- Answers to secret questions you share directly with your member
- Answers to questions based on 30 years of public databases
Your digital signature service should also encrypt documents both at rest and in transit for added protection.
How Am I Protected Against Tampering?
The methods we mentioned above tell you how to limit access to documents on the front-end, but your documents should also be protected from tampering after they’ve been signed. That’s why you should look for a digital signature vendor that offers tamper protection.
This feature makes it easy for you to know if a document has been tampered with. All you have to do is open the finished document in a PDF reader. If the document is tamper-free, you’ll see a green checkmark above your document.
But if you see a yellow exclamation point or a red x, beware! There’s a chance someone has tampered with your document. To find out what was changed, you can click on the alert for more information. The change could be something as insignificant as capitalizing a word, or it could be something as important as changing the terms of an agreement.
Why Should I Care?
If you’re adopting digital signatures, you already know the benefits for your credit union. But your members need to know what’s in it for them. It’s important to clearly communicate why your members should be excited about this technology. Here are some of the top member benefits:
- Members can sign documents anywhere—not just when they’re in the office or at home
- On-demand access to services on your website
- Faster document turnaround means faster access to services
While some members will probably cling to the paper processes they’ve been using for years, our research show that many credit union members are eager to use digital signature technology. With these considerations in mind, your credit union can craft a rollout plan for your digital signature project to get your members on board.