Why Industry-Leading Financial Firms Rely on True Digital Signatures

Posted by Pem Guerry

Financial services firms handle a high volume of high-value transactions, many of which contain sensitive information, including social security numbers, account numbers, personal information and more. That’s why it’s distressing that, despite its myriad regulations, the banking and financial services industry falls victim to more fraud cases each year than any other industry, according to the Association of Certified Fraud Examiners. Firms and chief security officers must look for surer methods to safeguard their data and the clients they serve.

As a result, many industry-leading firms have turned to cloud-based digital signatures. This technology can offer the same features as an installed, on-premise e-signature solution but with greater flexibility and enhanced security to guard sensitive data. 

So what enables a digital signature to protect against fraud?

 

1. Tamper Evidence and Tamper-Proofing 

Tamper evidence detects any unauthorized change to any part of the document and gives proof that tampering has occurred. Some e-signature technologies provide this once the document is final, but a true digital signature solution applies a tamper-evident seal with each and every signature.

Additionally, select digital signature technologies can apply a tamper-proof seal, which turns off all future editing capabilities within the document. This gives you peace of mind that the final document cannot be altered in any way after execution.

 

 2. Legal Evidence

If your firm’s e-signatures are ever challenged in court, you want to have evidence to support your claim that they are valid and legally binding. With digital signatures, also referred to as Independent E-SignaturesTM, the evidence of the signature is permanently embedded into the signed document—meaning you own the evidence and are not dependent on your relationship with the vendor to prove the validity of a document, even years after the transaction has taken place. 

The most secure e-signatures come with a comprehensive audit trail that captures information from the entire signing process, including the date and time a document was created, the signer’s consent, the IP address of the signer and each step of the entire signing process.

 

3. Identity Authentication

To protect the integrity of a sensitive document, you must be able to verify the identity of the signer. Different identity authentication methods are available, and many firms require signers to utilize two or more authentication methods before accessing private documents—a process known as multi-factor authentication. Some of the most common identity authentication methods include:

  • Email Authentication: The signer receives an email with a link to access the document, proving his identity by having access to the email account.
  • Knowledge-Based Authentication (KBA): Before accessing the document, the signer is given multiple questions about information found in 30 years of public records, including credit reports, town hall records, and more. The signer must correctly answer a certain number of questions within a designated time frame in order to gain access to the document. 
  • Short Message Service (SMS) Authentication: SMS authentication requires the signer to supply a one-time passcode sent to his mobile phone before he can open the document.

 

With a versatile and secure digital signature solution, financial firms can strengthen their fraud mitigation efforts and take advantage of the technology in ways that best suit their needs. A standalone, cloud-based digital signature platform can be activated and used immediately. Or for a more automated process, a digital signature solution can be integrated into existing platforms to create ready-to-sign documents, allowing you to limit manual preparation, incorporate your own branding, take advantage of document workflow features and more.

If you’d like to learn more about e-signature in the securities industry, download this free fact sheet.

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