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E-signed, sealed and delivered: How e-signatures help financial institutions with regulatory compliance

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by Viktor Wrede, CEO at Scrive

Representative from Scrive discusses the impact and opportunities of electronic signature in the BFSI industry

Digital acceleration is often high up on the agenda in the banking, financial services, and insurance (BFSI) industries. The need for speed was no more apparent in the wake of the pandemic when in-person contact was prohibited, and it continues to have a lasting effect on the financial sector. There has been a significant reduction in high-street branches, with a Which? report revealing that over half of UK bank branches have closed since 2015.

Catering for this new wave of ‘convenience banking’ is very different from the traditional high street approach. Tellers and bank managers have transitioned from being behind a desk to the computer screen in remote locations. People no longer withdraw weekly spends, rather they use plastic bank cards for contactless payments.

With this move to digital now firmly cemented, how can BFSI businesses maintain their regulatory and contractual obligations?

 

Customer Onboarding and Efficiency

Viktor Wrede

Customer onboarding in banking, financial services, and insurance typically requires lengthy and highly regulated legally binding agreements between businesses and their customers to stop financial crimes such as fraud or money laundering. However, this approach can often create a conflict between the customer and the teller.

From a prospective bank customer’s point of view, the question is: “How easy is it to open an account with this bank?” For the bank, the questions are: “How can I prove this person is who they say they are? What sort of funds will be deposited and withdrawn? Are they a reliable customer?”

That is why the demand for digital onboarding workflows that enable customers to sign documents and prove their identity online is increasing. Long waits, lost paperwork and ill-informed advisors leave a bad taste in a customer’s mouth. Replacing physical signatures with compliant electronic versions allows businesses to process more paperwork in less time, increasing efficiency overall. E-signatures are helping businesses to cut down document handling costs by at least 80%. This leads to faster, safer and more transparent transactions, helping to provide customers with a seamless online experience.

 

The John Hancock has gone digital

The global e-signature market has seen a boom over the last few years, driven in part by the expanding online documentation processes, supportive laws for the e-signature market, workflow efficiency, supply chain improvements, and the growing demand for compliant online security. The result of its popularity is accelerated growth, with the market projected to reach $35.03 Billion in 2029.

 

User Experience

One of the key drivers for digital transformation in BFSI is competition. Customer demand for digital services is rising continuously and there are expectations that they should be able to open a new bank account in the same amount of time it takes them to do their online grocery shop.

Challenger banks and digital-first FinTech and InsurTech companies are increasingly able to answer this demand by working with a partner who can meet the technical and regulatory requirements, with a fast time to market.

Traditional banks and insurance companies, who are often wedded to manual paper-based processes, need to catch up by providing a more dynamic, digital-first customer experience. Although online services have long been available to customers, it can still be necessary to download and print out paper forms, fill them out by hand and return them by post, or at best by scanning and emailing them. And verifying the customer’s identity can often mean an in-person visit.

Back-office operations are just as important. Manual, paper processes translate into substantial administrative burdens in terms of cost and efficiency, enabling the digital-first players to offer more convenience and lower fees. The quicker processing and completion of transactions using e-signatures within the financial sector helps customers gain access to services more quickly.

In addition to the speed and flexibility benefits, e-signatures also permit businesses to provide services to their international customers. According to a report by Forrester, the service has helped 47% of organisations gain new customers during the pandemic.

Businesses can now perform overseas trade without having to leave the country, and contracts can be shared with concerned parties through email.

 

Security, Risk and Compliance

In highly regulated industries like BFSI, one of the main challenges to implementing digital services, for traditional branches as well as challenger banks, FinTechs and insuretechs, is meeting regulatory compliance.

Laws around personal data protection (GDPR) and money-laundering (AML Directive) have gotten stricter and the fines higher. Non-compliance is not an option. Other challenges include security, managing business risk and the disruption of implementing new services into existing IT systems and business processes.

However, paper documents can be easily modified, and signatures can be forged. Even if documents are stored inside filing cabinets, there’s a chance of documents being lost or stolen. With the right service, signing electronically is more secure and makes compliance easier to manage in terms of storage, ID proofing of signing parties and demonstrating that the document has not been altered in any way after it was signed. E-signing software that offers signing party authentication ensures that agreements can only be accessed and signed by the intended parties. And when these digital identity checks are integrated into the e-signing service, it greatly improves the customer experience, enabling the signing party to authenticate their identity and sign the document within the same digital workflow.

 

Implementation

Adopting e-signature software can often be viewed as a complex technological integration process, leading to concerns about the impact on your business efficiency during the implementation phase. The right provider, however, knows how to minimise business disruption and costs, both now and down the road, by working together with the customer to plan integration projects according to the customer’s existing product roadmaps and IT development plans.

Businesses don’t always have to fully integrate e-signature software. For example, Scrive’s eSign GO is a plug-and-play solution that sits on top of existing systems, achieving digitalisation without integration. This is particularly well-suited for businesses with legacy IT systems that would otherwise be unable to communicate with modern digital tools.

When it comes to business processes, the right e-sign provider will also be able to offer change management guidance, challenging the customer’s existing processes and proposing smarter ways of working.

 

Eliminating paperwork bottlenecks

E-signature software offers a wide array of benefits, more than just the convenience of electronic signing itself. Along with document management software solutions, e-signature software can enable end-to-end digitalisation of agreement processes, which is far more efficient compared to the conventional pen-and-paper method.

Banking

The importance of Customer Experience (CX) for retail banks today

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By James Isaacs, President, Cyara

 

Today’s retail banks face considerable challenges. Open banking initiatives –  that make it easier for customers to switch accounts – and increased competition from emerging fintech brands, are making it harder for them to attract and retain customers. This challenge is particularly acute for traditional banks which are seeking to attract younger people, who are drawn to the range of innovative services offered by digital-first emerging ‘neo’-banks.

To stay competitive, traditional banks must improve the customer experience  they offer account holders. They also must look for more efficient ways of working, so they can service all customers in a consistent way, regardless of which banking channel they use – whether it’s banking online, at a physical bank branch, through a contact centre, using a mobile app, or (most often) using a combination of all these channels.

The challenge of consistency

The argument for an omnichannel strategy is compelling. Fuelled by the pandemic, demand for digital banking services has grown. McKinsey suggests that 71% of European banking clients prefer multi-channel interactions, whilst 25% express a desire for a fully digitally-enabled private banking journey with remote human assistance when needed.

The delivery of such systems, however, is not without its challenges. Embracing omnichannel often means transitioning to a cloud-based infrastructure – away from the legacy on-premise systems prevalent in banks. Even when this hurdle is overcome, delivering banking services through multiple channels requires a significant investment of time and resources. Due to these common barriers, many banking CX projects fail to get off the ground.

James Isaacs

At the other end of the scale, there are the banks who have sought to implement numerous channels to cater for every possible customer demand, with varying degrees of success. The key to the delivery of a stellar CX is consistency – ensuring that every stride a customer takes in their journey is seamless, irrespective of the path or the channel they choose to take. The chance of ensuring a consistent service across all these channels is negatively impacted if organisations attempt to simultaneously deploy services to mobiles, website, in-person channels, messenger, chatbots, contact centres, alongside the adoption of newer open banking services.

Selectiveness is key

Organisations looking to optimise CX through the adoption of an omnichannel strategy are therefore advised to be more selective in their approach – adopting one or two new channels or approaches before expanding their omnichannel offering further.

An ideal starting point for retail banks is to look at automation within the customer journey. When applied correctly, automation can be used to help improve customer service in a way that also delivers efficiency gains.

The power of automation

Automation can have a significant impact on the CX delivered within retail banking, which saves valuable time for the customer and enhances the customer journey. Most customers getting in touch with their banks have fairly routine queries, such as a change of address, so the need to speak to an advisor is often unnecessary.

Automated customer-facing support solutions, such as chatbots, offer a faster way for customers to self-serve and secure the answers that they need to certain problems without having to phone an agent. Chatbots are programmed through a knowledge bank that can easily be updated with new information, enabling customers to source the information they need quickly and easily. Chatbots can also be used to direct customers to an agent if they are unable to resolve the issue.

For those customers who do still need to speak to an agent, there are Interactive Voice Response (IVR) systems, which capture information from a customer when they call into the contact centre. IVRs help customers complete simple tasks themselves and route them automatically to the right department. This directly reduces average call handling time (AHT) for agents and the length of time that a customer is on the phone.

The importance of automated CX testing

Yet, offering omnichannel and automated journeys is not enough to satisfy customers. These journeys must be flawless if they are to deliver a seamless customer experience. Forward-thinking organisations understand that the only way to assure perfect execution is through adopting automated testing that places a spotlight on the omnichannel customer journey from the customer’s perspective.

Automated testing can be enabled by leveraging an intuitive testing solution that develops test cases based on existing customer journeys. Retail banks can use automated testing to track various paths through IVRs, chatbots and then base test scripts on those journeys to ensure their flow or functionality is as it should be. Using this strategy, financial organisations can create thousands of automated test cases that cover the full swathe of customer journeys, shortening testing operations to a fraction of the time of equivalent manual tests.

While automated testing provides easily measurable benefits, certain alerts flagged by automated testing are more critical than others. Distinguishing a true failure that requires immediate action as opposed to failures that can be addressed in time is essential to achieving the true return on investment (ROI) of test automation. In doing so, banks can ensure that the customer journey remains smooth, and the CX delivered remains outstanding.

The path to good CX is paved with automated testing

Delivering omnichannel services for banking is key to satisfying customer demand. However, whether it is the delivery of a chatbot, IVR or an open banking model, retail banks are well advised to stagger the roll-out to ensure the delivery of a consistent service to customers. Automation plays a critical role here – both in the delivery of omnichannel services to customers, but also ensuring its ongoing success through rigorous, frequent and automated testing.

Financial organisations that want to remain frontrunners in the market will stand out against the competition by delivering stellar digital and in-person experiences for customers. To assure high-quality CX, walk in the shoes of your customers, testing their customer journey in each and every scenario to confirm there are no cracks in the road. Of course, there may be bumps along the way, but when those are addressed in a timely manner, retail banks will continue to attract and retain customers for the long haul.

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Business

Why do Traders Need a Managed Service Partner?

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Jeff Mezger, Vice President of Product Management, Financial Markets, TNS

 

Does your financial institution have the understanding, resources, talent and bandwidth to execute an effective data center strategy in-house? If not, it needs to, as behind every transaction is a labyrinth of algorithms and networking infrastructure technology that converge in one location: the data center.

For most, the answer will be ‘no’. There will not be the resource or skill in-house to keep ahead of the maze of technical and logistical options to execute the fastest and most profitable trades. Trading success requires accessing extremely powerful servers, with the best data lines and connections close to where the trade is physically taking place. Processing close to the source of the input data provides the lowest possible latency between input and response – and speed matters. Milliseconds can mean the loss or gain of millions of dollars.

 

Latency Matters

Low latency is vital for algorithmic trading. Many factors affect latency, especially hardware location and network connections. Trade execution speed is critical in maximizing profit and loss, and a competitive advantage comes from having the best communication links to hardware in the best location.

TNS’ ultra-low latency Layer 1 technology for exchange direct access inside the data center was the first architecture of its kind to be offered and deployed globally and remains the most advanced solution in the market. It eradicates the need for multiple switches by using a simple, single-hop architecture to deliver direct exchange connectivity in as little as 5 to 85 nanoseconds – impressive when you consider that the human eye takes 400 nanoseconds to blink!

So, acknowledging that speed and colocation are vital for executing a trading strategy, what can firms do to underpin trading success? Many will outsource operations to a specialist managed hosting, colocation and connectivity service provider.

 

In-house vs. DIY

A recent independent report Colocation of Financial Markets Trading Infrastructure’, identifies the pros and cons of in-house management (a “DIY” approach) versus a managed service model. The report found that managed service providers offer beneficial value-added services for capital markets clients. Advantages include cost savings, trade efficiency, and simplified access to data and network infrastructure support, enabling trading firms to focus on their core business competencies. Industry analyst firm, Celent, which authored the report, interviewed trading firms and data and trading technology providers and found that the key decision criteria when deciding to engage a managed service provider included:

  • Consultation and expert advice on the ideal configuration of hardware, network connectivity, location, data feeds and network bandwidth.
  • Agility and flexibility to take advantage of ever-changing investment opportunities by rapidly and easily deploying trading strategies in new markets.
  • Access to high-end network services, leveraging high-speed solutions, including ultra-low latency, in-data center Layer 1 connectivity to link to trading venues, new customers and other service providers.
  • Operational efficiency and future proofing, with access to the latest technology, and highly experienced staff in all global jurisdictions who help to navigate cultural, linguistic, and regulatory obstacles.

 

Challenges

Managed Service Providers offering remote data center space and connectivity are on a quest to deliver a uniform global experience to ensure trading in, for example, Singapore or Tokyo is the same as trading in London or New York. They are also constantly investing in technology and new locations. For TNS, this means responding to customer requests to deliver a service in any location, most recently announcing a managed hosting and colocation offering in Madrid.

On rare occasions, perhaps instigated by political or economic events, firms may need to move from their existing data center location, as seen recently when key exchange, Euronext, relocated its primary data center and related colocation services from Basildon in the UK to the Aruba Global data center IT3 in Bergamo Italy. Such a physical move is a big undertaking and firms need differentiated support and solutions to ensure that they can seamlessly move and trade continuously, regardless of their size, requirements and the exchange location.

So far, TNS has moved nearly 20 existing and new customers to Bergamo, providing traders with uninterrupted, seamless trading. Our customers have been able to focus on their core business while we have managed the global supply chain issues to ensure a smooth migration. With suppliers quoting lead times of a year for some equipment, our buying power compared to smaller firms or those attempting to DIY a move, has proved invaluable in ensuring a smooth transition.

 

Future-Proof

Firms need to future-proof their trading infrastructure by working with a provider that has experience in managing access to vast amounts of raw market data, can support multicast requirements and is able to offer scalable solutions to accommodate the demands of ever-expanding bandwidth. As traders diversify their portfolios, their market data needs can place excessive network capacity pressures on their infrastructure, sometimes running into tens of gigabits. Seek a provider that can easily accommodate these requirements and handle data bursts during high activity periods, such as those seen on many recent occasions due to market volatility caused by political and economic events.

 

 

 

 

 

 

 

 

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