Service is often cited as a leading reason to bank with a creditunion. But in the same breath, some also find fault with reducedhours and the lack of widely located branches. The same people whoare shopping on their computers, smartphones and tablets are alsolooking to conduct business with their credit unionselectronically. Whether opening an account, signing a loan orcompleting a credit card application, members want the convenienceto bank anywhere, at any time, on any device. As a result, thetraditional way of signing forms and documents is changing – frompaper to paperless.

With an e-signature solution, credit unions can render thesecomplaints obsolete by delivering the experience members aredemanding. “Providing the ability for our members, who aredisbursed across a wide geographic area, to sign documents fromanywhere creates an edge that allows us to compete with largerfinancial institutions,” explains Kathy Clark, vice president ofsales, service and operations with Teachers Credit Union inHamilton, Ont., in regards to the credit union's adoption ofe-signatures. “We are offering a higher level of service, whichtoday is important to retaining existing and attracting newmembers.”

E-signature adoption among credit unions is catching on quicklybut there are a handful of foundational questions that recur duringthe exploration process. The first is usually about the legality ofe-signatures. Recent legal disputes indicate that e-signatures canactually provide a stronger legal defense than is possible withpaper. However, the e-signature requires a proper framework tostand up in court. This leads to the second question often asked:What does an e-signature solution need to include?

An e-signature is first and foremost a legal concept. It isabout having a lasting record of someone's intent. The U.S. federalESIGN law defines an electronic signature as “an electronic sound,symbol, or process attached to, or associated with, a contract orother record and adopted by a person with the intent to sign arecord.”

The term “e-signature” is often confused with “digitalsignature.” Digital signature refers to the encryption technologyused in a number of security, e-business and e-commerceapplications, including e-signatures.

To ensure a secure solution, a credit union needs to implementan electronic signature application that is built on digitalsignature technology. This combination makes the e-signature legaland compliant by delivering unprecedented visibility intotransactions executed across multiple branches and controllingcompliance requirements via automated workflow rules.

The digital signature technology also makes the signaturesecure, another top question asked when a credit union is in theonline signing solution buying phase. To make this iron-clad, thereneed to be three levels of security included in the solution:

• User authentication to reduce fraud and IDtheft. Verification can be made through traditional log-inor password, secret question and answer, SMS code or a third-partyauthentication service.
• Document authentication to provide irrefutabledocuments that meet regulations. Documents must include away to digitally sign and encrypt the e-signed document to producea tamper-evident seal. Any attempt to make an unauthorized changeafter the fact marks the document as invalid.
• Process evidence to provide peace of mind for membersand reduce odds of litigation and fraud. The goal ofprocess evidence is to prove what took place throughout theprogression of the workflow. This is accomplished by gatheringelectronic evidence such as Web pages, documents, disclosures orpop-up windows that were displayed; emails or SMS messages sent;any voice or image capture; IP addresses and the time and date ofeach event.

Finally, it all comes back to the member experience. To ensure aseamless online e-signature experience, it is important tointegrate the solution with the credit union's business apps,customer portals and websites, and user interface. Best practicesfor online transactions show that customizing the member'sexperience builds trust. If the member doesn't recognize theinterface they are dealing with, they may lose trust and abandonthe process in favor of paper, especially if it involves enteringpersonal information into a Web form.

According to Mitchel Chilcott, North Peace Savings and CreditUnion CEO in British Columbia, “By taking our business digital weare not only reducing paper, we're also uniting our widespreadmembership by making it easy to access our services. Theconvenience and speed for members together with the elimination ofinefficiencies like printing, tagging, scanning and shredding,makes this a win-win for everyone.”

For credit unions that are not ready to flip the switchcompletely on e-signing, proof of concept and pilot implementationsare common. The first phase of a rollout works out any bugsattached to the larger IT infrastructure and assists in providinguniform attention and service for users. A license plan allows forcost-effectively expansion across branches and call centers.

Whether opting for an on-premise, cloud or a SaaS e-signaturesolution, the result eliminates manual, paper-based processing andenables banking transactions to be electronically executed fromstart to finish.

Michael Laurie isvice president of product strategy and a co-founder at Silanis Technology in Montreal,Quebec.