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E-Signatures Are Coming

Those of us who have been in the business technology world for a long time can remember the early 2000s, when a bunch of electronic signature and electronic form products came out that were going to revolutionize work. No more paper forms! All forms were going to be electronic documents, signed digitally. You would verify your identity, read the document, type in any information that hadn't been prepopulated for you, and hit the submit button. If need be, you could sign your name on an electronic keypad or tablet with a stylus. There would be little need for printing, faxing or filing.

But the world was not quite ready for this. Legal departments and the IRS balked at accepting electronic signatures on important documents like mortgage applications. Banks were wary of trying the technology until it was proven in court and by regulators. And business processes that relied on older software programs were too hard to change. Companies that provided this technology found narrow windows of opportunity and waited patiently for the broader market to be ready.

Then a few things happened. The Uniform Electronic Transactions Act was passed, which pushed most states into accepting electronic documents and signatures as official records. The IRS began accepting digitally signed tax forms. Stores began using signature pads at the point of sale. People began carrying tablets and smartphone around and clicking "I agree" on electronic disclosures.

Electronic signatures can help accommodate two competing forces in retail banking: consumers' and banks' ongoing evolution toward self-service and both parties' interest in a friendly human interaction when customers do visit a branch. "Branches are still the cornerstone of the retail relationship," says Craig Le Clair, vice president and principal analyst at Forrester.

But the human element is often vacant. "When I call the pizza place, they know who I am," Le Clair says. "When I call my bank, they have no idea who I am."

Electronic records electronically signed, stored and linked by individual and household relationships can help customer-facing employees regain that understanding of the people they serve.

At a conference last week sponsored by Silanis and IBM, bankers and lawyers testified to an emerging legitimacy of e-signatures in the world of banking. Royal Bank of Canada is already making extensive use of the technology throughout its business, starting with wealth management. Chase and U.S. Bank are testing it in pilots. Federal and state courts have for the most part supported e-signatures in civil lawsuits, with a few hiccups around methods of authentication and delivery of disclosures.



JPMorgan Chase recently hired Alan Varrasso away from Verizon Wireless to be its senior vice president of consumer banking IT, sales and services. He is responsible for the digital sales and service experience of Chase's retail branches and call centers. He is overseeing customer-facing digital initiatives such as new processes using electronic signatures.

The bank is implementing e-signatures in branches to facilitate conversations between branch staff and customers. "We're moving away from the banker sitting across the desk from the customer, we're making it a more interactive experience, Varrasso said in an interview at the conference last week. The technology is helping with account origination and other basic banking tasks, with the banker and customer passing a tablet back and forth as needed to complete the necessary paperwork.

The bank's technology roadmap has it using e-signatures for credit card opening, mortgage originations, CDs, and most other transactions that require signatures by the end of 2014. The technology will be introduced not only in consumer banking, but treasury, mortgage lending and private banking as well.

As to what devices to support, Varrasso is a firm believer in device agnostic solutions. "We didn't want the tablet decision to hold up the progress of e-signatures," he says. "We're almost treating end devices like TV screens."

This calls for a change in the way developers write applications. Rather than creating for a website or a native app, Chase's developers are creating "native hybrid" programs that wrap a browser page written in HTML5 with the look and feel of an app. This gives the bank more control over what's being rendered, and the program can run on any operating system or browser. "You lose some things and it will require to you to implement other software tools to take advantage of the GPS or camera resident in a smartphone or tablet," Varrasso said. But the advantages far outweigh such shortcomings, in his view.

The physical manifestation of the signature will vary. In some places, electronic keypads will be offered to let people sign their name with a stylus. In other cases, it will be a click. "Verification happens whether you use a tablet or keypad or not," Varrasso says. "Our legal teams have talked through the quality of the signature."

Chase's wealth management division is already using the electronic signature technology, and its private bank is starting to look at it. It's running in a couple of branches as a proof of concept and more will be added in 2013. "We'll get really aggressive in 2014," Varrasso says.




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