U.S. Bank is the midst of a company-wide rollout of electronic signature technology that's already affected branches and will soon reach treasury management clients.
The project is notable for its size and degree of difficulty. While a few banks have begun using e-signature technology to automate paper processes — Royal Bank of Canada uses it in wealth management, JPMorgan Chase has been piloting the technology in its branches — digitally signed loans are still a rarity, partly due to legal and compliance concerns.
Minneapolis-based U.S. Bank began offering e-signature-assisted paperless consumer loans in all 3,000 of its branches in September 2011. In the bank's e-signature process, the customer is authenticated by standard means, then signs his name using an electronic signature pad. The software is from Silanis, the signature pad from Topaz.
This February, the bank extended electronic signing to deposit account openings across all branches and is now processing 460,000 e-signed documents per week.
The bank's goals for this project included a better experience for the customer, a more efficient process, and money and time savings.
"For home equity loans, all the documents the customer has to sign and initial multiple times are very time consuming," says David Miller, senior vice president, consumer loan and lease operations. "To make it easier on the customer coming into the branch, we thought there was a lot of value in being able to simplify that transaction."
One use case where this technology has been especially helpful is when a couple refinances or takes out a second mortgage, they can now close the loan without having to be in the same branch at same time. "If one spouse works in downtown Minneapolis and the other works in the suburbs, they can each go to the branch that's convenient for them, sign that document electronically, and because it's electronic they don't have to worry about the paper, we can affix both signatures to the same transaction," says Rod Olson, senior vice president of technology and operations services. "You don't have to coordinate everybody's schedule so they get to the same place at the same time. I think that's a nice side benefit, although it was not necessarily a primary driving force in doing this."
Compliance was a big consideration in the planning for e-signatures. "We spent a lot of time up front on that issue with our legal department, understanding exactly how this signing ceremony needed to be conducted to make sure the customer knew exactly what it was they were signing up for," says Olson. "We didn't want any issue or somebody saying they didn't know what they were buying." The technology captures every screen a customer sees throughout that process. In a dispute, the bank could call up what that customer looked at and signed, with a time stamp.
One thing the bank was careful to do was make sure the electronic signature pad wasn't going to be the clumsy version found in some retail stores, "where it feels like you're signing with a crayon and there's no way that signature is going to look the way it looks on paper," Olson says. "We went through an extensive process to find a pad that would look the way a signature would look on paper."
The work the bank's technology team put into creating electronic forms to replace paper ones, and building workflows around those, is being repurposed for other product offerings and other business lines.
"We were intentional about that," Olson says. "Our investment committee wanted to ensure that whatever was being built was reusable by other business lines in the bank."
In the first instance of this repurposing, a technology team led by John Fraser, vice president, technology and operations, took the consumer loan system and reworked it to handle account openings. "A real pain point in the branches was signature cards," Olson relates. "In the original demos of the new e-signature process, the number one comment was, this is great for loans, but we've got to take care of the signature card process first."
The paper signature card was considered obsolete by many branch employees. "It was fine if you cash your check in branch A [where the signature card is kept], but if you cash your check in branch B, then they would have to call branch A, have them find it in the file drawer, fax it, and make sure the banker got it," Olson says. "It was not very pleasant for customers. It didn't show our best side."
Two upcoming projects planned this year will deploy e-signatures in new ways to business customers. One is treasury management. Business customers will be able to offer their customers e-signatures to automate their ACH forms. "A scenario is a fitness center customer of ours that wants to have an ACH withdrawal out of customers' accounts," Fraser says. "The traditional process would have been to have a paper form validated on site and eventually sent back to the bank. In the new e-signature process, the fitness center customer will type in the necessary fields to send their customers an electronic version of the form to fill out online with a mobile device. The form is sent immediately to the fitness center and U.S. Bank for processing. It's less error prone and has a faster turnaround."
In the second upcoming e-signature process, the bank will give its business customers electronic signature cards to use to access their accounts. All users on an account will get a notification that someone is being added or removed, and they'll be able to accept or reject that action from their mobile device.