Imagine this scenario: A bank’s contact center representative is talking on the phone to a prospective customer who is considering taking out a rather large loan. Within seconds, the customer has the necessary paperwork in front of him and needs only to sign on the dotted line to officially close the deal.
The customer electronically adds his signature to the documents, and both the customer and the rep are pleased with the speed in which the transaction is finalized.
In the not-so-recent past, such a business process would have taken days—with the outcome uncertain until the customer received the paperwork via traditional mail, signed it, and sent it back. With the technology that powers e-signatures, that time lag is becoming a thing of the past.
It’s been 8 years since the Electronic Signature Act—legislation that makes electronic signatures as legally binding as paper-based signatures—was signed by President Clinton. Although it’s been nearly a decade, the use of e-signature technology is now steadily gaining more widespread prominence and acceptance.
Technology providers attribute this, in part, to the evolution of the technology into easy-to-use solutions that can seamlessly integrate into their customers’ current processes. "If it’s not 10 times easier, no one’s going to use it," says Jason Lemkin, CEO and co-founder of EchoSign. "It’s got be easy and two clicks away. You need state-of-the-art technology to make this 10 times easier." Using web-based platforms, e-signature technology providers have created a solution that doesn’t require customers to download software or enlist the help of their IT departments. They can facilitate the movement of electronic documents themselves.
The technology is currently most prevalent in industries that require contracts to close business. Significantly, these are traditionally conservative industries, such as financial services and insurance, which are known for cautious acceptance of new solutions. "We’re seeing a growing interest in finance and insurance. It’s growing slowly because you’re dealing with conservative areas, but they’re definitely seeing the need," says Kristen Noakes-Fry, a research director for the research firm Gartner.
Also leading the charge, says Noakes-Fry, is the interest in automating processes that were once completely reliant on paper– or partially reliant on paper. Think about the documents you can fill out online but need to print out, sign, and then mail back to the service provider. "Where that can be speeded up, it reduces a lot of friction and effort. If you’re in a business or contract situation, it makes it more likely to happen," adds Noakes-Fry.
The most obvious benefits of streamlining the processes are the cost savings surrounding a diminished reliance on paper and postage. In addition, fewer people have to be involved in the process, and those involved are more efficient. "If the rep can close you while you’re still on the phone, you’re not going to go to my competitor and I’m going to make more money," says Lemkin.
That money will also be made faster. "That time to revenue is very important," adds Lambert Jemley, VP of marketing for DocuSign. "I don’t care if you’re a vice president of sales, a CEO or a CFO, you really like the idea of closing deals or getting customer commitment on pieces of paper that generate revenue for your business. The pace of business means it never slows down. So the ability to be faster with getting documents and contracts that drive revenues signed is a huge advantage for businesses."
The e-signature technology even serves as a competitive advantage for those that implement it, especially financial institutions. "Since these companies [that issue student loans, for example] are regulated by the government, the financial institutions don’t have the wiggle room to offer special features and deals, but they can offer faster approval this way," says Noakes-Fry. "For the financial institution, this reduces the risk of losing that business to a competitor. Anytime you give someone a contract and they go away and think about it, a lot can happen."