To adapt to the current world of Web3, organizations must provide flexible, digital alternatives to their traditional business processes. One such process being turned to is the electronic signature/e-signature - which serve as a digital substitute for in-person transaction signing, can help improve the consumer experience process and better secure each step along the transaction lifecycle.
In today's thriving digital economy, businesses and consumers are increasingly embracing online transactions, even those of high value. As organizations adapt to the evolving digital landscape, they are exploring flexible digital alternatives to traditional business processes.
The rise of e-signatures in the digital landscape
Electronic signatures, or "e-signatures," have emerged as a pivotal tool in this transformation. They serve as a digital substitute for in-person transaction signing, enhancing the consumer experience and bolstering security throughout the transaction lifecycle. Similarly, remote online notarization is gaining traction as a means to secure high-value transactions like contractual agreements, mortgages, and powers of attorney.
However, amidst this digital revolution, concerns are growing regarding the integrity of these digital agreements, especially as the volume and value of online transactions increase.
According to a study by MSB Docs, 65% of companies who rely on traditional pen and paper methods report that collecting physical signatures adds a full day to their work processes. E-signatures, in addition to streamlining workflows, improve customer experiences, eliminate errors, and enable process tracking. However, the rapid adoption and convenience of e-signatures have led many businesses to overlook certain security considerations.
SVP & GM, Digital Agreements, OneSpan.
Security and e-signatures
The Neustar International Security Council recently reported that roughly 50% of companies lack adequate budgets to meet their current cybersecurity needs, posing a significant risk to industries conducting high-value transactions online. Cifas, a UK fraud prevention service, has also highlighted a surge in identity theft, with cases soaring by 23% in 2022. These statistics underscore the need to strengthen cyber laws to protect critical services and their supply chains effectively.
One of the primary challenges for businesses is implementing stringent cybersecurity practices without disrupting the customer journey. Customer abandonment and drop-off rates are always a concern, as even the slightest inconvenience can drive consumers away. While customers seek trusted online experiences, many organisations mistakenly believe that security measures can disrupt the customer experience. However, the 2022 State of Digital Trust Survey revealed that 47% of consumers have stopped doing business with a company after losing trust in its digital security, and 84% would consider switching providers.
To mitigate these consequences, businesses must emphasize the importance of prioritizing both cybersecurity and customer experience, finding a balance between the two. The following initiatives provide a solid starting point for securing digital interactions.
Compliance as the foundation
In the year ending March 2020, cyber-related fraud incidents increased by 61%. UK Finance also reported a staggering 151% rise in fraud. In response, the government updated cyber laws and implemented strict security measures to set higher cybersecurity standards in the UK. While compliance requirements with these laws may vary based on company location and industry, one thing is clear – non-compliance by businesses is costly.
Not only can non-compliance with these security measures result in fines of up to £17 million, but failing to adhere puts businesses at higher risk of falling victim to cyber fraud. This underscores the critical importance of organizations adhering to security laws when implementing e-signature solutions. By doing so, businesses can ensure maximum security for users and minimize the ongoing risks of identity fraud.
When considering remote online notarization as another means of securing high-value transactions, such digital alternatives introduce additional complexities in compliance. Unlike traditional notarization, which involves in-person screenings, remote online notarization requires organizations to virtually authenticate applicants' identities. This authentication process often involves ID verification and Knowledge-based Authentication (KBA) to meet stringent standards of authentication and verification. Only after successful authentication can the e-signature be executed, ensuring compliance with necessary security protocols.
Authenticating every step of the way
Digital processes and customer interactions need to be secured at every step along the transaction cycle. While one-time verification may seem secure, continuous authentication is essential for securing e-signatures and notarizations. Organizations should ensure security measures are integrated into every touchpoint in the customer journey.
The digitization of high-value transactions offers numerous benefits, but it exposes organizations to heightened risk if the associated cyber threats are ignored. In the modern digital landscape, organizations must be fully aware of cyberattacks and compliance failures that could jeopardies the validity of online transactions. Industries handling valuable information, such as automotive, banking, real estate, legal, and insurance, particularly need to ensure that online notarizations operate within a secure environment.
With this awareness, application providers should priorities security in all their choices. Businesses should embrace heightened security integrated into every aspect of transactions and agreements. Organizations involved in high-value transactions should consider investing in e-signature and notarization solutions that incorporate multi-factor authentication, identity verification, encryption, and other robust procedures. These steps are essential in protecting sensitive data, verifying the legitimacy of transaction participants, and ultimately helping businesses build back consumer trust.
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