Even before the COVID-19 wreaked havoc, the world was moving fast towards digitalization. Although there is a fierce ongoing debate on the overall impact of digitization on the world (especially regarding employment rates), there is no doubt that it comes with many benefits for both financial advisors and their clients.
Digital transformation is the integration of digital technology in businesses and it involves adapting and creating digitized operational processes. This includes abandoning the traditional ink and paper practice and letting go of wet-ink signatures while switching to e-documentation and e-signatures.
Related Read: Reducing Compliance Risk with Technology
5 Benefits of Using E-Signature & E-Documentation
1. E-Signature Improves Efficiency
In the financial advisory business, one of the most toiling and monotonous tasks for you is managing paperwork. From client onboarding to shipping, delivering documents between agencies, collecting documents from clients, and getting them signed by various parties. All this often means handling hundreds of documents in a day.
This manual routine requires countless hours in a week in addition to the labor costs for handling those documents. That does not even include the cost of printing, scanning, faxing, or shipping the documents. In case of erroneous documentation, more cost would be required to rectify those errors.
Handling all documentation through traditional methods is no longer a feasible option. Accepting automation in the financial industry has become a necessity rather than an option.
E-documentation allows both you and your clients to save time without having to set up meetings whenever documentation is involved. Numerous hours can be saved if financial advisory firms integrate digitalization into their business routine.
One of the obvious advantages that e-documentation brings is efficiency. Document exchange can happen with merely the click or tap of a button instead of arranging appointments and meetups between various parties. Personal data does not have to be repeatedly filled in forms by hand as it can be conveniently filled digitally in a matter of seconds via the auto-fill option.
When adopting e-documentation, it is a given you will have some sort of data management software in which all client’s personal data will be secured. By eliminating a physical paper trail, there is a much-reduced chance of human errors or privacy infringement.
2. E-Signature Adds to Convenience
In 2020, the global digital signature market size reached $2.8 billion. It is projected to grow to $14.1 billion by 2026. This goes to show that using electronic signatures has a promising future.
Some of the most powerful nations (more than 60 countries) in the world have long declared e-signatures legal and binding. Although there are varying types of e-signatures, they all come with the same benefits.
3. E-Sign Saves Time
Statistics show that 65% of companies using pen and paper reports collecting physical signatures add an entire day to their work process.
If you’re lucky you are able to arrange a meeting on the first call with your client. That meeting might happen the next day or a few days later, till then all you can do is wait. That wait can mean quite some time if there are geographical hindrances and traveling between cities.
Until the client has physically signed the documents, you cannot further carry on the required documentation process. An e-signature saves both the financial advisor and the client time by making that signature in a matter of seconds. There are no delays in signing contracts, payment can be made instantly, and contracts can be executed immediately. Any time-sensitive concern can immediately be addressed.
4. E-Docs Ensures Compliance and Increased Security
Following regulatory compliance is an extremely important matter for you as an advisor. This requires maintaining document records. According to a study by OneSpan/BMO Insights, e-signatures cut scanning errors by 92% and achieved 80% audit efficiency for financial institutions.
With regulatory firms enforcing even stricter rules than ever before, collecting each document from your client, signing them, copying, transferring, and storing these documents can be a cumbersome task. Any suspicious records or compliance concerns could mean fines, license suspensions, and even jail time.
When physical paperwork and wet-ink signatures are involved, they are prone to errors, tampering, and forgery. With the integration of e-documentation along with e-signatures, your documents’ integrity will remain intact and secure.
When using applications such as contract management software, any tampering can be immediately recognized. In addition, e-signatures provide the extra security needed to save you from any compliance complications and eventually any serious consequences.
4. E-Sign & E-Docs are Cost-Efficient
Every business looks for ways of making work more efficient and therefore reducing costs. The same goes for financial advisory firms, especially if they are new startups. Let’s look at what the MSBDocs research have to say:
- Companies that adopt e-signature solutions reduce document handling expenses by 85%.
- Companies also save 80% on shipping costs when they go paperless, on average.
Wet ink signatures come with costs. They can be as simple as paper and ink costs to printing, scanning, faxing, shipping, and delivering costs since documents are transferred from client to advisor and then between various agencies back and forth, often several times repeatedly.
E-signatures can reduce these costs remarkably. A study conducted by LunarPens in 2020 showed that on average $20 can be saved when adopting e-signatures. Considering the number of documents handled each day by financial advisors, that amount can amass a significant number.
Since in business, time means money, a lot can be saved by reducing document handling costs in addition to the excess time required to fix any errors made.
Serving Your Clients Better
Every business aims to conduct business faster, cheaper, and better. The financial service industry can benefit greatly by integrating automation into their daily processes and transitioning from the traditional ink and paper methods to electronic documentation and signatures. This change will help you save time, cost, and become more efficient and therefore focus more on providing a satisfactory experience to your clients. solutions.
