High-value transactions in the digital age: ensuring trust and compliance
To adapt to today’s Web3 world, organizations must provide flexible, digital alternatives to their traditional business processes. One of these processes that people are focusing on is the electronic signature/e-signature. Serving as a digital substitute for personally signing transactions, it can help improve the consumer experience process and better secure every step in the lifecycle of a transaction.
In today’s booming digital economy, businesses and consumers are increasingly embracing online transactions, even those of high value. As organizations adapt to the changing 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 proven to be a crucial tool in this transformation. They serve as a digital alternative to signing transactions in person, improving the consumer experience and increasing security throughout the transaction lifecycle. Likewise, remote online notarization is gaining traction as a means of securing high-value transactions such as contractual agreements, mortgages and powers of attorney.
However, amid this digital revolution, concerns about the integrity of these digital agreements are increasing, especially as the volume and value of online transactions increase.
According to a survey by MSB Docs, 65% of companies that rely on traditional pen and paper methods report that collecting physical signatures adds a full day to their workflows. Electronic signatures not only streamline workflows, but also improve customer experiences, eliminate errors and enable process tracking. However, the rapid adoption and convenience of electronic signatures has led many companies to overlook certain security considerations.
SVP & GM, Digital Agreements, OneSpan.
Security and electronic signatures
The Neustar International Security Council recently reported that roughly 50% of companies do not have sufficient budget to meet their current cybersecurity needs, posing significant risk to industries that conduct high-value transactions online. Cifas, a UK fraud prevention service, has also highlighted a rise in identity theft, with cases set to rise by 23% by 2022. These statistics underscore the need to strengthen cyber laws to effectively protect critical services and their supply chains.
One of the key challenges for businesses is implementing strict cybersecurity practices without disrupting the customer journey. Customer abandonment and churn rates are always a concern as even the slightest inconvenience can drive consumers away. As customers look for reliable online experiences, many organizations mistakenly believe that security measures can disrupt the customer experience. However, the 2022 State of Digital Trust Survey shows 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 impacts, companies must emphasize the importance of prioritizing both cybersecurity and the customer experience, and striking a balance between them. The following initiatives provide a solid starting point for securing digital interactions.
Compliance as a basis
In the year ending March 2020, cyber-related fraud incidents increased by 61%. UK Finance also reported a staggering 151% increase in fraud. In response, the government updated cyber laws and implemented strict security measures to set higher cybersecurity standards in the United Kingdom. While the compliance requirements of these laws may vary depending on the company’s location and industry, one thing is clear: non-compliance by companies comes at a high cost.
Not only can failure to comply with these security measures result in fines of up to £17 million, but failure to comply puts businesses at greater risk of falling victim to cyber fraud. This underlines the critical importance of organizations adhering to security laws when implementing electronic signature solutions. By doing this, companies can ensure maximum security for users and minimize the ongoing risks of identity fraud.
When remote online notarization is considered another way to secure high-value transactions, such digital alternatives introduce additional compliance complexity. Unlike traditional notarization, which involves in-person screenings, online remote notarization requires organizations to virtually verify the identity of applicants. This authentication process often includes ID verification and knowledge-based authentication (KBA) to meet strict authentication and verification standards. Only after successful authentication can the e-signature be performed, ensuring compliance with the necessary security protocols.
Authentication of every step
Digital processes and customer interactions must be secured at every step in the transaction cycle. While one-time authentication may seem secure, continuous authentication is essential for securing electronic signatures and notarizations. Organizations must ensure that security measures are integrated into every touchpoint in the customer journey.
The digitalization of high-value transactions offers numerous benefits, but exposes organizations to increased risk if the associated cyber threats are ignored. In the modern digital landscape, organizations must be fully aware of cyber attacks and compliance gaps that can compromise the validity of online transactions. Industries that handle valuable information, such as automotive, banking, real estate, legal and insurance, need to be particularly careful to ensure that online notarizations operate within a secure environment.
With this realization, application providers must prioritize security in all their choices. Companies must embrace increased security, integrated into every aspect of transactions and agreements. Organizations involved in high-value transactions should consider investing in electronic signature and notarization solutions that include 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 companies regain consumer trust.
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