Interview with Signicat on electronic signatures

Thursday 26 March 2020 10:32 CET | Editor: Mirela Ciobanu | Interview

Signicat’s John Erik Setsaas shares insights about successful digital onboarding processes for customers via electronic signatures and gives us a sneak peek into the future of digital identity

The payments industry sees achieving consumer trust as a crucial feature of a successful business. Why are electronic signatures important topics for this idea?

Doing business online requires an inherent need for trust where we are witnessing fraud to be increasingly sophisticated, especially in the payments industry. Cyber-criminality is common where payments are easier to intercept in a digital society. In Europe alone, the annual value of fraudulent transactions was EUR 1.8 billion.

An electronic signature is a legal way to get approval on electronic documents or transactions such as payments. It can replace a handwritten signature in virtually any process and are legally valid. And remember that electronic signatures are also tamper-evident, meaning that any change to an electronically signed document will be flagged. 

With the well-established electronic identity (eID) infrastructure in Norway, it is simple for anyone to sign a document electronically, which is used a lot from borrowing money, renting an apartment, to confirming the name of your newborn child.

How can electronic signatures enable financial institutions to balance compliance (there are many regulations, with updates) and customer experience?

As we are used to scribble a signature with a pen on a paper, a lot of people think that an electronic signature is scribbling the same signature on a digital device. But it is important to note that this does not give any identification of the user signing, so a better mechanism is needed. For an electronic signature to be useful for financial institutions, it must identify the signer. This is also the requirement from the eIDAS regulation for AES (Advanced Electronic Signatures) and QES (Qualified Electronic Signatures). In addition, the signed document must be tamper-evident, meaning that any changes to the document after the signature was added shall be detected.

The difference between AES and QES lies in the processes to both validate the identity of the signer, and the requirements of the signing solution. In general, QES is more complex and more costly, and may not always be needed.

There are two real benefits of using AES or QES which is that it firstly is efficient and secondly, secure. In our digital age, paper-based processes of signing, sending reminders, scanning, and e-mailing should be obsolete in all business operations. Not only should consumers’ electronic signatures be verified and secure, but the management should be automated, thereby speeding up financial institution’s operations resulting in significant cost reductions and improved customer experiences. 

What is the complete digital identity lifecycle? What services should a service provider offer in order to achieve it?

Most often, companies and service providers focus on only one aspect of a customer’s digital lifecycle, whether that is onboarding or electronic signing, and fail to capitalise on a customer’s full digital engagement potential. Signicat’s Digital Identity Platform enables the full digital identity lifecycle, incorporating the most extensive suite of identity verification and authentication systems in the world, all accessible through a single point of integration.

Signicat is a qualified trust service provider (QTSP) enabling the full digital identity lifecycle from:

  1. Onboarding – verifying a user when they first onboard to a business or service;
  2. Validation – verifying a user against additional due diligence checks such as against any sanction lists, address registries or credit scores;
  3. Authentication – once users are onboarded, returning users will need secure methods to continue logging in and accessing those services;
  4. Electronic signing – ensuring users can sign legally binding agreements online, in a secure and trustworthy way.

The foundation of the platform is the technical ‘hub’. Businesses can get all the tools they need for their customers’ digital identity through us, no matter where they are located or conduct business. The hub provides access to the following services:

  • Electronic Identities – we connect to over 25 electronic identity (eID) schemes globally;
  • Attribute providers – connect to public and private registries to provide additional information about a user (B2C) or organisation (B2B)
  • Identity verification providers – do additional verification checks such as scanning of over 6000 identity documents from passports to driver’s licenses; to enabling web-based video interviews; to NFC-reading of passports. 

How can financial institutions (especially banks) boost the customer onboarding process with the help of digital identity verification solutions?

Signicat’s Battle to on Board III study conducted in 2018, surveyed over 3500 individuals in over six countries in Europe demonstrating that 40% of consumers abandon onboarding. That’s 2 out of 5 customers that financial institutions – especially banks – are failing to recruit. Financial institutions spend significant funds to first attract these customers, which is then completely wasted due to cumbersome onboarding processes. Among consumers, 25% describe financial services applications as somewhere between difficult and painful to complete where they find onboarding takes too much time, there is too much personal information users have to provide or there is an overall poor user experience. The challenge here is that only 10% of financial service providers see their own onboarding process as difficult or very difficult.

Compared with a paper-based onboarding processes, digital onboarding reduces the average time it takes to onboard a customer. Aegon, one of the world’s leading financial service organisations providing life insurances, pensions, and asset management was able to reduce customer onboarding from 4 days to 30 seconds using Signicat’s Digital Identity Platform. In addition, they had savings of EU 100,000 and 2400 kg of paper in their first year, as a result of the effective digital onboarding process.

The interview was first published in the Digital Onboarding and KYC Report 2020, which offers insightful editorials on topics such as digital onboarding best practices and key challenges, financial crime and how to fight it, crypto, and more.

About John Erik Setsaas

John Erik Setsaas is VP of Identity and Innovation at Signicat. He is responsible for ensuring that Signicat’s digital identity services are at the forefront of innovation, and solve the needs of customers, partners, and end users. John Erik Setsaas has over 20 years’ experience in identity and over 30 in software product development. He is also a board member of the EEMA, Europe’s leading digital identity think tank.


About Signicat

Signicat is a pioneering, pan-European company with an unrivalled track record in the world’s most advanced digital identity markets. Its Digital Identity Platform enables the full digital identity lifecycle, incorporating the most extensive suite of identity verification and authentication systems in the world, all accessible through a single integration point.

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Keywords: Signicat, digital identity, electronic signatures, John Erik Setsaas, KYC, digital onboarding, banks, electronic identity, eID
Categories: Fraud & Financial Crime
Countries: Europe
This article is part of category

Fraud & Financial Crime

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