For most of human history, our signatures were our bond. At the start of our digital evolution, many industries were resistant and reluctant to concede that electronic signatures would ever be a viable and acceptable alternative to pen and paper. However, as security measures have improved and increased, we now consider e-signatures a legally binding method of signing contracts and other agreements.

Those of us familiar with the digital landscape know that security measures are always tested and that fraud, however, is always lurking around the corner.  So we seek to find ways to protect our names, our accounts, our agreements, our personal information, and our businesses. The growth in popularity of e-signatures has also come with significant changes in security measures to offer validity and authenticity, including technology like biometric authentication for added protection.

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What is Biometric Authentication?

Biometric Authentication relies on distinctive physical human characteristics to recognize and digitally verify the identification of a particular person. Characteristics can include fingerprints, facial recognition, voice recognition and retinal scans. While these physical characteristics are the predominant biometric measurements utilized, other non-physical methods, referred to as behavioral biometrics, are also individualistic such as typing cadence and print behaviors.

For security purposes, biometric authentication can be used by businesses and organizations to grant access to physical spaces, systems, devices, or even documents and data. Because these biometric identifiers are unique to a specific individual, biometric authentication offers a greater level of security. In comparison to passwords, which are things the user is expected to know and therefore can be easily forgotten or be hacked; biometric markers are something that are physically inherent in the user which are extremely difficult to replicate. 

woman uses stylus to sign her name on tabletThe Difference Between e-Signatures and e-Signatures with Biometric Authentication

Over the last decade, much of what we do, including signing contracts, has moved to the digital space. This trend has accelerated even more in the past year as remote work became a necessity. Multiple platforms have seen significant growth with e-signature services that enable legally binding approvals with the convenience of allowing individuals to simply type their name as laid out in the document being signed.

However, like most online transactions, e-signatures are vulnerable. Much like handwritten signatures, they may be misused or forged. For that reason, anyone conducting online transactions, particularly those involving contracts, loans, or other financial agreements should be investigating additional ways to verify and authenticate the signer.

While e-signatures may include security layers or some type of multi-factor authentication, the most secure method of verifying a signer’s identity is through the use of biometric authentication. In fact, in a recent California case, an appellate court found that the defendant did not sufficiently authenticate the electronic signature of the contract in question  - - they could not prove who actually e-signed the contract. This suggests standard e-signature platforms may not be enough to protect businesses, or consumers for that matter, should a case go to trial. E-signatures with biometric authentication require the intended signer (and only the intended signer) to sign the contract, and uses a biometric characteristic to verify the signer’s identity, providing that extra proof. 

Use Cases for Biometric-Authenticated e-Signatures in the Finance Industry

Covid-19 has further accelerated the pace and need for e-signatures and the security required than the financial services industry and banking. Because these industries typically rely so heavily upon paperwork and signed documentation, the processes take a lot of time, making it  ripe for optimization.

Banks searching for ways to cut costs (by eliminating timely manual processes), improve customer experience, and enhance security are finding that e-signatures with biometric authentication enable them to address all of these challenges.

1.Opening Accounts

The best part about utilizing biometric authentication from the point of account opening is that it allows a user to digitally sign and authenticate any transactions originating from that bank right from the start. Furthermore, there’s evidence to suggest that not having a fully automated account opening option can result in a customer drop-off rate of 65-95%. Allowing users to onboard and open accounts utilizing e-signatures with biometric authentication eliminates the need for individuals to visit a branch (a major concern during Covid) and, similarly, improves the customer experience by eliminating wait times and manual paperwork. 

2. Signing for Loans/Insurance

Contracts, loans, and insurance documents require signatures, even when a fund transfer isn’t immediate. These transactions have largely moved virtual already. In fact, most realtor and real estate associations and industry groups recommend the shift to e-signatures for streamlining home purchase and insurance transactions. Utilizing an e-signature with biometric authentication adds an extra level of security for these transactions.    

3. Payment Transfers

When making a major purchase, such as a car or a home, typically the down payment or closing cost is made via a wire transfer. For this process you need to ensure all steps of this process are secure. Including an e-signature with biometric authentication helps enhance security and transactional integrity. 

4. Bank-Issued Credit Cards

With approximately 4% of annual revenues coming from credit card interest, and interest rates averaging around 16%; enabling bank customers to apply, verify, and sign online streamlines the credit approval process. The easier a bank can make this credit application process the more likely customers are to apply and the more likely a bank is to realize those potential revenues. Further, when consumers have a card from your bank, they’re more likely to use other services as well, like loan servicing. For that reason alone, simplifying and securing the credit card application process through e-signatures with biometric authentication can help expand your business.

Additionally, new account fraud - when a fraudster signs up for a credit line using another individual’s name and information - is up by 13% resulting in 3.4 billion in losses. Including biometric authentication on credit card applications helps protect your customers. 

man in glasses holds phone while facial recognition scans his faceHow Biometric Authentication Improves Validity of e-Signatures

Any transaction involving a legally binding signature should require the highest level of security available, especially when those transactions provide access to funds and occur digitally. It’s why the financial sector has been among the first industries to adopt biometric authentication. While an e-signature is legally equivalent to a handwritten signature, these days, most consumers and businesses want greater certainty and expect more accountability. That’s where biometric authentication comes in-- it can assure that the person signing is the intended signer and verify their identity. 

Other Security Challenges Resolved with Biometric Authentication

While one of the primary uses for e-signatures with biometric authentication is for financial and contractual transactions, there are a variety of other uses, and it’s worth noting that these use cases will likely continue to grow.

To start, any office or organization that requires the use of signatures for identification purposes or agreements, such as government offices like the secretary of state or division of motor vehicles, could potentially, in the future, require e-signatures with biometric authentication as a means of preventing fraud in licensure, in vehicle registrations, and voter registration.

In the retail sector, credit card transactions and the signatures that accompany them can be disputed. While the intent of the signature on a physical card is for verification purposes, most associates or restaurant servers fail to inspect cards and authenticate signatures. As such, while fraud rates have dropped by 80% with card readers, further disputes could be settled or avoided altogether with security such as biometric authentication.

As noted elsewhere, online transactions including purchases, rental agreements, and other contracts are typically protected by passwords, which are easily hackable. Online retailers and e-commerce providers could reduce fraud rates via a biometric authentication solution.

Smart Eye Technology Provides Cutting Edge Security with Biometric Authentication  

When you’re looking for security solutions, you want to choose a biometric authentication partner who’s got the experience and expertise to understand the changing landscape and demands of security solutions across multiple industries. From document and data security with unprecedented transparency and control, to cutting edge biometric technologies, Smart Eye has a solution for you and your industry. In fact, Smart Eye’s solution utilizes continuous facial recognition while the document is being viewed, ensuring that the signer, and only the intended signer, is viewing and signing your contract.  

You want security you can trust and you want a partner you can trust. Get in touch with our team today to talk about how Smart Eye Technology can work for you.

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