As financial transactions around the world continue to rely on complex digital systems and handshakes, the way we protect our money must evolve alongside them. After all, we can’t expect to continue using physical documents forever if we want transactions to stay secure.
And yet, up to three-quarters of companies are still using paper checks, for example, despite inefficiencies and increasing costs. While traditional document handling and processing might seem familiar and reliable, they are fast becoming outdated and potentially hazardous for companies and customers.
Digitalisation, of course, can be complex, and there is considerable planning and execution involved that can take months to complete. However, one key step finance companies (and those processing paper transactions en masse) should take immediately is to switch to digital signatures across all their documents.
Why digital signatures matter
Digital signatures have emerged as a natural successor to the well-worn paper-based standard. Through digital contract signing and payment authorisation, key transactions are easier to attach to certain parties, and it’s a quick route towards ensuring complete compliance with data retention and processing.
Learning how to sign documents online is, in the mid-2020s, a simple process that’s easy to train on and roll out across payment handling teams. We now have the systems and software to embed digital signatures into legacy tools and documents, too, meaning it can easily become part of existing processes at minimal cost.
Shockingly, reports show that 63% of companies surveyed by the AFP experienced some form of physical check fraud in 2024. If we’re to face transaction fraud head-on, we need to move more efficiently away from paper documents and legacy signage.
Key benefits
Beyond the obvious benefits of digitalisation in general, there are key benefits of digital signatures in financial transactions worth considering.
Digital signatures allow for faster processing and decision-making. The time it takes for physical checks and financial documents to get signed, authorised, and marked off can be cut down dramatically with automation and streamlined workflows. There are fewer checking steps, and reviews take seconds, not days.
They are more securely stored. Using a leading e-signature platform and data backup system means you can always be sure client signatures are encrypted and kept away from bad actors. Physical documents are always at the mercy of being lost and stolen, which can cause fraud and administrative headaches for all parties involved.
Another security benefit to digital signatures is that, with the right platform, they are easy to create and store so that they can’t be tampered with by third parties. Again, a digital paper trail can effectively verify signing intent and payment processing without confusion. Digital signatures also benefit compliance. In an age where companies face millions of dollars in potential fines for not complying with data protection laws, digital signatures can effectively prove that a company is doing enough to meet certain standards.
Ultimately, digital signatures remove the costs of physical document processing and the checks required along the way. Therefore, this form of digital streamlining frees up administrative hours that can be used more cost-effectively elsewhere.
The future of digital signatures
There are many ways that digital signatures will continue to evolve in finance in the years to come. For one, artificial intelligence can learn to recognise signatures from data to automatically approve payments, calculate money received and sent, and search for anomalies.
What’s more, companies may also use blockchain technology to create records and contracts with even more irrefutability. Digitally signed documents, established on the blockchain, will be even harder to counterfeit or dispute.
Up to 80% of US businesses are already using digital signatures in some shape or form, with that number likely to grow exponentially by the start of the next decade. However, now is the time to start taking steps towards making signage digital, regardless of what trends suggest.