How e-Signature Prevents Scams And Frauds In The Finance Sector
by Abdul Aziz Mondal Business Security Systems Published on: 16 August 2022 Last Updated on: 08 November 2024
Fraud is a huge problem in the financial industry, with millions of dollars lost to scammers and fraudsters every year.
While blockchain technology has helped reduce some of these losses, there are still many ways that criminals can target banks and other financial institutions.
One of the most popular ways they do this is through an e-signature service – electronic documents requiring the signer to use their name and personal information to complete transactions or agreements.
Scammers can use this information to create fake identification documents, which they use when attempting to commit financial frauds like identity theft or credit card scams.
In this post, we’ll explore how e-signatures work and why they’re so important for protecting against fraud, as well as how blockchain technology might be able to help reduce identity theft even further.
Sharp Rise of Incidents
The financial industry is a target for fraudsters and scammers, who are constantly looking for ways to steal your money. In fact, according to the FTC, consumers reported $5.8 billion lost to scams, up 70% from 2020. The reason? Rapid growth!
As a result of technological advances and economic development, more people are using online banking services or investing online.
This increase in the number of users means that there’s also an increase in transactions between them, which is why cybercriminals see it as an opportunity to steal people’s money.
But what about traditional methods? Fraudsters have often targeted banks with phone calls where they pretend to be employees and ask customers for personal details such as credit card numbers or PINs through various pretexts (e-mails or phone calls).
These types of scams have been around long before e-signatures existed, but now there’s another reason these attacks are becoming more common: e-signatures can help prevent them from happening.
How Does e-Signature Help?
A digital signature is a legally binding electronic equivalent of a handwritten signature. It enables you to validate the signer’s identity and prevent tampering while providing legal proof that the signer has agreed to your terms.
An e-signature service can be used in many ways, from online signing up for a credit card or bank account to applying for loans or mortgages.
For example, if you take out a loan with e-signature verification, one of its many benefits is that it speeds up the process, so you don’t have to wait around at the bank for signatures to be verified by hand.
Business Benefits
Most importantly, e-signature is a paperless process. It means you don’t have to print anything and use it for the signatures of your employees, clients, or any other person involved in the transaction.
In addition to being paperless, e-signatures are safer and more secure than handwritten ones. The signature cannot be copied or faked easily because of its complex nature. Therefore, it can prevent scams and frauds from happening in the financial industry.
E-signatures save money by eliminating paper waste while printing documents with signatures on them. Moreover, offices in the US use 12.1 trillion sheets of paper annually. It results in around 26% landfill and 33% municipal waste. It can be prevented using e-signature.
If you want to reduce costs even further, consider using digital signatures, which are even more affordable than traditional methods like ink stamps or wet pens. We’re surrounded by technology these days, so integrating new solutions into our daily workflow shouldn’t be hard.
Control and Customizability
E-signature gives you control over who can sign documents, what documents can be signed, where they are signed, and when.
This feature is particularly helpful in preventing scams and frauds as it allows you to determine which locations your employees can sign a document from. If a signature has been added from an unauthorized location or by an unauthorized person, then you will have the proof needed to deny payment for that transaction.
The sender and receiver use this technology to create the digital signature attached to each contract or agreement involved in their business operations. Once both parties have agreed on everything, including all terms of engagement, signatures are digitally affixed onto both copies of any form being used.
Integration Opportunities
E-signature is a versatile technology that can be integrated with other software and used for multiple purposes.
For example, e-signature can be used to improve workflow by automating repetitive tasks and reducing errors. It also allows you to use data from your existing systems more effectively, giving you better insight into what’s happening within your business at all times.
E-signature allows for a better customer experience as well. Customers will be able to submit their information faster and easier, which means fewer mistakes on the part of both parties involved in the transaction and less time spent dealing with those mistakes.
In addition to all these benefits, e-signatures may even help improve your company’s image by demonstrating transparency. If all documents are signed electronically, who is responsible for each document or change made in an account (or portfolio) becomes clear.
It helps keep financial institutions accountable when something goes wrong, which could mean fewer complaints against them.
Bottomline
E-signatures are a great way to ensure that your financial transactions are safe and fraud-free.
They provide an easy way for anyone to sign documents digitally using special software instead of traditional methods like ink and paper.
With the help of e-signature technology, you can avoid identity theft scams and fraudulent activities by ensuring that only authorized users can access sensitive information about their finances.
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