Technology - the rise of the e-signature


There is a technology that US businesses, including insurers, have adopted wholesale, but that the UK has been slow to pick up. Guy Williams explains

Technology takes centre stage and plays a fickle role between giver and taker, creating complex challenges for the unprepared, while empowering the astute with solutions to grow and thrive.

One such technology has yet to take off in the UK, but it has already taken the US by storm. The company that established the technology was ranked by The Wall Street Journal as sixth on its list of ‘The Top 50 Next Big Things' out of 5,900 other contenders. That was back in 2012. The company is now the global market leader and recently reported more than 40 million users in 188 different countries.

Of interest to the UK financial services market is that in the US, 12 of the top 15 insurers and 11 of the top 15 wealth management firms have chosen to use this technology. Each of these companies has a compelling story to tell, ranging from how they reduced cycle time by up to 50%, reduced operating costs, or improved their customer journey significantly.

For example, The Independent Insurance Agents & Brokers of America (Big ‘I'), a national alliance of more than 250,000 business owners and employees, has chosen this technology as its standard to improve levels of service to its clients.

However, it's not just insurers and brokers in the US who have been persuaded. Many multinationals have strategically adopted the technology and it has become part of their global DNA: names such as Google, Sony and Hewlett Packard. Even the US Internal Revenue Service is a well-established user.

The recent announcement that Microsoft is including it as a core part of Office 365 shows that the technology is becoming a mainstream office productivity tool.

So what is this game-changing technology? It's electronic signature. The e-signature solution referred to here is fully compliant with the 2002 European Union directive regulating electronic communication. It provides a court-admissible Certificate of Completion and comes with a comprehensive digital audit trail. In short, e-signatures are legally binding.

However, for an industry still riddled with paperwork in a digital world, we are proving to be slow adopters. For a typical UK consumer hoping to buy protection, all is well until they are asked for consent by the insurer to access medical records, at which point the slick online process falls into disrepair. The hapless applicant then waits for a few days until a letter arrives, probably then waits a few more days, signs it, finds a stamp and then trots off to catch the post.

Apart from this example, just imagine how many other signature requests UK insurers issue each day, with every one guaranteed to add delay and cost. When compared with the ‘one click' Amazon experience, it highlights how far behind we are in providing our customers with relevant and exciting propositions in the digital age.

The irony is that technology has empowered us with a solution that has already proven good enough for corporate America. When an investment platform in the UK was asked if it thought replacing wet signatures with e-signatures would make everyone's live easier, they generally agreed it would, but they also thought insurers would not accept e-signatures.

Recently, we conducted a survey among IFAs to fi nd an insight into their views on the subject. Support was strong, with 85% saying they would consider adopting the technology with their own clients, and 93% agreeing that it would help solve the AMRA issue if adopted by insurers.

Insurers are increasingly interested, but a number cite the BMA as being a problem by not recognising that electronic signature is legally binding. The BMA is the champion of the medical profession and provides guidance for GPs on the subject of consent. At the heart of this issue lies the requirement for each medical practitioner to satisfy themselves that the patient has knowingly consented to their medical information being passed to an insurer.

Until the recent coming of age of electronic signatures, the wet signature proved to be the best, or possibly only method of proving patient consent. However it remains to be seen how long the ageing wet signature can hold out in the face of stiff competition from the new generation of electronic signature with its own arsenal of evidential assistance in the case of a legal challenge.

It seems that all the main insurance related parties are interested and generally everybody appreciates it. Not surprisingly, there are a few pockets of resistance to change, but despite the interest, nobody has really yet taken the plunge.

So, is this an opportunity lost and one to be fi led away in the ‘too difficult' box? Or is it a call to arms, where we can rally around as an industry, agree standards, and all begin to benefit from this ‘next big thing'?

Guy Williams is director at LISS Systems

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