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Use of E-Signatures Rising as Firms Battle Competition
 

By Kathy Gurchiek  6/9/2008

Use of electronic signatures is seeing an uptick in 2008, eight years since Congress passed the Electronic Signatures in Global and National Commerce (ESIGN) Act, according to the Electronic Signature and Records Association (ESRA).

E-records and signatures are fast becoming a way for businesses to differentiate themselves among competitors, especially for businesses in the financial sector such as mortgage and other lending firms, noted Jerry Buckley, one of the counsels to ERSA, during a June 2008 news conference advocating electronic records and signatures.

He cited a six-fold rise in e-mortgages over 2007, adding that five of the top 10 insurance carriers in the United States offer electronic signatures. These developments indicate “a significant turning point in the adoption of electronic signatures.”

Electronic signing was one of the top 10 information technology initiatives for the insurance industry in 2008; 77 percent of mortgage lenders indicated they will implement electronic signatures, he added.

The auto industry is also driving the adoption of electronically signed contracts in processing car loans, and online travel agency Expedia is using web-based electronic signatures to turn around available hotel inventory more quickly, according to ERSA’s June 2008 newsletter.

ESIGN amended thousands of state and federal laws to permit the use of electronic signatures and records in place of ink signatures and paper, and there was concern that the law’s passage would open the floodgates for electronic transactions, Buckley said.

Until recently, though, inertia and an attitude of “I know it works on paper” have been the principal barriers to employers adopting electronic signatures and record keeping, Buckley said.

Legal uncertainty and the lack of financial and technological resources required to migrate industries to new platforms and modes of business also have been challenges, according to ERSA.

Only in 2008 is the marketplace seeing significant measurable acceptance of its use, Buckley observed.

“The train is leaving the station,” he said, suggesting that organizations that hop on will see an economic advantage. “People should be really ready to get on board.”

U.S. Rep. Jay Inslee, D-Wash., a principal architect of ESIGN, has asked the Congressional Research Service to study the law’s impact, but it was unknown when that study would commence, Buckley said.

Using e-signatures and electronic records can benefit human resource professionals, making it easier to store and retrieve information they deal with, protect confidential information and destroy that information when it’s no longer needed, ERSA member Crissy Taylor told SHRM Online. Taylor is business development manager for St. Louis-based Computime Inc.

HR might face the barrier of selling senior management on the investment of time and money required to make the change from paper to electronic records, Taylor said.

Outweighing those costs, according to ERSA, are benefits that include:

  • Reduced transaction costs.
  • Significant increase in the speed and closure rates of transactions.
  • Faster detection and correction of errors.
  • Process management that is built into transactions so required disclosures, storage retention times and notifications can be handled programmatically and not forgotten.
  • Reduced carbon footprint from eliminating the need to reproduce, process and transport paper contracts.

ERSA was formed in 2006 and is based in Alexandria, Va. Its founding board members include Adobe Systems, AIG, DocuSign, Fidelity National Title, Genworth Financial and Wells Fargo Home Mortgage.

Kathy Gurchiek is associate editor for HR News. She can be reached at kgurchiek@shrm.org.

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