Often when businesses conduct transactions or use contracting for their financial assets consider undergoing a digital transformation, they research the best eSignature solution to go “paperless.” Unfortunately, this common approach of thinking about digital transformation is actually backwards.
However, more and more executives are realizing, eSignature technology is just the tip of the iceberg when it comes to enabling and managing your contracting processes digitally. For an electronically-signed document to remain enforceable, admissible and negotiable, specific processes must be followed. Many businesses do not consider the needs of the contract after the document is digitally signed, therefore resulting in infrastructure conflict, risk management issues and process complexity.
The treatment of documents or contracts as assets represents a fundamental departure for the eSignature business, meaning that the life of the asset is as important as its creation and initial storage. Therefore, for many businesses, the barrier to digital contracting does not lie in capturing the signature electronically, but rather in what happens after the document is signed.
Businesses must map-out the lifecycle of a typical document to determine how the downstream life will affect how they manage, protect and execute their digital contracting. In this perspective, the first thing you need to consider is the document custodians who often hold the document for businesses.
Starting at the Finish Line: Document Custodians
Until recently, the leading traditional document custodians were not accepting digital documents. That means even if you go through a digital transformation with your contracting processes you would end up reverting the document back to paper in the end. That begs the question, why go digital if the last mile isn’t?
To meet the expectations of their customers, more financing sources and financial custodians have embraced digital signing of loan contracts.
In September 2015, U.S. Bank announced its partnership with eOriginal for document custodian services for firms issuing securities backed by digital assets. Bryan Calder, president of U.S. Bank Global Corporate, stated, “The securitization process has always required significant documentation, so digitization creates an opportunity for issuers to increase efficiency and reduce costs. As a leading document custodian, we’re pleased to be able to accommodate this growing trend in the marketplace.”
The acceptance by U.S. Bank is not only the start of a digital revolution among traditional custodians, but it adds to the growing number of digital custodians, such as alternative custodial services providers like Millennium Trust Company and Equiant, who specialize in servicing the timeshare and vacation ownership industry.
The Middle: eVaulting – Digital Financial Asset Management Solution
The next layer of a digital transformation prior to the eSignature is managing the assets and transactions in a digital platform. An electronic vault manages the legally binding, Authoritative Copy of an electronically-signed document, and possibly its related transaction documents, in a secure location where it is held and transitioned during the entirety of its lifecycle.
To ensure that an electronic document remains legally admissible and enforceable, utilizing an electronic vault after digitally-signing will permanently bind electronic signatures to the document and creates a tamper-evident audit trail that is essential for financial assets.
Holding documents in an electronic vault bolsters legal enforcability – of both the signed document and properly certified copies of the Electronic Original®. It also ensures compliance with the various legislative requirements. A true electronic vault should provide irrefutable proof that the document in the institution’s control is the original, unaltered document. The electronic vault should also allow privileged access to the documents without compromising the integrity of the originals.
To learn more about the role of eVaulting within digital financial asset management, download our white paper, titled “The New Possible in Electronic Asset Management,” below.