What Is a Bank Signature Card?
Every transaction between a financial institution and a customer—from depositing a check to applying for a home loan to one company acquiring another—relies on one document: the signature card. Without this simple but crucial document, all parties to any financial transaction would be at greater risk of fraud. But what exactly is a signature card?
Read on to find out, and to learn more about how the next evolution for this fundamental document—electronic signature cards—has probably already made your life easier.
What is a bank signature card?
A bank signature card is a record maintained by financial services institutions to verify a customer’s signature. This document is signed by the account holder when an account is opened and by new account holders when they are added to the account. It is often kept on file as a physical card, but increasingly bank signature cards are being generated, signed and managed electronically.
What are bank signature cards used for?
A bank signature card is used to authenticate any account activity that req uires a customer signature. There are three common signature card use cases:
Establish a record of account holders. All account holders must have their signatures and other identifying information added to the signature card to create a single record of who has access to and is liable for the account. If new account holders are added after the account is opened, they will add their information to the signature card associated with the account in the course of being added.
Verify the account holder’s signature. When a check is deposited or a withdrawal is made, the teller will compare the endorsement on the back of the check or the withdrawal slip against the signature card. This protects both the customer and the bank from fraud.
Indicate the number of necessary signatures. In both personal and business banking, it may be necessary to require more than one signature for a transaction. Including this information on the signature card makes it easier for the teller to ensure each account’s signature requirements are being followed.
What information should be on a signature card?
The information on signature cards generally consists of basic biographical details. These details include the account holder’s name, date of birth, home or business address, social security number (for individuals), a list of account holders, and a signature from each account holder. Taken all together, this information allows the teller to confirm that the signature card is associated with the proper account.
Can bank signature cards be signed electronically?
Today, signature cards can be signed electronically with electronic signature services like DocuSign eSignature. Signing electronically adds the full force of DocuSign’s security features behind the electronic signature card, making it safer than a wet signature. Electronic signature cards are generally more reliable than physical signature cards and are increasingly the norm across the financial services industry.
Benefits of electronic signature cards
Electronic signature cards have already provided multiple benefits to financial institutions and customers alike. The speed, simplicity, and security of electronic signature cards make the customer experience a much more pleasant one and give bankers peace of mind. Here are three examples of the benefits of electronic signature cards:
Remote account setup. In recent years, the demand for, and necessity of, remote account setup have both increased dramatically. Since a signature card is a vital document in the account setup process, many financial institutions have adopted electronic signature cards as a way to facilitate account setup from a distance.
Faster transaction verification. For any banking transactions that require signing documents, like loan and credit card applications, an electronic signature card can significantly speed up the process. With a physical signature card, photocopies must be made, and then sent through the mail with the signed document. If there is a mistake in the signature card or on the signed document, the process has to start all over again. An electronic signature card, on the other hand, can provide signature verification for an electronically signed document instantly.
Regulatory compliance. In addition to a layer of security for each transaction, in many cases signature cards are a regulatory requirement. If a signature card is missing a signature or has out of date information, a financial institution could be found to be noncompliant and face penalties. Electronic signature cards make regulatory compliance easier by verifying that signature cards are signed and up to date—and making it simpler to locate those that aren’t.
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