Dematerialising documents is a procedure that has witnessed increasing popularity over the last few years.
Due to the progressive unification of the norms and protocols used for financial transactions throughout Europe (the Single Euro Payments Area, launched in 2002), dematerialisation has become an important means of reducing the processing costs involved in handling payment methods.
There is currently a strong market trend towards dematerialisation throughout Europe, and in France in particular: it’s estimated that, by 2010, 78% of companies’ documents and incoming correspondence will be dematerialised (as opposed to 43% today).
Dematerialisation is gaining ground within the banking and financial sectors that are characterised by uninterrupted services 24 hours a day, seven days a week. In France, for example, almost 15 million inter-bank payment operations (therefore several hundred million pieces of data) are generated annually by every banking institution.
Digital information systems and multimedia
The vast amount of data transfer and storage within the financial sector requires the increasingly widespread use of digital information systems and multimedia. However, this new trend towards dematerialisation is not limited to the world of banking and finance, and concerns numerous sectors of activity, such as telecommunications.
The advantages of a ‘zero paper’ objective are numerous and include the reduction of material and logistics costs, improved traceability, a clearer sharing of information and faster processing speeds. Of course, as far as the Green Lobby’s concerned, it also plays a significant role in the fight against deforestation.
A recent study carried out by Banque magazine in France estimated that 84% of companies from within the banking and insurance sectors had opted for dematerialisation projects last year. These projects were indeed motivated by many different factors: increasing productivity (87%), reducing costs (57%), better control and follow up of activity (57%), offering new services to clients (57%), lowering archiving costs (53%) and making relations between different services smoother, and with sales departments in particular (50%).
Replacing a hand-written signature with a personalised digital signature issued by a bank gives rise to the concept of dematerialising paper-based processes. Today, corporate bodies are increasingly frustrated by the paper-based, labour-intensive processes that exist for simple bank instructions such as opening an account or applying for new products and services with each of their banking relationships.
However, given the importance of an environment of confidence between companies and their interlocutors, the concept raises crucial questions about the reliability and durability of electronic signatures.
Documents with evidential value
There already exist several distinct possibilities of electronic signatures for documents with evidential value (contracts, invoices and cash transfer orders). For example, an individual can today subscribe to a service (bank, insurance, telecoms operator…) either by visiting a sales outlet – where the electronic signature takes place on the premises, using a special custom-made electronic device – or in his/her own home by means of a web site.
In each case, the electronic signature must have the same value as a hand-written signature. However, an electronically signed document is only fully valid if it has been time-stamped, and hence can be verified at any given moment, even after very long periods of time. For this reason, the long term validity of signed archives is necessary whatever the duration of conservation required (sometimes several decades).
With current attention focused on ID fraud and the ever-growing number of “rogue transactions”, it’s crucial that the automation and the dematerialisation of documents goes hand in hand with the implementation of an evidential dematerialisation infrastructure, based on highly secure and reliable solutions.
Innovative certification solutions
Banks and financial institutions have a duty to seek out the most innovative certification solutions on the market today. Many of these are available in outsourcing mode, and enable the straightforward implementation of a mass signature signing infrastructure which guarantees the integrity of sent documents, while at the same time ensuring the traceability of communication exchanges.
In order to guarantee the confidentiality and integrity of electronic communication – which even in-house, contributes significantly to exposing sensitive company information to security breaches – it’s essential to develop encryption and signature tools that dematerialise confidential exchanges of information in a secure manner.
Companies are therefore perfectly equipped to ensure that their dematerialised documents and communications constitute a major asset and enable them to become more competitive and efficient. Embedding digital signatures within bank-to-corporate solutions improves customer service and satisfaction, but also facilitates straight through processing by validating the identity of the initiator in real-time (thereby reducing cost, time and risk).
Clearly, the development of new services via Internet and mobile telephones bring new challenges for the banking and financial sectors in particular. At the same time, the reduction of operating costs and the protection of internal as well as external data flows has now become a major issue.
Element of trust in the process
In this context, the dematerialisation of contracts upstream drastically decreases the flow and internal decision-making process, while bringing about a considerable reduction in paper costs. However, it’s essential that an element of trust is built into the process.
Choosing the most reliable solutions based on electronic signature and digital identity simultaneously ensure the improved productivity of banking services and the development of customer loyalty in a secure environment.
Alexandre Stern is president of Cryptolog (www.cryptolog.com)
Cryptolog will be exhibiting at Infosecurity Europe 2009 – Europe’s leading event dedicated to information security. Now in its 14th year, the show continues to provide an unrivalled education programme, the most diverse range of new products and services from over 300 exhibitors and attracts circa 12,000 visitors from every segment of the industry.
Running from 28-30 April at London’s Earls Court, the show is something of a ‘must attend’ event for all professionals involved in the information security space. See our dedicated link on the right hand panel of this page for more details