SAVE AND SECURE Banks use digital signatures to cut costs, raise customers’ trust

Chennai: Cost-conscious banks are using technology to the hilt. HDFC Bank, Citibank and ABN Amro Bank are sending documents such as statement of accounts for savings, current & credit card accounts, electronic contract notes for equity brokerage transactions, etc using digital signatures. Not only do they save 90% on paper and time, customers too are lapping up these digitally signed documents as they are authentic and tamper-proof.
If you look at the statements that come from these banks, at the bottom right corner of the document will be a signature with a thumb impression. That’s a digital signature which adds authenticity to electronically received document for customers to establish trust with the sender. If anybody changes the signature or successfully tampers with it, the signature will change indicating wrongdoings.
“For messages sent through an insecure channel, a properly implemented digital signature gives the receiver reason to believe the message was sent by the claimed sender. Digital signatures are equivalent to traditional handwritten signatures in many respects; properly implemented digital signatures are more difficult to forge than the handwritten type,’’ said B Robert Raja, CMD, Odyssey Technologies, which focuses on information security software.
The uniqueness of these signatures has led to its popularity in the financial market and among domestic banks, while brokerages too have been quick to recognise the benefits. In India, besides Odyssey Technologies, other companies such as NSE IT (the tech arm of National Stock Exchange) also are players in this niche field.
“Customers can receive the digitally signed documents electronically much faster on their request or on execution of trade compared to paper document that needs to be sent through post or courier, which takes minimum of one business day apart from the day of transaction. As long as the customer’s mail box is not full, delivery is guaranteed, which is a major advantage over paper mail/courier receipt tracking,’’ Munish Mittal, EVP & head, technology solutions group at HDFC Bank said.
Banks send millions of crucial statements per month to customers. While the estimated per unit cost of sending paper account statements works out to Rs 7, the same when done electronically with digital signatures costs only Re 1. Calculating on one million such statements this immediately results in 86% savings right from the beginning.
As the number of statements rise, savings accrued to the bank also rise to 90% as cost of sending each statement is lowered to a mere 40 paise to send one crore documents, estimates suggest. Cost of electronic documents include capital cost amortised over three years and maintenance costs, including network charges, experts add.
At this stage, banks do not charge anything from customers to send digitally signed electronic documents as such solutions help save cost. “It pays for itself over a defined period of time depending upon the cost of solution and volume of such transactions,’’ Mittal of HDFC Bank says.