Signing on the dotted line – the benefits of digitising e-contracting using Dealflo

smith abe

Fintech pioneer Dealflo is urging the asset and auto finance market to take a close look at the benefits of automating high risk, high value transactions through an end-to-end system combining enforceability, compliance requirements and streamlined processes.

Formerly known as IOCS, Dealflo provides a cloud based platform to automate financial agreements for leading financial services providers, automating the whole of the financial agreement process in a single service.

Despite the obvious advantages of agreement automation – which include improved customer experience, reduced cost, increased sales conversions and sales channel flexibility – currently only 48% of consumer finance contracts overall are executed digitally.

Historically, financial services companies have had to use different technologies for separate parts of the process, including online application, identity verification, authentication, document generation, e-signature and vaulting. However, a combination of these technologies does not constitute an integrated end-to-end service and does not take the risk and the friction out of the process.

Abe Smith, CEO of Dealflo commented: “Much of the $15tn a year in financial agreements relies on fragmented or manual processes, which are inefficient, and prone to human error. Compliance is hard to track, and because it’s difficult to prove identity or what the customer saw the agreement could be legally unenforceable, creating a dangerous – and expensive – precedent for the business.”

It’s a big challenge for lenders, as Smith acknowledges, with some household names who have tried in the past to automate parts of the process finding out the hard way that the agreements created by such an approach lacked sufficient evidence and integrity to make them legally enforceable.

Know your customer

Dealflo’s system has been designed to address these critical issues. Its technology verifies the identity of the customer, and proves what they saw and did during the agreement signing. It can connect a customer beyond doubt to their identity, and prove that it was the customer who signed the agreement or that it was not subsequently amended.

Dealflo can be implemented regardless of workflow or geography. Its Verification Hub is unique to the marketplace, giving clients access to the widest range of bureaux and specialist providers of identification and verification solutions to meet Know Your Customer (KYC) requirements. The V-Hub allows the client to configure the level of checks to suit the value and risk of the customer on a case by case basis.

Typically, the process starts by checking customer details against multiple identity and fraud checking bureaux and other information sources, providing full identification of who the customer is.

The system then records what the customer sees online and what they do as they sign the contract. Details of the contract and all accompanying activity are stored in a secure digital vault, sealed in a tamperproof evidence pack. This ensures the lender has a true copy of the customer contract which maintains its integrity.

As Smith explains, this approach has a significant impact on conversion rates, allowing customers to sign the deal, as he puts it, “with just the contents of their wallet and their head” – there is no need to send in utility bills or other paperwork and no time consuming photocopying of documentation.

That also means a faster signing process, with less customer input, while automated workflow for key processes reduces the costs of administration, cuts down on errors and minimises customer drop-out. The paperless process has the added advantage of reducing a company’s carbon footprint.

Moreover, Dealflo’s system is compliant to BS 10008 and ISO 27001 accredited end-to-end, giving dealers and lenders confidence that it is fully compliant with all legal and regulatory requirements.

Legal vs enforceable

Financial institutions which previously sought to automate high value contract agreements have found that one of the biggest hurdles is ensuring that a contract which is theoretically legal is actually enforceable in practice. Several have found to their cost that when tested in court, shortcomings have been identified.

Dealflo’s virtual vault, which brings together all the customer’s actions and documentation is specifically designed to ensure that a contract cannot be repudiated. It provides a full audit trail showing that the customer identity was validated at the point of signature and that the person named was the one who actually signed. It records what the customer saw on screen, and how they interacted with the documents within the digital contract pack.

In addition, the system provides a true copy of the contract, which cannot be changed without being recorded. This creates a simple, persuasive evidence pack, should one ever be required, easily accessible to business users, not relying on the IT department to locate or supply the data – the system is completely independent.

Road ahead

Dealflo’s existing finance sector users have reported impressive results from end-to-end contract automation, with one lender recording a 25% increase in sales since adopting the system, and another reporting a 98% decrease in the time taken to complete a contract.

For the future, the company has plans to incorporate additional identification procedures such as geo location information and biometrics whilst continuing to grow across Europe and North America.

Smith explained: “Dealflo opens up more complex and higher value transactions to genuine online execution, not only reducing costs and sales friction but also increasing enforceability and reducing risk. That is a compelling proposition for our customers.”