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Credit Unions Need Secure Path to Paperless Operations
- Michael Jones
Blockchain technology to protect digital transactions.
The Value of Paperless Operations
Credit unions are always exploring ways to improve their communities and better serve their members. One strategy that can do both is moving away from paper documents and storage towards digital records and paperless operations.
For credit unions themselves, paperless operations save time and costs (alleviating the need to fill out and store paper documents) plus “going green” lightens the environment toll of business. But for members, the benefits are even more dramatic:
- Gaining greater speed and convenience in financial transactions,
- Improving security against fraud and transaction errors,
- Leveraging more efficient audit trails for records and reporting, and
- Eliminating the risk of sensitive financial details found on paper in offices, drawers, even the garbage.
“If every American household viewed and paid bills online, it could reduce solid waste by more than 800,000 tons a year and save about 18.5 million trees,” notes Aspire Federal Credit Union.
Digital transactions provide higher accuracy with fewer errors, improved controls, and greater member satisfaction resulting from simplified process. In addition to cost-savings, perhaps the biggest benefit of credit unions going digital is the increase of productivity and the ability to track the progress of digital signature transactions at every step and in real time.
There are three simple and easy steps to transacting documents digitally:
- Document Preparation: Creating and preparing the digital documents that will control the transaction, for example: Something as simple as filling out a form by hand or in digital format, or something as complex as something that needs a formal document collaboration or document preparation service such as the one offered by legal staff.
- Document Execution: Here documents, contracts, attachments, supporting documents, etc. are signed by one or more authorized parties in a particular sequence (workflow), submitting critical information. Security provisions are enforced and meta data is associated with signatory to ensure the authenticity and validity of each step of the digital documents’ transaction.
- Post-Execution Processes: The post-execution process includes securely storing the document, protecting it against tampering, alteration, and theft. In case of a dispute, the record must contain a detailed audit trail and chain of custody of the transaction for its legality and validity to be proven.
Leveraging such processes, paperless operations can be an effective way for credit unions to differentiate their financial services and provide greater value to their members.
The Need for Superior Digital Security
Moving to a paperless environment requires a commitment to digital security. The newspapers announce one data breach or another almost every day, and the Great Supply Chain Hack of 2020 may haunt government data systems for years: “This is looking like it’s the worst hacking case in the history of America,” says one U.S. official. “They got into everything.”
In this environment of fear and reaction, the promise of distributed ledger technologies offers an appealing new approach to digital security. For example, blockchains have quickly been embraced as a solution for improving supply-chain security for data, communications, and logistics.
Unlike any other digital signature solution, ZorroSign was built from the ground-up on Hyperledger Fabric blockchain architecture. Hyperledger Fabric blockchains are permissions-based and requires all users to authenticate themselves before making requests to read or write into the distributed ledger (i.e., the “blocks” on the “chain”) or taking any action that adds to the blocks on the distributed ledger.
As a private blockchain, ZorroSign can ensure privacy is always maintained as only approved nodes (endpoint users) can write to ZorroSign’s blockchain. This is opposed to public blockchains—like Bitcoin and Ethereum—where anyone can be an endpoint and write to the blocks.
As a result, ZorroSign’s architecture has even tighter privacy and security measures than other blockchains. The key benefits of ZorroSign’s blockchain architecture include:
- Immutability—A chronological record (with date and time stamps) of all transactions in multiple copies on the ledger are maintained to avoid any doubt or ambiguity. This chronological chain provides a robust chain of custody and audit trail capabilities. Blocks cannot be rewritten, edited, or deleted—only added to the ledge—and so ensure document immutability.
- Privacy—Permissions-based private blockchain security and privacy of the members’ information by only allowing permissioned individuals to have access to the transaction.
- Fraud Prevention—ZorroSign’s proprietary 4n6 (“forensics”) token can readily detect any document fraud, document tampering, or signature forgery as a tamper seal that runs on the blockchain.
- Lifetime Escrow—While other digital signature platforms often use third-party digital security certificates that expire every two years, ZorroSign issues its own certificates that never expire for lifetime document escrow.
As credit unions move to more and more digital transactions, ZorroSign’s digital signature and document management platform can decrease costs, reduce errors, and increase productivity. Unlike other electronic signature solutions, ZorroSign’s platform is built on a private, permissioned Hyperledger Fabric blockchain architecture to secure digital assets and deliver security certificates with robust audit trails and lifetime document escrow.
“Blockchain technology can help make credit union transactions more secure, faster and less expensive,” says Shamsh Hadi, CEO and co-founder of ZorroSign.
Learn how your credit union can tap the benefits of paperless and operations and more securely manage your members’ digital signatures and documents . . . contact ZorroSign today!