About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Online Bank Applications Issues: Why Do Signature Cards Still Exist?


Internet banks aren’t the only ones that are moving to an all-online application process. I’ve become members at a few credit unions that didn’t require any mail. I was able to join the credit unions and open and fund CDs with just an online application. As was described in Sheryl’s post on how to take the hassles out of online banking applications, there are many hassles that can occur when you apply online. One of those hassles can be the signature card. Andera, the company the provides online application software for many banks and credit unions, has an interesting blog post asking why do signature cards still exist?

As described in the Andera blog post, many banks and credit unions still require customers to print and sign an application and mail it in. Not only does this make the application process more of a hassle, it also slows things down. When I apply online, I always prefer an all-online process.

The Andera blog post suggests two reasons why so many banks and credit unions are still requiring paper signatures from their customers. One is inertia. It can take time for an institution to change. The second reason is fear of violating banking regulations:

The regulations concerning signatures, particularly for data-intensive processes such as deposit and loan applications, are difficult to understand, and it's easier to interpret conservatively than risk violation.

The Andera blog post describes how the Andera application software ensures that several regulations are met such as ID verification. However, this isn’t enough for many of Andera’s bank clients. According to the blog post:

Around half of our clients use our default options exclusively. The other half requires applicants to print and sign or to fill out a signature card and mail it into the bank or credit union. We've noticed that institutions more engaged with the online channel and more empowered to confront the naysaying compliance and risk departments, are more likely to do away with the signature card.

Perhaps when we experience an online application that still requires us to print and mail in an application or signature card, we should email the bank and remind them that their competitors allow us to apply without the hassles of printing and mailing. That may encourage them to challenge their compliance department and to focus on improving the customer experience.

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  |     |   Comment #1
I wouldn't be "too" concerned with the instution's policy, but more with what is the Regualtions and Laws concerning on-line signature cards.

Perhaps, a Lawyer can add comments as to the legal implementations of on-line signature cards?
  |     |   Comment #2
For years now, I have opened bank accounts and credit union accounts online -- and been able to handle the signature card by signing it, scanning it in, and faxing it to them. I have found that most, but not all, finaincial institutions will accept a faxed signature (I have even used it when required to present CD closure instructions in writing). So, that allows me to get it done immediately rather than wait for the mail. 

That's all the technology required: faxing ability which I do via my computer as I don't even have a fax machine. However, faxing required a landline phone -- and that is one reason to reconsider the value of a landline. You also can fax from online services, some are free, some charge -- but online will not be so secure as faxing over a landline phone line. 

Until about a year ago, I could not find any that wold allow me to e-mail it over. However, as of a year ago, I have fond that some are enow starting to allow you to e-mail over signature cards, and often they will make available a secure e-mail system to do so. The secure e-mail system I have found a couple of them using is called Zix Mail, and the bank or CU sets that up, send you an e-mail, and you use the link in there to go to ZixMail and e-mail from there. I note, I have found you have to ask about this e-mailing, no one has volunteered the info -- it seems they are not used to it yet and just don't even think of it. In fact some know they have it but hadn't even used it yet, were finding out how to do it. 
  |     |   Comment #3
To me1004 - #2,
You are over complicating the issue about the signature.
Once you open the account, most banks and CU give you 30 days to mail in the signature card, so once you open the account online and get the banking set up, just e-mail from the online session (when logged into your account) as an attachment for your signature, that is it.
I have done it since 1999 on all of my accounts opened online without any problems or questions.
  |     |   Comment #4
Anon #3, I disagree.  I too prefer an all-online process, but unfortunately there is no consistency on this issue among institutions.    Some can wait for 30 days for the signature card, others require it to be in their hands before they will even open the account.    

  |     |   Comment #5
I like signature cards.  It can later be used in fraud prevention and authentication.
  |     |   Comment #6
If it is a checking account with checks, I always assumed that the banks/credit unions needed to have the signature on file to be able to verify it on the checks?
  |     |   Comment #7
To #6:  No bank verifies check signatures any more.
  |     |   Comment #14
That is incorrect. If the check is a certain dollar amount some smaller banks do still check.
  |     |   Comment #15
They better be right...at least for all my checks! Or, write me a check!
  |     |   Comment #8
Wrong on comment #7.  I have actually had an online bank hold up on me closing my account (they quickly lowered thier teaser interest rate) because they said my signature on the check did not match what they had on file.  I had to go through a huge hassle sending my license and ss card to prove it was me.  They had money for an extra two weeks....
  |     |   Comment #9
#8 - that is interesting. I'm curious: was it a relatively large check that closed out your account, or a run-of-the mill amount? Just wondering if the risk controls are more likley to kick in on larger checks.
  |     |   Comment #10
Most banks do not check the signsture on amounts less then $100.
  |     |   Comment #11
Anon #3: I agree that if the option is available with the online application to attach the signed signature card, of course, do it that way. But over the years, I have found only maybe one or two that provided for such attachments. Also, as Pearlbrown noted, they don't all even provide 30 days to get the signature card mailed in, and some won't even open the account until they have the signature card. And, I have yet to see any that will allow any kind of transaction until after they get the signature card -- so your initial deposit is locked up until they get that. But as I was saying, you can do it immediately with most banks because most banks, but not all, seem to accept it by fax, and some are now accepting it via e-mail if you ask into that. These are just another option and consideration if people prefer them.
  |     |   Comment #12
Not requiring signatures makes identify theft that much easier.  All someone has to do is get hold of your SS# and another form of ID.  If there is no requirement that they mail a signature card or come to a branch to sign, then they are free to do what they want in an account your name.
  |     |   Comment #13
Not requiring signatures makes identify theft that much easier.  All someone has to do is get hold of your SS# and another form of ID.  If there is no requirement that they mail a signature card or come to a branch to sign, then they are free to do what they want in an account your name.
  |     |   Comment #16
Parents recently passed away and stepson claimed he was on the checking account, when our parents died last year he cashed out the account worth around 70K it was supposed to go into the estate. How do find a signature card to see if he was indeed on the account?
  |     |   Comment #17
The stepson may have been listed as a beneficiary of the checking account in which case a signature card was not required AND he would have inherited the balance in the account without going through probate. It would not have become part of your parents estate.

The bank should be able to provide you with details, however, I have found some of them to be uncooperative even with direct relatives without getting a dreaded lawyer involved.
  |     |   Comment #18
And, some bank statements list who the beneficiaries are...look at them. The year end tax statements may have some interesting listings, too.
  |     |   Comment #19
Thanks for the interesting info!
  |     |   Comment #20
why do i need to dign a signature card. when idid it yesrs ago?
  |     |   Comment #21
If we do a all online account opening how would they be able to verify and authenticate the checks?

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