Here is the overview of Q&As from our recently held webinar "IIROC endorses e-signatures: What this means for your retail business?".
Q: Have the dealer’s back offices approved the use of e-signatures?
- I know many advisors that have to send subscription agreements over to the back office as well, and sometimes the back office will stamp it and sent over to the manager. The completed document that the advisor would get in the end is still the same document, it just now it has an e-signature and we haven’t had any issues with e-signatures being approved by the back offices at this point. - CS
- For one client, we were actually asked to put that component into the workflow. So instead of the stamp, we only had an extra step in the workflow where once the advisor approves document it goes to the dealer to effectively just visually say “we’re ok with this”, and then flow back to the manager to get the completed doc. - LR
- I can’t say for sure that some of those dealers mentioned come out and explicitly said “it’s ok”. However, for the dealers that utilize this, there has not been any pushbacks. There was a little before the IIROC announcement came out, but since then, there haven’t been any issues I’ve been aware of. It’s a fact that from the compliance perspective, assuming that they’re ok with the e-signature, actually creates a better resource for them, where they can more efficiently access the documents and have, I guess the additional layer of resource for the compliance to see electronically who have executed the agreements are compared it to their own internal databases. So, I see checking a lot of boxes for clients. - FM
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And there’s also the report we‘re running through some exemptions. They care about seeing which clients were signed under which exemptions and that’s a huge benefit for them when they have the digital representation of the subscription agreement, so they don’t have to read through them and keep notes on which products they put people in and what exemptions will they use. So, the short answer is that we’re not sure if there’s an explicit OK but we know that there’s no callback from the dealers yet and with the regulation going in favour of the e-signatures we believe that the explicit decision will come. - LR
Q: From your experience, how do you ensure it is the client who is providing instructions?
- If you’re talking about the KYC elements, there’s not really a way to get around the identification and verification process that we’re obligated to do as part of our regulatory obligations, but in terms of signatures, I would argue that the future is DocuSign and some of these other platforms Lazar has touched on. I would almost argue that there’s no way you can find out who actually signed the doc more thoroughly than someone that just forged the signature in traditional means. So, I think this e-signature that is created is a pretty good trail of who actually executed it, what device is executed on, when they executed it and so forth. - FM
- From a technical point of view, we have gone through a lot of iterations trying to find the better ways to improve the process. I would also agree that it is arguably easier for you to forge a signature than to do so with an electronic identity. But also, to the complement of passports, yes, you’re still in touch with your investors - when you’re doing KYC, you still have to get to know your client, see the document, use the same data room alongside the subscription doc and KYC, but at the end of the day that point of identification is not entirely handled by e-signatures. The point of the sale however is. - LR
Q: Can investor have tokenized KYC on the blockchains that our dealers could extract from and give the approval for every transaction? Is it feasible for the future?
- That’s actually where we see the market is going. The blockchain is optional because it’s a scary word for many people, we don’t believe it will be a scary word for much longer, especially now that we have Microsoft Azzure blockchain which is naturally not as scary as some distributed blockchains by large institutions. We believe that that tokenized identity is the eventual ending point for this type of a subscription process and that we as a firm are investing now to be in place to get ready, or be ready when that time comes, which I don’t believe is far away from today. - LR
Q: Can you keep accurate KYC data in your CRM and extract that metadata in the individual sub doc where the clients have a much better subscription experience over the period of time?
- This is a question about the re-usability of data, and this is something that we put a lot of effort into. When we talked about the KYC passport for the client, it’s essentially every single field document from every document that is stored on a level lower in our CRM and the level lower than to subscription agreement. And when the subscription agreement has been loaded into the system, what we do is we bridge fields that appear in the agreement with fields that we have in our KYC passport for that investment, so if you sign up one subscription agreement last year and you’re signing up completely different format but 90% of the fields are the same, then by default those 90% of the fields will be pre-populated for the investor and they will just be augmented for this 10% that are left blank. So, re-usability. The second part is that we also understand when an investor changes something in investor agreement, let’s say their passport expiry, we’re able to let you update that your CRM automatically, so you lose that friction between what the client is telling you about themselves and what you know about them. - LR
Q: What about integrating into Hubspot?
- The way we see the platform works, with the respect to how we set it up to work with DocuSign, it should be agnostic to other systems that people are using for CRM. We obviously have tide integration with Obsidian CRM, but the concept is if you need information in Hubspot that comes from sub agreements, we are able to take APIs and forge them into Hubspot so that the information is there. Simple example – people have to put their birthday into the agreements and if it’s free and it doesn’t cost you anything to automatically keep your CRM up to date and remind you of the birthdays, then it’ll make you a better relationship manager and it won’t cost you anything. - LR
Q: How do you maintain KYC data up to date?
- Exactly what you saw in the subscription agreement with the link to DocuSign, we actually do the same thing for KYC. If you’re doing the direct subscription agreement a lot of the data is shared across the KYC document. Once the KYC document is completed it goes for the e-signature, and the investor can go and update whatever is wrong or missing. Finally, what we do which is pretty useful from a KYC perspective is that we link fields directly from a KYC agreement into a notification engine so that if somebody’s passport is expiring, you’ll receive a notification a week in advance if you configure it properly. When the KYC is coming due, the system will notify you that there are other KYCs that are about to expire so if you’re fond of doing KYC ad hoc it’s very useful, but if you do it annually than you’re mainly benefiting from just pre-populating all the KYC forms and getting the investors to sign them and approve them. - LR
Q: What about changes in KYC data during a 12 months period?
- What we do on our end for the investor portal suite is that investors can log in and trigger the document in any time they like, and it’s much same to requesting a switch or requesting a new subscription, so they are able to trigger the KYC document. However, you won’t necessarily know that the change is coming in, but you will be notified when it does come in. So when the investor logs in to create something then you will be notified they have done so and it will get injected in KYC doc. Naturally, everything has to be tracked, so you have to know who is doing that and that’s built into our system from our CRM integration. - LR
