Invisible ink, which is invisible to the naked eye until activated by something such as heat or ultraviolet light, is believed to have existed since as early as the 4th century BC, allowing for messages to be sent in a protected manner. The first formal recipe recorded for invisible ink was created by Giovanni Battista della Porta in the 15th century, but there have been countless types of ink created in the years since, used by everyone from George Washington to professional spies. In today’s digital world, the need for invisible ink as a security measure has been replaced by more sophisticated measures such as encryption. Financial institutions and businesses face the challenge that, with cursive writing now optional in many schools, this historic form of communication has become almost unreadable to many younger people — like invisible ink. This shift has led to unintended consequences. Blurring the Lines Financial institutions have relied on cursive signatures as a unique security measure for verifying identity. Handwriting analysts could detect discrepancies based on subtle details like pen angle and the style of loops and tails. However, this safeguard is becoming less effective as cursive proficiency declines.In 2010, widespread adoption of an educational curriculum known as Common Core changed the cursive education game. Faced with a finite number of hours in a school year and the growing importance of teaching students about technology, cursive writing became an optional part of school curriculums, and 45 of the 46 states that adopted Common Core chose to eliminate it to devote resources to subjects such as math and information technology. The result is a generation of young adults — specifically a large portion of Gen Z — who have limited or no ability to read and write in cursive. As educators have woken to the consequences of generations unable to read thousands of years’ worth of documents and communications, combined with studies showing a link between the ability to master cursive writing and strong academic performance, the pendulum has begun to swing back and 23 states have now mandated that cursive again be taught in schools. Nonetheless, financial institutions and other businesses that rely on signed documents are left grappling with the large number of individuals who never learned to read or write in cursive. Unintended ConsequencesAbsent the continuity that comes with ongoing cursive instruction in grade school, many young adults have inconsistent signatures or a total inability to sign their names in cursive. This lack of consistency has made it more difficult for financial institutions to rely on signature verification as a method for confirming people’s identities, particularly since many financial institutions now rely on automated software programs that look for enhanced precision in signature replication. The issue extends to government forms as well, such as in the recent presidential election where signature inconsistencies led to the invalidation of votes. In Nevada, mail-in ballots for more than 13K were rejected because the signatures on them were different than those on the driver’s licenses of the people who submitted them, a large portion of whom were Gen Z. Yet the onus remains on financial institutions, as there is no law requiring people to use cursive signatures. In fact, the laws of several states — many of which date back hundreds of years to a time when demographic differences kept portions of the country from being educated — recognize a mark as simple as an X as a legal signature representing proof of identity and intent. Added to that is the fact that the U.S. Electronic Signatures in Global and National Commerce Act (ESIGN) made electronic signatures legal throughout the US beginning in 2000.Changing with the Tide In order for community financial institutions (CFIs) to do business with the generations that did not learn cursive, it stands to reason that adapting to these wide-ranging signature capabilities for identity verification is the best path forward. The following are some guidelines that CFIs can use to identify what are acceptable, legal signatures to help account for and accommodate customers who do not know how to sign their name in cursive or have other challenges that prevent them from doing so.
- Printed and illegible signatures. There are no laws stating that a signature even has to be legible. As more signatures are printed or become scrawls or illegible flourishes, it’s important to note that these are legally acceptable signatures as well. What is important is the consistency of the signature. Signature verification is improving through the use of AI and machine learning (ML) tools that can analyze signature patterns and even adjust as someone’s handwriting style changes over time. These tools can even detect possible fraud through a difference in the pressure applied by the pen and the signature’s shape.
- Symbols. If someone has a challenge that only allows them to sign with an X or a simple marking or symbol, that is legal, too — although not advised due to the greater difficulty in identity verification. It may be necessary to have that individual sign official documents in the presence of a witness or a notary.
- Electronic signatures. These signatures can be anything from drawing a signature with a mouse or trackpad, scanning a handwritten signature, or simply typing the name. Identity verification can come in the form of verifying through email, a PIN sent to the customer’s mobile phone or password-protected forms.
- Digital signatures. Electronic forms can take a step further with security and identity verification through the use of digital signatures, which generate a private key when a customer electronically signs a form that encrypts the data and even notes when the document was signed.
Differing levels of comprehension and mastery of cursive writing among younger generations have made it necessary for CFIs to revisit what types of signatures they accept and the ways they can handle signature verification. Artificial intelligence and machine learning can assist with such challenges, but CFIs should ensure that employees are educated about these issues as well.
