Authorised signatory management trends for 2023
How are organisations managing authorised signatories in 2023? In this report, we present the results of a series of polls conducted in the Governance, Risk and Compliance Management (GRC) group on LinkedIn to gauge industry sentiment on the issue.
As companies adapt to growing digitalisation and evolving regulatory requirements, the efficient management of authorised signatories and delegated authorities has become more critical than ever. Failure to identify who has the right to sign what at any given time exposes organisations to significant risks, such as delayed or failed business transactions, non-compliance and financial scrutiny, signatory fraud, and director liability.
Despite the importance of Authorised Signatory Management (ASM), most organisations still rely heavily on manual and paper-based processes, resulting in a significant administrative burden for functions like the company secretary and corporate treasury.
Who is responsible for authorised signatory management?
In 60% of companies, authorised signatory management is owned by the Company Secretariate and Legal Departments, while in 20% it is managed by Compliance.
Following regulators’ increased focus in recent years on strengthening governance and internal controls with mandates like the US Sarbanes-Oxley (SOX) regulation and the FRC’s pending UK version of it, and Hong Kong’s bank SFC accounts regime, ASM is gradually becoming a compliance issue too.
How often should authorised signatory data be updated?
There is no uniform opinion about how often Authorised Signatory Lists (ASLs) should be updated amongst Governance, Risk, and Compliance officers. About 40% of them believe that they should be updated quarterly, while the rest think that ASLs should be updated either on an annual or ad-hoc basis.
The frequency of updates usually depends on factors like the size of the company, the complexity of its operations, and the regulatory environment in which it operates. As mentioned earlier, failure to keep signatory data up-to-date carries a significant risk of financial fraud and reputational damage.
By standardising the process and adopting a single, fit-for-purpose digital ASM solution like Cygnetise, organisations can eliminate that risk and bring additional benefits like increased efficiency, security and cost savings.
What are the major challenges of managing authorised signatories?
For the majority of companies (70%), maintaining signatory data up to date is the biggest challenge of managing ASLs. This is consistent with the results of our 2022 Governance market study, which found that speed, efficiency and automation were the most cited ways to improve the current signatory management process within organisations.
About 20% consider the lack of an audit trail as a major issue of their existing systems and processes. Cygnetise’s ASM application utilises blockchain technology to maintain a historical and real-time record of all signatory data changes which creates an immutable, accessible audit trail. To provide even greater assurance, it also allows users to recreate signatory lists from any point in time in the past.
Key trends and best practices in authorised signatory management for companies in 2023
Based on the results of our market research, we’ve derived 4 key trends and best practices in ASM for companies to consider in 2023.
Greater transparency & enhanced governance
As stakeholders demand greater transparency and enhanced governance from companies, authorised signatory management processes will need to become more transparent too. This will include clear documentation, valid and accessible records, and greater disclosure of decision-making processes.
To ensure transparency and maintain good governance practices, companies should provide access to their authorised signatory lists to all relevant stakeholders, such as board members, auditors, and regulators. They should also document all authorisations and approvals, and provide clear explanations of the reasoning behind each decision.
Emphasis on compliance
Regulatory compliance is becoming increasingly complex, and companies are struggling to keep up with the changes. In 2023, we can expect companies to place even greater emphasis on authorised signatory management compliance.
To remain compliant, companies should have an effective ASM system in place. They should also implement adequate controls that ensure that all authorisations are properly documented and that they adhere to relevant regulations and internal policies.
Advanced security measures
As cyber-attacks continue to increase in frequency and sophistication, organisations will need to implement enhanced security measures and practices to protect their authorised signatory data. These include applying multi-factor authentication, encrypted communications, and other security protocols and access controls that limit who can view or modify the data at any time. They should also regularly review their data records to ensure that they remain up-to-date and that the correct personnel and counterparts have access to the appropriate information.
Automation and AI
Automation and AI are becoming increasingly prevalent in business operations, and authorised signatory management is no exception. In 2023, we can expect to see more companies adopt automation and AI technologies to streamline their workflows and authorised signatory management processes.
Cygnetise is a digital ASM application that solves the pain of managing authorised signatories and delegated authorities, making it secure and efficient. Our technology enables users to update their signatory data in real time and has a variety of sharing mechanisms so that the counterpart can always have access to the most up-to-date information without companies having to recompile and redistribute. Organisations can save over 90% of their admin costs and time, and reduce the use of paper, whilst mitigating the risk of fraud and enhancing their internal governance.