How secure is your bank signature card?

MANILA, Philippines—The leakage of Renato Corona’s bank accounts brings to light a fundamental query on signature cards. Following are a few factors to consider.

A depositor opened a savings account at a leading bank in the country and was appalled to discover that the new accounts staff left the signature cards on top of a side table for the whole world to see. She called the banker’s attention to the private information lapse but was greeted with what seemed like nonchalance, possibly due to the volume of work the staff needed to finish that day or simply the lack of an established system in managing customer documents.

This happened many years ago. But the question remains—how secure is the information on your signature card?

Past practices

Some decades back when banking laws were less stringent and bank-customer interface was more personal, one could easily obtain blank signature cards and take them out of the bank premises (this is no longer allowed). There were also people who were less careful and would even sign the cards in blank (meaning the required signatures are affixed then the other information filled up later by other people).

Upon the bank’s approval, signature cards would then be entrusted to a custodian in charge of verifying signatures at each transaction. Thus, withdrawals were often limited to the branch where you opened the account since the signature had to be verified by the designated officer. The officer would stamp and sign beside the approved signature.

Should a customer find himself in another branch requesting for a withdrawal of funds, he would likely follow a tedious process of submitting a withdrawal request or form that is then faxed to his official branch for signature verification. It may take a while before the other branch would fax back a reply or approval.

Despite the slow procedure, it is worthy of note that possession of the signature cards remained only at the branch where the account was opened. As a precaution, it is also possible that a back-up file could be stored at another specific location.

Current scenario

The advent of computerization and the Internet changed the way banks conduct business. Foreign banks were among the first to embrace technological advancement and local banks followed suit.

Nowadays, a customer can conduct banking transactions almost anywhere in the world. Automated teller machines also provided much convenience to the general public.

But the computerization of banks has also altered the way signature cards (or the information contained therein) are handled. Gone are the days when its contents were purely limited to one person or one branch.

It is quite possible that your bank has already encoded your signatures on a computer, where access is given to the frontline personnel who will transact your withdrawal. For example, if you happen to be at a mall and decide to get some money over the counter (at a branch where you did not open an account), the teller would have no way of proceeding with the transaction unless he could verify your identity and signatures. He simply looks for your account information online to get the necessary data. From an information security standpoint, this means that more people are now privy to your signature data. The process is repeated when you visit another branch.

Future direction

For the protection of bank clients, there may be a need to control the exposure of signature cards or its pertinent contents. Perhaps it may be worth it to consider a more limited approach to signature verification or other creative solution. Centralization would make it easier to pinpoint accountability on signature cards.

Overall, clients need to feel protected when they entrust personal information to their banks. Without such assurance, it would be difficult to grow a relationship that is really based on trust.

(The author has worked for a number of local and international banks in the country. Her postgraduate thesis analyzed the feasibility of setting up trust operations for a foreign commercial bank in the Philippines. Her latest book, “Rich Life: Creating Meaningful Wealth” is now available at National Bookstore.)