Electronic Signature Guide for Fintech: How to Comply with Consumer Credit Law Without Losing Customers

The Impossible Balance: Conversion vs. Compliance

In consumer credit and Fintech (lending), the tension is constant. Marketing needs the customer to take out the loan in three clicks from their mobile (“Money in your account in 5 minutes”). Compliance reminds everyone that consumer credit legislation imposes strict transparency and pre-contractual information requirements.

If you lean too far towards speed (a simple “I have read” checkbox), you risk mass contractual invalidity in court for lack of transparency. If you overdo security (requiring digital certificates or long processes), drop-off rates soar.

Choosing the right electronic signature platform is the only way to resolve this tension. For a Fintech, the tool must not only capture a signature; it must orchestrate a watertight legal sequence. Below are the 4 keys to protecting your loan book without slowing acquisition.

1. The Pre-Contractual Information Trap: Signature vs. Delivery

The biggest legal risk today is not the customer denying their signature but denying that they received the mandatory information (pre-contractual information / SECCI) in good time to make an informed decision. Courts are voiding interest and contracts because the lender cannot prove that this documentation was actually delivered.

The solution: Certifying the application
It is not enough for the customer to sign the contract. You need a platform that combines two technologies in one flow:

1. Certified Email (delivery): Send the pre-contractual information and general terms by certified email before or during the process. This creates proof of “making available” on a durable medium, regardless of whether the customer signs or not.
2. Electronic Signature (consent): Once delivery is proven, the contract is signed.

The result: In a dispute, you have two pieces of evidence: “Here is proof that I gave them the transparent information (delivery Audit Trail)” and “Here is their acceptance (signature Audit Trail)”.

2. Security Without Friction: Advanced Signature with OTP

Asking a microcredit applicant to have a qualified certificate or go through long video-identification to sign the contract sharply reduces conversion.

The market standard:
Advanced Electronic Signature with OTP (SMS) is the right balance.

• User experience: The customer accepts the terms on their mobile and receives an SMS with a one-time PIN.
• Legal validity: Entering the PIN links the signer’s identity (their verified mobile number) to the document. It is strong proof of authorship, far more solid than a simple click, and takes seconds.

3. Full Automation: “API-First”

In Fintech, there is no human step in loan origination. The risk engine (scoring) approves the deal and the contract must be generated and sent in milliseconds.

The technical criterion:
You need a robust signature API that fits natively into your onboarding flow.

• Scalability: The API must handle peaks of thousands of requests (Black Friday, sales) without latency.
• Webhooks: The system must notify your core banking system in real time when the contract is signed so funds can be released automatically. If the API needs manual review, it is not Fintech-ready.

4. SEPA Mandate and Future Recovery

The loan cycle does not end at the signature. Securing collection is just as critical.

The end-to-end approach:
Use the contract signing flow to also sign the SEPA mandate.

• Why: Having the mandate signed digitally cuts bank returns and simplifies handling of defaults.
• Recovery: If the customer does not pay, the platform should let you use the same technology (Certified Email) to send debt recovery notices, creating the proof of “prior payment demand” needed for order-for-payment or court proceedings.

Frequently Asked Questions (FAQs)

Is a checkbox on the website enough to comply with the law?
Usually not for financial contracts. A checkbox does not guarantee the signer’s identity or long-term document integrity (the web content can change). You need a static document (PDF) signed electronically with a timestamp.

Do I need video identification to sign?
Video identification is required for customer onboarding (KYC/anti-money laundering) when you do not know the customer. For signing the contract itself, Advanced Signature with OTP is enough and much faster.

What is the “durable medium” the law requires?
It is a means that allows the customer to store the information and retrieve it unchanged (e.g. a PDF signed electronically and received by email). A simple link to a dynamic web page is not a durable medium because the firm could change the content later. Certified Email meets this requirement.

Is this signature valid for claiming the debt in court?
Yes. The Audit Trail produced by the platform is admissible documentary evidence of the existence of the contract, delivery of terms and the debtor’s acceptance, supporting enforcement proceedings.

Conclusion

In the Fintech ecosystem, the signature platform is the bridge between risk and business. Do not sacrifice conversion by asking the user for impossible technical steps, but do not put the loan book at risk with weak signatures.

The combination of Certified Delivery (for pre-contractual information) + OTP Signature (for the contract), managed via API, is the gold standard for lending online with legal certainty.