The Evolution of Remote Online Notarization (RON) has been a game-changer, particularly in the real estate and title industries. To understand the significance of this transformation, it’s essential to delve into the history of notary services. The role hasn’t changed – it is still to prevent fraud during critical transactions. Technology, however, can improve the efficiency of verifying the identities of parties involved in legal documents. This approach can add an extra layer of security and authenticity to transactions.
READ THIS EBOOK: What is the Future of Remote Online Notarization?
Challenges
Over the past 18 months in the United States, the RON trend has experienced significant growth. The ability to notarize documents remotely using secure online platforms has provided convenience and flexibility. This is especially the case during times when physical presence may not be feasible or safe. RON can not only streamline the notarization process, but it can open new possibilities for the industry.
Here is a list of documents that can be considered for remote online notarization:
- Property Deeds
- Contracts
- Wills
- Powers of attorney
- Affidavits
- Beneficiary designations
- Medical directives
The benefits of RON are evident, with reduced turnaround times, cost savings, and increased accessibility for individuals who may be geographically distant from traditional notary services. However, challenges do exist, including concerns about the security of online transactions and the need for robust regulatory frameworks to ensure the validity of remotely notarized documents.
How Widespread is Remote Online Notarization?
In the United States, according to OneNotary, RON has been implemented in 26 states. Other states passed emergency legislation to allow it during the coronavirus pandemic. In March 2020, the U.S. Senate introduced the Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020 (the “SECURE Notarization Act”) to authorize and establish minimum standards for electronic and remote notarizations that affect interstate business transactions (source).
On February 27, 2023, the SECURE Notarization Act of 2023 was passed by the House of Representatives (source). There is still work to be done before RON becomes a United States standard, with individual states now taking the lead on where it can be enforced. It is reasonable to assume – based on how trends have evolved in the past – that RON will eventually get passed and ultimately become the new standard.
Taking a look beyond the United States, other countries have varying levels of adoption of RON. The United States has been at the forefront, but other nations are also exploring and implementing similar technologies to modernize notary services. Other countries supporting RON now include the United Kingdom, Canada, Australia, and a few European countries (source).
Of course, it’s important to note that the specific regulations and requirements for remote notarization will vary from country to country. It’s always advisable to consult with a legal professional or local authority to ensure compliance with the applicable laws and regulations in the relevant jurisdiction.
Remote Online Notarization is a great example of industry innovation. Other examples of industry disruption can come in the form of technology and business innovation. Read this article to learn more, “State of the Market: Is Now a Time of Disruption for the Title Industry?”
Regulatory Impact
Regulatory changes will be crucial for widespread RON adoption. Striking the right balance between innovation and security is paramount. Clear guidelines on electronic signatures, identity verification, and data protection are essential for fostering trust in online notarization. Note that this situation gets more challenging on how to regulate if participants are located both inside and outside of the United States.
The underlying requirements haven’t changed. The role of a notary is to ensure the people engaged in a contractual or legal transaction are who they say they are. It is likely some sort of video support technology will be required with RON to ensure a participant’s identity can be accurately validated.
Alternatives to RON
In the dynamic landscape of Remote Online Notarization (RON), several competing options have emerged, each vying for prominence in reshaping how transactions are notarized. While it’s challenging to predict a single prevailing option, analyzing a few notable alternatives sheds light on the evolving nature of the RON market.
One of the prominent players in the RON space is DocuSign Notary. DocuSign, a well-established electronic signature platform, expanded its services to include online notarization. The platform offers a user-friendly interface, robust security measures, and complies with various regulatory requirements. Users can initiate notarizations remotely, and notaries can perform their duties online, ensuring a seamless and efficient process.
Another noteworthy option is Notarize, comprising a dedicated platform designed specifically for remote notarizations. Notarize employs a combination of live video sessions and identity verification technologies to facilitate secure online notarizations. The platform is tailored to the real estate industry, providing a comprehensive solution for document notarization in property transactions.
The likelihood of these alternative options gaining traction depends on various factors, including user experience, regulatory compliance, and industry partnerships. DocuSign’s widespread adoption of electronic signatures provides it with a substantial user base, making it a formidable contender. Notaries, on the other hand, focus exclusively on notarization services, offering a specialized solution that appeals to specific use cases.
The prevailing option in the RON market is likely to be influenced by factors such as regulatory acceptance, ease of integration with existing systems, and overall market trust. Industry collaboration and partnerships can play a pivotal role in determining the success of a particular RON solution. For instance, partnerships with title companies, real estate agencies, and financial institutions can significantly boost the adoption of a specific RON platform.
The Need for Modern Systems Agility & Interoperability
The competitive landscape in the RON market is evolving. It’s conceivable that multiple platforms may coexist that cater to different segments of the market. As the industry matures, standards and best practices will likely emerge, contributing to a more uniform and interoperable RON ecosystem.
Ultimately, the prevailing RON option will be the one that strikes the right balance between innovation, security, and regulatory compliance. It should seamlessly integrate with existing workflows, instill trust in users, and adapt to the evolving technological landscape. Competition in the RON space is healthy. It can foster innovation and push providers to continually enhance their offerings, ultimately benefiting consumers and industries alike.
Given the uncertainty on how the future of the Remote Online Notarization market will evolve, one thing is certain. Be prepared to change! Often these types of technological disruptions have a far wider scope of impact than previously considered. For example, if real estate buyers embrace RON with passion, then this desire will spread to other parts of real estate and other contractual transactions. For example, title search processes may also be expected to be conducted remotely and faster, given the efficiency gains of new technological advances.
Future Investment & Potential Benefits
Real estate and title companies have a unique opportunity to leverage RON for enhanced efficiency and cost savings. However, embracing this transformation requires significant investments in IT systems. To achieve 100% adoption, companies need to invest in user-friendly interfaces, robust security measures, and scalable infrastructure to accommodate the growing demand for online notarization.
The transformation brought about by RON also emphasizes the importance of adaptable IT systems. As technology evolves, companies must ensure that their systems can easily incorporate new advancements. Having a trusted advisor as a systems integrator partner becomes crucial during these times of technological transformation. This partnership can guide companies in making informed decisions, implementing updates seamlessly, and staying ahead in a rapidly changing landscape.
The evolution of Remote Online Notarization (RON) presents immense opportunities for the real estate and title industry. While challenges and regulatory considerations exist, the benefits of increased efficiency, cost savings, and improved customer experiences make RON a transformative force. The key lies in strategic investments, regulatory compliance, and a forward-looking approach to technology integration, with a trusted advisor to navigate the complex landscape of technological evolution.