OneSpan Inc. (OSPN) Earnings Call Transcript & Summary

Good morning, good afternoon, everyone, and welcome to this webinar about OneSpan digital agreements latest innovation. In the last 6 months, we've been working hard to bring new solutions and new capabilities to the market to help our customers improve their agreement processes in a secure way and also to help them offer the consumer-like experiences their customers expect in every single aspect of their lives, including filling forms, signing and notarizing documents. In the next hour, we're going to cover the following. We'll first have a look at the evolution of digital agreements in the last few years and where it's heading now, and we'll have a look at how OneSpan is shaping its offering to support customer needs today but also tomorrow. We'll then unveil several product innovations and recent enhancements across our solution portfolio. At the end of the webinar, we'll keep 5 to 10 minutes for any questions you might have. So please feel free to use the Q&A functionality that you can see on the screen to send us any questions you might have throughout the presentation. And with us today, we have a number of presenters joining us from the product management and the product marketing teams at OneSpan. They're all very passionates and all very knowledgeable by the solutions we're going to cover today. So welcome, everyone. So let's start by talking about digital agreements and how they evolved in the last few years. In the last decade, we have seen a rapid adoption of e-signature, and this has been accelerated by the move to remote work and the increasing customer expectations for consumer-like experiences. And today, businesses are looking to take that to the next level by adopting a broader set of agreement technologies beyond just e-signature. And this include anything from guided data capture all the way to document generation and identity verification. As we look forward, new technologies such as GenAI and existing technologies like iPass, integration of the platform will unleash a new generation of agreement experiences that are even more automated, more personalized and even more embedded. We think that this shift will be underpinned by the move away from static PDF agreements to agreements that are based on data model. Imagine an agreement model that defined the element of a contract, for example, the different closes, the pricing information, key metadata such as renewal dates, and imagine if you can query for the relevant information and embedded dynamically in the user journey, or automatically kick off workflows based on this metadata. For example, a metadata about a contract that is about to expire, may trigger an automatic renewal. Increase in new technologies such as computing will also increase threat to encryption and prevalence of deep fakes. As a result, we'll see greater adoption of decentralized technologies underpinned by blockchain. So a lot of rapid changes. And so this is reflected in our portfolio of solutions. It is built on enterprise-grade architecture and an API-first design to meet the strictest compliance and scalability requirements in the world. We are also rapidly adopting AI across our products, our identity product, for example, already use AI for biometric face recognition and document verification. And in addition, our team is looking to infuse GenAI across the entire agreement life cycle to improve both the sender and the signer experience. We are also leveraging emerging technologies such as blockchain to provide long-term evidence of the authenticity of the signed agreements. And this is something we'll cover later in the session today. So today, we're here to talk about innovation, and OneSpan is consistently innovating, enhancing existing products, developing new products to meet the needs of our customers today, but also tomorrow in this constantly evolving environment. And today, in this session, we're going to cover a new integration platform to easily help you connect e-signature to your preferred applications. We'll cover a new smartphones offering to help your customers fill in forms faster than ever. Some enhancements to OneSpan Sign for more flexibility and more security. And finally, a convenient way to notarize important documents remotely with OneSpan Notary. But first, let's start with the new integration platform. And for that, I'm going to invite my colleague, Ralitsa, to join us. Hi, Ralitsa. Maybe before we start, can you share some more insights on current market trends around integration and also some challenges that businesses face when it comes to integration.

Hello everyone, who is watching us today. In 2023, businesses were using an average of 342 SaaS applications. Yes, you heard it right. This is a surprisingly high number of applications, isn't it? Now let's think what a significant challenge is to manage such an extensive technology ecosystem. Too many applications bring another program and poise to go to work efficiently as they navigate between numerous applications. Consequently, organizations are now focused on consolidation strategies, preferring integrated solutions over stand-alone applications to simplify the technology stack and also to reduce costs. Another key trend that we see is the shift away from traditional custom-made integrations. Developing through API and SDK is costly and demand dedicated the development teams. When we talk with customers and prospects, regardless of their size, they say that they want to minimize the development costs. Most of them say that they're interested in adopting extensible integration platforms that support a rapid deployment and require minimal maintenance.

All right. Great. So I imagine the integration platform is the solution. Can you tell us a little bit more about that?

Yes, absolutely. So our new OneSpan Integration platform that went live last week. So kudos to our amazing team for an amazing job, really. So you probably have seen our announcement and publications. But I wanted to take a moment to share some highlights that I think you find interesting. So what is the platform doing? OneSpan Integration platform enables organizations like yours to seamlessly incorporate its inter capabilities within the applications used daily, such as CRM, HR, storage applications, business productivity applications. Unlike traditional industry offerings, OneSpan Integration platform is modern and leverages low-code, no-code approach making it easy to implement e-signatures directly in existing business workflows. So the platform consists of 3 components, as you can see here on the screen, embedded integration is the first part, which allows you to connect to our key partner integrations. Then the second component is workflow integration, the one is on top which is utilizing low-code no-code approach and is allowing you to connect to OneSpan Sign with more than 1,000 possible applications. Later this year, we will also introduce self-service option, which will help you to design your own workflows with our solution. And the last component, we'll be launching bring-your-own-iPass feature, which will enable customers who already use iPass providers to connect seamlessly to OneSpan Sign. Our integration platform will help you to pass the limitations of your current e-signature requirements. We will help you increase the productivity of your employees by servicing use cases across the enterprise to meet specific department needs, for example, HR, procurement, sales. Our platform will remove the need for multiple e-signature solutions. I'm sure the IT departments are cheering right now. With the new workflow integrations, we eliminate the need for time-intensive and complex development. We accelerated the organization, speed of deployment of new use cases, allowing businesses to adapt quickly to changing requirements and market conditions. The pre-tested workforce and building security also will help reducing chances of security cost or other security risks. With a single solution, also the integration point is also only one, which is a part of being very good for security is also reducing the dependencies. Low-code no-code development reduces the need for specialized development skills and minimize the development costs. Next week, Tuesday 25th, put it in your calendar. We are hosting the webinar focused on Microsoft and Google integrations. I would like to invite you to join us for in-depth discussion on the topic. And we are also presenting some very interesting demos. You can find registration link in the chat. I'm going to post it in a moment. So go ahead and register right away. Now I hand over to my colleague, Vidushi. Vidushi, how are you? Would you mind walking us through the Salesforce demo?

Thank you, Ralitsa. I'm doing good, and I'm very excited to take everyone through how they can basically send documents from within sales force in just a few easy steps. So in this example, I am Tony, I'm a salesperson for a bank, and I have a sales opportunity for a customer, Michael. So I basically go into sales force. I choose my account, customer account, which is my code and I create the opportunity entering all the relevant details. These details can be different for all of you according to your business process, so you can continue entering information as per your process. Once the opportunity is created, I then move to the next step of uploading my documents. These are basically the documents that will be sent for signing to my customer contact. All these documents that I'll be uploading are basically pre-tagged using the OneSpan Sign Text Tags functionality. Now that the documents are also uploaded, I then move to entering the contact to whom these documents will be sent. I searched for my contact. I assign the right role and then I save. So now that I have the documents and the signers defined. I'm ready to move my opportunity to the next stage, which basically triggers the OneSpan Sign transaction. The signers receive an email notification prompting them to sign the documents. The signers basically access the transaction. They may or might not see a disclosure document based on the configuration on your account. We can review all the documents, complete all the required signature fields or other text fields. And once all the signatures are captured, our transaction is completed. Now all the documents associated with this transaction are automatically attached back to sales force. This automatic document management eliminates the need of any manual uploading, any errors and securely attaches all the documents. Not only do you see the actual document that was signed, you also see the disclosure documents which was accepted by the signers. In addition to these 2 documents, you will also see the evident summary that captures all the actions taken by the signer on this transaction. And with that, I'll hand it over to Steph, who will take you through more innovations in our digital agreement portfolio.

Thanks, Vidushi and thanks, Ralitsa for this overview of our new integration platform. So moving on to the next innovation. We're now going to talk about Smart Forms and for this, I'm going to hand over to Brett.

Sure. Thanks, Stephanie. So OneSpan Smart Forms addresses the issues we have all experienced with PDF forms. Static PDF forms are complex, hard to use and impossible to make it accessible and easy for mobile or tablet completion. In addition, they offer limited field validation and reduced data accuracy while increasing abandonment. The Smart Forms product has been designed to transform existing static PDFs into a modern digital web form which adapts questions and requirements and workflows based on the information provided by users.

So I believe now we're going to see -- you're going to take us through some -- a bit of a demo, right? We're going to see the product? Let's do it.

So we have a love-hate relationship with the traditional static PDF. The PDF form is a great way to store data and information captured. However, it creates a lot of angst amongst users when entering that information. The forms are complex, long and require a mixture of scrolling, squinting and panning to read and understand. The fields are easy to skip, miss or enter inaccurate or auto-corrected data. Field validation is minimum, if there is any, and provides no security for users entering information in a public setting. Now we're going to see the alternative. Peter is entering his contact information into a very simple web form, digitally collecting relevant details and then storing it within sales force, email address, phone number so that we can contact him in the future for this process. So we can envision he's enrolling in a bank account or applying for a loan. And once he clicks next, that's going to go into the employee side of this. Now we're viewing this from the employee point of view. The employee is sending a smart form to their customer, leveraging built-in integrations. The customer information is being retrieved from sales force, including the name, e-mail and the information required for the document signing provided in the previous step as well as additional information that's going to be collected through a digital form. In this case, the customer receives an e-mail clicking the link to access a secure, simple and easy to read and understand digital form. Forms include field validation, mathematics and calculations, which can be performed in real time on the data provided by the user. Ensuring data capture, accuracy and an accessible and pleasant user experience. Accessible on tablets, phones and laptops which adapt to the screen real estate provided and allows the user the ability to resume complex transactions across different devices, ensuring the success of digital workflows. Form data can be collected and brought into CRM and CLM platforms or other internal business applications for storage, including integrations into sales force, SharePoint, and OneSpan Sign native integrations as well as rest API-based services. Now you're seeing the user go through the signing process where the information acquired from that digital form has been transposed and brought into a PDF form so that they can easily, easily validate that information's accuracy and now they can sign the document with ease without having to scroll around entered information and potentially entered the wrong information into the wrong place. How the user is using our click-to-sign technology and then confirming the transaction is complete. Thank you. That's it for me, Stephanie.

Great. Thanks, Brett, for this overview of Smart Forms. So moving on to the next innovation. We're going to talk about OneSpan Sign and some of the latest enhancements and capabilities. So I'm sure I imagine a lot of you on the call today are familiar with OneSpan Sign, our core product. And you probably know that we're consistently enhancing existing capabilities, adding new ones to increase flexibility and security. And we also want to make sure that we provide a great experience for the end user as well. So what you're seeing here is a selection of some of the latest enhancements we released. The list of innovations for OneSpan Sign in the last 6 months is much longer than this, but for the purpose of the session, we've had to make a selection. So we're bringing more flexibility. We're making it easier for admins to manage users, to manage setup, permission and languages. White-labeling is a key differentiator of OneSpan, and we made some recent enhancements to help customers easily personalize the logo that appears at the signature level. So personalizing the logo is something that was possible in the past, but not in a self-serve fashion. Customer had to get in touch with OneSpan to do this. So this new configuration improved the experience for admins rights. You can do that yourself, but also really provide a better true white-labeling experience. Another capability I'd like to call out here is the active hyperlinks in signing ceremony. So with this capability, we are adding hyperlinks in documents in the signing session. So what it means is that signers can access different additional information easily just by kicking a link without having to scroll through a lot of different pages. So if you think of an onboarding, you just join a new company or you just join a new bank, you might receive a lot of documents around welcome package, new policies. Again, that's a great use case for this new capability. On the security side, we have a new masked OTP for SMS authentication. And with this new capability, we're basically adding a default mask to import the fields related to OTP. So that's a capability that's great. If the signer is in the public places with a lot of people around, we're really adding extra security and confidentiality here. So I'm now going to hand over to Francisco, who is going to take us through a demo of some of these enhancements. So Francisco, over to you.

Thank you, Stephanie. Hello, everyone. Let's dive into a demo to illustrate some of the new capabilities of OneSpan Sign, more specifically in new mask OTP for authentication, enhanced white-labeling experience with the company logo and hyperlinks. In our scenario, we will sign a professional service agreement. There will be a sender who will initiate a transaction and one signer named Robert Smith, who will review and sign the agreement. Before we start a transaction, let's have a look at the OneSpan Sign account configuration module where you can now upload your company logo visible in the signature. Being able to personalize a logo in an easy way without relying on OneSpan Sign support is new and will enable our customers to offer a true white-labeling experience. This is part of our commitment to increase self-serve functionalities and give you full control over your solution. I am now ready to prepare the transaction using a predefined template I have set up previously to accelerate the creation of recurring agreements. I update the transaction name to include a relevant date and click on create. Our signer, Robert Smith, must authentic before entering the signing session using an OTP code sent to his cellphone. I quickly access the authentication information to ensure its accuracy or make any adjustment if needed. Next, I do a final validation to make sure all documents are properly tagged and I click on send to sign. Robert, our signer, receives an e-mail notification to access the agreement. He clicks on the link, and he is presented with an authentication step where he needs to enter a onetime code sent to his cellphone. Robert enters the code that is now masked by default for more privacy, and he can briefly expose it using the eye icon to make sure he didn't make any mistakes, and he is now able to access the agreement. After reading and agreeing to the consent form, Robert moves to the next document where additional information is presented, including external links. Once been signed, now support external links to allow organizations to provide additional content beyond the documents themselves without having to scroll through a lot of documents and pages. When Robert clicks on one of the links, it prompts inform him that the content will open in a different tab. He can then review the external source and easily return to the signing session. Robert's review and signed the last document and the transaction is now complete. He can review the documents directly during the signing session. And as you can see here, the new logo configuration we mentioned earlier, the signed document showed the organization brand for a true white-label experience. On top of that, he can now access the evidence summary, which provides a complete audit trail of the signing for record keeping. Exposing the evidence summary in the signing session with a strong notification rule will guarantee that only authorized parties can access the document. This is the end of our demo, and I will now hand it back to you, Stephanie.

Thanks, Francisco, for this demo. So I mentioned earlier at the start of this session that we are leveraging emerging technologies such as blockchain to provide long-term evidence of the authenticity of the signed agreements. Well, here is a new capability we are investing in and that is still in beta mode. With this capability, we'll help customers maintain the integrity of document in the long run no matter what happen, no matter what new security threats might happen in the future. So now you might wonder, but why do I need that, right? Isn't my document already protected when using OneSpan Sign. This is right. OneSpan Sign already uses the public key infrastructure PKI to ensure non-repudiation and integrity. But with this blockchain-based time stamping, you're getting an additional measure of document verification, leveraging the blockchain. So this is our capability that is not available right now, but something we're investing in. And if you are interested in knowing more, please feel free to reach out to us after this webinar. So moving on to our next innovation, OneSpan Notary. And for this, I will hand over to Raquel.

Thank you so much, Stephanie, and thank you, everyone, for joining us today. So as Stephanie mentioned, I'm Raquel Lima, I am product manager here at OneSpan. And I'm super excited to speak to you about a product we recently brought to market our OneSpan Notary solution. So OneSpan allows users to digitally notarize documents, no matter if they are in person or fully remote. So let's take a closer look at our solution. We'll start with remote through an authorization also known as RON. So with RON, notaries are able to notarize the document fully remote. Meaning the documents are signed digitally and the participants do so remotely by using audio/video technology. In the past couple of years, we have seen a huge increase in demand for digitizing authorizations. And we are seeing a trend for consumers that are looking mostly for a secure and convenient alternative to traditional notarizations. Our RON solution is an all-in-one solution with all the features that are needed to remotely notarize agreement. OneSpan Notary delivers live electronic signature, of course, in the secure data conferencing room with identity proofing and credential analysis options. It has basically all the tools that are needed to notarize agreements as, for example, the ability for the notary to upload their electronic notary seal and complete the electronic journal, while conducting the session. The session is recorded, of course, and all steps are captured in a comprehensive audit trail that will make it very easy for the notary to tell the story of what happened during that notarization. As we know, remote notarization is a heavy regulated field, and our solution was built to meet specific state requirements in the United States. Currently, our RON solution supports over 30 states. We know that a big part of what a notary needs to do is to verify the signers at entity, right? Traditional e-person notarizations are vulnerable to security threats and fraud. And our solution will mitigate that risk by offering a strong identity proofing options like IDD and KBA. Also, our solution was built with notaries in mind, providing a streamlined experience when connecting and authorizing agreements with customers. So whether you are an admin that is onboarding the notaries to the solution or a notary conducting a session or even a signer that is signing a document, we provide a guided workflow, so it's easy for all parties involved. And finally, we have recently obtained our MISMO certification. This was a big milestone for us, meaning a specific standard set forth by the mortgage industry. This means that with this certification, we provide assurance to our customers that they can prepare an electronically notarized mortgage documents using OneSpan Notary while maintaining full compliance with MISMO standards. Okay. So that was it for RON. So now, we will also talk about IPEN.So as part of our OneSpan Notary solution, we have recently launched our in-person electronic notarization also as IPEN. So this capability was brought in the past quarter. And it offers a hybrid approach for customers that are looking to complete notarizations electronically. So different from RON, where all participants are remote. In an IPEN scenario, the notary and designers, they will still meet face-to-face. However, the documents will be signed electronically. So with IPEN, you can achieve operational efficiencies and cost savings, right? When you digitize a process that is paper-intensive like notarization, you're eliminating the cost of -- well, the [indiscernible], [ Aeroframe ] paper-based processes like scanning, copying, printing and filing. And as well, you're eliminating the cost of paper, right, with paper, toner and ink. So the notary can effectively complete notarizations, including maintaining their electronic journal. So the notary, they don't need to carry that physical journal capturing the events of the electronic notarization when they go meet with the signers because this is all done digitally. With IPEN, you can also accelerate the speed to completion of your notarizations, especially for important or time-sensitive documents like notarizing a power of attorney in a medical emergency or financial matters. Digitizing notarizations will reduce a significant amount of time to complete the process because it's more efficient. Also, IPEN is more secure than the traditional notarization. Traditional notarizations will require the burden of majorly handling a ton of paper and document with IPEN, the notaries can complete the notarizations with a secure e-signature and tamper-proofing technology. And there's another trail as well that will be available that will capture all the events that happened during that IPEN session. And again, as wrong, it will help the notary tell the story of what happened during that notarization. And of course, we like to say that this is the first path for our customers that are looking to digitize their notarization journey. So you can start your journey with IPEN to restart part of your notarization. And then you can move to digitizing [ TN ] a notarization process using a remote notarization as well. IPEN is a nice starting point that gives notaries the opportunity to digitize part of the notarization. So they can get comfortable with it and then upgrade to their technology for remote notarization. So that was it on OneSpan Notary. Thank you so much for listening to us. And now I'll pass it back to the team to cover Q&A.

Thanks, Raquel. So as we said, this is now time for Q&A. So yes, this is the time if you have any questions on any of the innovation we just presented and shared with you today. Feel free to send your questions using the Q&A functionality. So we already have a few questions. So I'm just going to have a look at it. So I think we have a questions around on integration. We have a question around HR platforms. Do you have any example of HR platform and use cases you support with out-of-the-box workflow. I get this is for Vidushi and Ralitsa.

I can maybe start and Vidushi you can be you can maybe add. So indeed, we support the HR platforms. I can give examples with out-of-the-box workforce right now for Workday and for greenhouse. The type of use cases we support, for example, to initiate document signing on a given day and given time to employees that are added in a report. This can be easily done through in Workday. Also system in onboarding new employees or candidates who are going through job interviews in the hiring stage. You can also send for example, NGA at the stage of phone interview or a job offer stage. So there are different workflows that we can trigger and we can facilitate use cases that can help you to handle this type of business needs. I don't know, Vidushi, if you want to add something on this?

No. I think you covered everything.

Great. Another question on notarization. Can the notary and the signer be in different states when doing the remote notarization? Raquel?

Yes, I can take that one, Stephanie. That's a really good question. So generally, yes, the signer can be located outside of the notaries commissioning states. However, they can be anywhere actually in the United States or even abroad. However, the notary needs to be located in the states where they have their commissioned from.

Okay. Thanks, Raquel. OneSpan Sign, probably a question for Francisco here. The evidence proofing is on beta mode, you mentioned, how can I try it?

The blockchain?

Yes.

Yes. So as of now, it's mostly on a demo perspective. So if you really want to know more about it, we'll definitely set up a session with you. We really want to collect information on our processes, on the experience. And I want to get to know more how will this really help you on your side. So for now, just reach out to us, and we can definitely set up some sessions to go more in deep on that topic.

All right. Thanks, Francisco. Probably another question for you here. Does OneSpan gives the option to draw the signature or you store drone signature?

Absolutely. So this is a supportive capability today. So when the sender prepares the transaction, they have the ability to request the type of signature that will be used during the signing session by the different recipients. And in one of those options is the ability to draw the signature directly using their PC or even have the option to send it to their mobile devices to take advantage of the touchscreen capabilities of your smartphones. We also have the ability to upload images of that signature. So if you have it already stored. And on top of that, if you already have an account with OSS, if you are an internal signer in the organization, you can have a pre-uploaded image of your signature related to your account that you can leverage during the signing session.

All right. We have another question around identity verification and Smart Form. So can an identity verification process be integrated with a Smart Forms account opening workflow, for example?

Yes, that's a great question. Absolutely. So identity verification, is integrated into OneSpan sign and it can be leveraged with our Smart Forms solution. So yes.

All right. Thank you, Brett. Another question, can you explain the new granular permission for layout and template management?

Absolutely. This is part of our role in permission capabilities of OneSpan Sign. So when you enable this functionality, it gives you access to create custom roles that goes beyond our traditional 4 or 6 out of the box roles. And within that, in the past, layouts and templates as part of the transaction permission. So everything bundled together. The feedback that we receive from customers is that they did have use cases where certain members of the teams needed to control templates, whereas others only need to worry about creating transactions. So this is another step to continue adding more granularity and allow you to create those customer roles to really distribute the task among your team members that best suits your business requirements.

Okay. Thank you, Francisco. We'll give it one more minute. I don't see other questions. So we'll give it a few -- one more minute if you have any questions. Just a reminder, also about the webinar, our upcoming webinar on the 25th of June where we're going to be looking at our Microsoft and Google integration. So Ralitsa shared the registration link with everyone in the chat. So have a look, feel free to register and hopefully, we'll see you and the webinar next week on the 25th of June. I don't see any more questions. So that's it. That's the end of our webinar. So thank you so much for joining. I hope you enjoyed it. And thank you so much to our presenters as well, a great panel of presenters today. So yes, thanks again, and have a great rest of the day.

Thank you, everyone.