What is E-signature?
With respect to the Federal Electronic Signatures in Global and National Commerce Act, electronic signatures can be defined as: “an electronic sound, symbol or process that is attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”
Examples of electronic signatures created using free software to create digital signature include a scanned image of the person’s ink signature, a mouse squiggle on a screen or a hand-signature created on a tablet using a finger or a stylus, a signature at the bottom of your email, a typed name, a biometric hand-signature signed on a specialized signing hardware device among others.
These are a subset of electronic signatures because they are also in electronic form. Digital signatures are a cryptographic mechanism often used to implement electronic signatures. Digital signatures go much further in terms of providing security and trust services.
Many countries, like the United States, the European Union, India, Brazil, and Australia, recognize electronic signatures within their jurisdiction as well as traditional signatures, making these e-signed documents completely legal.
Electronic signatures are easier to use than the traditional paper and pen signatures. Customers can sign documents online with a single mouse-click, or can also opt to use their fingers on any touch-screen device to trace their handwritten signatures onto a document, and this is what makes eSignatures popular. The regulations concerning electronic signatures vary across vendors, which is the reason as to why to guarantee the safety of documents, customers need to remain in touch with their vendors and occasionally check if their electronic signatures have been tampered with. On different occasions, this procedure might have to be repeated in case vendors are changed.
Electronic signatures use a type of cryptographic transformation of the data to allow the recipient to prove the origin and integrity of what it holds. Security is also taken care of since these electronic signatures also have user authentication via digital certificates, smart cards or biometric methods.
E-signatures are good enough for almost everything because most of the contracts can be safely dealt with via electronic means. They are starting to find the usage on all kinds of business documents, including service contracts and other complex transaction documents. Today, the availability of a variety of cloud-based services has made the process a lot simpler and precise with additional features.
E-sign Requirements: How to Make Sure an E-signature is Valid
In the past 15 years, the idea of a paperless office was something totally remote to the imagination. At that time, the idea was fairly nascent and although we had embraced document electronic signature software that created digital documents, the operations of using electronic communications were yet to be realized. Today, we are in a better place. We have more seamless and connected document handling, and cloud-based creation and control of documents. For instance, working on Google docs means that you can access your work anywhere, using any internet-connected device, as long as you’re logged in. however, the paperless office is still not quite there yet. A report published by Fujitsu found out that 62% of organizations said their paper consumption has remained the same- and some increased. There are many reasons why the paperless office is yet to be realized.
E-signatures are applied to a digital document using specialized software applications. There are a number of methods of applying an eSignature but there are particular technological methods that ensure that an eSignature is valid.
The following are requirements that make for a truly valid eSignature.
This is a mathematical transformation that ensures eSignatures perform seamlessly. Hashing takes the content of a document and creates a ‘hash’ from it. This creates a unique fingerprint of the data, similar to how DNA works. This hash is then associated with the document whereby you as the user of the document, see the content as normal. The neat thing is that in case someone else tries to change the document content after it is signed, the hash changes and any signatures on the document will become invalid. This means that you will see a change that has occurred, usually within an audit trail, or the eSignature itself may indicate it.
2. Authentication of the Signatory
The person that signs the document needs to be identified as being, who they are. In actual practice, this is done by a notary checking an identity document, such as a driver’s license. In the digital world, this is accomplished using a digital certificate. Digital certificates are issued by companies referred to as ‘certificate authorities’ and certificates represent a digital version of you. They comprise two major parts, a private key, and a public key which is used to decrypt something encrypted using the matching private key.
The document hash is encrypted using the private key of the certificate of the user. This makes the actual digital signature. A timestamp is also associated with the signature at the point of adding it, which is important for non-repudiation. If you check any eSignature on a contract, it will only display the ‘valid’ if the hash has not changed. Note that this hash is equivalent to the content at the time a signature is applied. In the event where the content changes, the hash also changes, and so the two no longer match- this sets the signature as ‘invalid’.
When choosing an eSignature, consider the following 5 steps
1. Choose a Flexible Technology Platform
A good e-signature service provider won’t tie you into rigid processes that limit how you can use the technology. If you want to maximize your ROI, you need to ensure that the technology you choose is not only flexible from a process perspective but also when it comes to using the solution on different devices and for different types of eSignature tasks.
2. Develop Your Signing Process
An electronic signature is a capture of the process a person follows when carrying out a signature transaction. You can create your own signing framework to make sure that all your organization and regulatory needs are met. In this case, you need to get a clear idea of your signing process early in your e-signature migration.
3. Test the Solution on a Small-scale
E-signatures are fairly easy to deploy from a technical point of view. However, some setbacks can come up as users familiarize themselves with the technology. A small initial rollout can help you work through any bottlenecks in the system before expanding your solution.
4. Get Some Champions on board
Ensure to incorporate the services of a few workers from each department deploying the solution to champion the technology to their peers. It is possible for employees to reject change simply because the technology is new. Having workers at every organization level ready to show their peers how useful the new technology is can make the adoption process much smoother.
5. Work Hard for Maximum Adoption
It can be tempting to incorporate the solution into your production environment and let users take it from there. However, aggressively working to maximize adoption rates internally can help you eliminate as much paperwork as possible and add more value.
The implementation of electronic signatures across organizations is key. Printing, scanning, faxing and overnighting documents is a waste of time. Electronic signatures are simple and secure, and implementing them is easy. Most e-signatures work well with systems you already use such as Google, Microsoft, and Apple among others.
Benefits of E-signature
1. Provides You with Complete Control over its Implementation
An e-signature solution should adapt to the specific processes, technologies, user management, and authentication requirements of your organization. E-signatures enable you to manage them in a way that best suits your internal regulations, governance policies, and standard operating procedures. It can also readily integrate with your organization’s human resources department, IT, security and screening policies, and user-management systems you already have installed.
2. Complies with the Regulations that are Relevant to Your Organization
The e-signature solution should be based on the internationally accepted standards that comply with the country and industry-specific regulations that are relevant to your organization. The eSignature helps the clients met the requirements of strict regulation and legislation.
3. Enables Anyone to Validate the Signature
E-signature solutions that are based on the standard public key infrastructure technology seal the document with one time ‘fingerprint’, which is unique to both the signer and the document. this technology ensures that the signature is transportable so that anyone outside or inside your organization can use widely available software, to verify these parameters: who signed the document, why they signed it, and that it has not been changed since the time of signing.
4. Provides Cost-effective IT Management
It can be helpful to evaluate the total cost of ownership when purchasing online electronic signature software. When choosing, consider the product cost, deployment, digital certificate renewal fees, training, and support. In addition to the paper related cost savings such as emailing, scanning, couriering, and archiving, the e-signature solution provides a low TCO through quick installation, minimal impact, and little maintenance cost.