In 2015, the world’s digital signature market stood at $517 million according to Allied Market Research (AMR).
The market is projected to hit $3.44 billion by the year 2022, which indicates a CAGR of about 30 percent in the period between 2016 and 2022. AMR is a leading market research and advisory organization that provides research reports and insights to small, medium, and large business organizations to help them make the right decisions. AMR points out that the factors propelling the growth of the digital signature market are such as reduced costs because of operations efficiency and acceptance of the use of digital signature in communication and internal processes within enterprises. The growing need to have data security and proper authentication due to persistent cyber-attacks are other factors that are driving the need for digital signature solutions in the market. Having said that, there are some deterring factors in adopting the technology - for example, the differences in applications and systems used to provide digital signatures. Despite the challenges to adopt this high-end technology, e-businesses are continuing to accept and use it.
Digital vs. Handwritten Signatures
The growth of e-business is rapidly advancing meaning that communication processes have to be stepped up and digitalized. One concern that online businesses have is authentication and online security. Many technologies have been introduced to help with internet authentication processes. A major issue that e-businesses experienced in their operations are having the hand-written signature processes replaced with the digital signature. This is something that is now being resolved by the use of electronic signature app.
When communicating online, e-businesses use a digital signature to authenticate as well as assure the identity and records of the clients. Digital signatures create the possibility of organizations entering into contracts, mostly noncommercial contracts. Think of it this way, if the law affirms that digital signatures are valid signatures, then it would mean that something like a job offer that is signed digitally by the employer would be legal.
What Drives the Use of Digital Signatures?
Using digital signatures helps authenticate electronic documents just the same way a hand-written signature would be used to verify a document. Many factors are driving the growth of the digital signature market. They include the need to eliminate fraud when using electronic documents, the need to enhance data integrity as well as transparency and scalability.
The use of digital signatures has also been brought about by the need to encourage technological innovations. That being said, not all organizations have taken advantage of these growing changes in technology. Using digital signature helps control and streamline workflow, improves operational efficiency, enhances the end-to-end client experience, and improves security. Enterprises and governments are now realizing the need to invest in electronic documents, something that has seen an increased need to seek the services of a digital signature website.
Digital Signature Market Segmentation
The market for digital signature is grouped into on-premise and cloud-based deployments. AMR has also analyzed the market based on verticals like Banking, Financial Services, and Insurance also referred to as BFSI. Other verticals are human resources, education, IT & telecommunication, real estate, government, and healthcare. The analysis of the market is also pegged on regions it is widely used including Europe, North America, Asia-Pacific, and LAMEA.
Based on the component, the services of the digital signature innovations are expected to grow considerably in the period between 2016 and 2022. Digital signature services help businesses to have an easy, secure, and efficient way of handling queries that are associated with signature activities for documents. For example, eSign provides digital signature services for businesses. A majority of the global digital signature services were seen in Europe and North America that both accounted for approximately 80.3 percent in 2015. During the forecast period of 2016 to 2022, Europe and Asia Pacific regions are the ones likely to witness a huge growth rate.
Digital Signature Deployment
Cloud-based deployment of digital signatures has remained the dominant segment in the market and is expected to continue dominating the market during the forecast period because of the lower costs of cloud and easy availability of cloud storage. Use of cloud-based digital signature services ensures that businesses don’t manage the application using local servers or individual devices, which can be costly for them. The increase in cloud-based services has been driven by the increased availability of SaaS, reduced the cost of installation and other related costs such as space rental.
Digital Signature Verticals
The Banking, Financial Services, and Insurance denoted as BFSI is projected to witness the highest growth rate in the period. In the BFSI industry, Europe and North America accounted for roughly 70 percent of the market in 2015 with North America taking 37.5 percent of the BFSI industry’s share. For instance, in banking, transactions have shifted from the typical face-to-face or on-the-counter services to use of digital platforms like ATMs, smartphones, tablets, online, and kiosks. Although these channels provide convenience in banking, there are security risks inherent such as hacking, fraud, fishing, and unauthorized money transfers. Use of digital signature in initiating such transactions helps reduce the risks and offers improved results in the speed of the transaction. It also helps reduce the costs of operations while also enhancing the experience of the customers.
The different government sector is also projected to see increased growth in the use of digital services. The previously used paper documents by various sectors within the government is now being replaced with digital documents to reduce operating expenses and align with technological innovations. In the government sector, Europe and North America recorded 70.02 percent stake in the use of digital signature in 2015 with North America having the largest share of 42.8 percent.
Digital Signature Segment by Region
North America was the highest contributor to the digital signature market in 2015 and it’s expected to dominate the market in the forecast period. The Asia-Pacific market is projected to be the second in growth.
Businesses organizations that use electronic digital signature software see increased efficiency in their operations. There is also reduced turnover time, and the costs of operations are kept at minimal levels. Using digital signatures also helps enhance security and ensure data scalability, integrity, and transparency. Businesses that use this technology experience customer satisfaction.