What is a Digital Signature, And Why Should You Use It for Your Business in 2023


Technology and communications are becoming more important to our society. Electronic signatures will continue to increase as technology improves and is ingrained in our daily lives.

Most people who use smartphones for daily tasks include checking mail, performing transactions, surfing the internet, and handling files. These all contain sensitive information and can even be the most valuable information in our society.

Digital signatures ensure that data transferred via these media is encrypted and cannot be altered. Digital signatures are similar to basic electronic signatures but offer a higher level of security.

What is a Digital Signature?

What is the difference between a digital signature and an electronic signature? A digital signature uses encryption, a fancy mathematical scheme to verify the authenticity of a digital message or document. An e-signature adds a signature to a contract. Electronic signatures can be used for everything, from entering your name at the bottom of an email to clicking on the "pay now" button on a website.

However, for simplicity's sake, these terms can be used interchangeably to refer to signatures other than pen and paper.

These are the three most common types of electronic signatures:

  • Simple Electronic Signature
  • Advanced Electronic Signature (AES).
  • Qualified Electronic Signatures (QES).

The simplest type of e-signature is a simple electronic signature. This could include entering a name and ticking a box to indicate your agreement. This is a signature without the unique features of an Advanced Electronic Signature or Qualified Electronic Signature (QES).

Advanced Electronic Signatures are more complicated and require a signature uniquely linked to the signatory. This signature can identify a single signatory and detect any post-signature changes.

Qualified electronic signatures include everything in an advanced electronic signature and a Qualified Certificate provided by Qualified Trust Service Providers. This type of digital signature is the most secure and can be used to confirm identity. The individual must hold their passport and sign using a Qualified Sign Creation Device. This is thorough!

How do Digital Signatures Work?

Digital signatures are created using public-key or asymmetric cryptography. The public key algorithm generates the pair of private and public linked keys. These linked keys are used together to protect the signature's authenticity. While the private key allows the signer to encrypt the relevant data, the public key can only decrypt the signature data.

A contract is signed digitally by a person. The hash generated is unique to each document. Any part of the hash can be changed, but it cannot be altered. This is how the cryptographic hash is encrypted.

Once the signature is complete, the digital document can be sent to the recipient. The recipient must have access to the public key certificate of the sender to view encrypted messages. This is essential for the entire process. It could be used to create illegal digital signatures, for which the holder would be responsible.

Digital Signatures are Beneficial to Businesses

Today, digital signatures are widely used for their many benefits to companies worldwide.

We will discuss the key benefits of digital signatures and why they are cost-effective investments for companies that still rely on paper-based processes.

Efficiency and Cost-Effectiveness

Modern business requires a constant stream of suppliers, partners, and business agreements. Paper and pen are quickly becoming unsustainable. When you exchange contracts daily, the speed and cost of printing and posting materials and faxing them are not possible. Digital signatures make it possible to stop the tedious and costly process of running day-to-day business.

Better for the Planet

Digital signatures can save the planet! Digital signatures can eliminate unnecessary waste and save you money on filing cabinets.

Captivating UX

Digital signatures are well-known for their simplicity and ability to sign complex documents quickly. Digital signatures offer a faster, more efficient, and seamless process.

Higher Security

Digital signatures are created using PKI technology. This type of encryption makes the signature a part of the final document and can't be altered or removed.

Signing digitally allows the signer to identify themselves using their national electronic IDs. Your customers will see eIDs as trustworthy identification tools that allow them to access online public and private services.

A digital signature can also be used to record the IP address and time of creation. You only need the digitally signed PDF to prove your case.

Wide Acceptance and Legal Compliance

Digital signatures have the advantage of being enforceable in almost every country worldwide.

Is your company able to operate beyond national borders? Are you a supplier, partner, or customer abroad? Digital signatures are just as legal-binding as handwritten counterparts, which is why you should use them.

Digital signatures in the European Union are the most secure form of e-signatures. They can be used to sign almost all documents.

Time Saving

You will spend a lot of time completing manual tasks like drafting, printing, and scanning paper-based documents. Getting the documents signed and returned can take days, sometimes even weeks. You will need to wait for answers if a signature is not present.

Digital signing reduces manual work and the time it takes to sign documents.

Workflow automation

Paper processes need coordination, accuracy, tracking, and manual coordination. This is especially true when documents must be signed in a specific order and data confidentiality protected.

Errors can happen when people handle the paperwork. There are inevitable errors, delays, and risks of violating policies. They are eliminated when you use a digital tool to make the process consistent and free from errors.

Are digital signatures legal in the UK?

The short answer to your question is yes. English law recognizes almost any type of signature. While "wet-ink signatures" or paper signatures have been the standard for many years, the free digital signature offers businesses all the tools they need to adopt a modern approach to document signing and contracts.

However, convenience comes with a certain risk. In a dispute over an agreement signed using a Simple Electronic Signature, the party seeking to rely upon that agreement may need to show the court that the other party validly signed the agreement. The eSignly platform aims to increase certainty about electronic signatures' legally binding status. All paid subscriptions include unlimited access to our secure and sophisticated electronic signature tool. Our native electronic signature tool can identify a unique signatory and detect post-signature changes. To ensure extra security, the eSignly platform requires that any recipient of a contract or other document must enter a system-generated PIN before they can electronically sign using eSignly. Sign up now to see how easy it is to sign off business transactions using our next-generation electronic signature tool.

Use cases of Digital Signatures

Due to their simplicity and wide range of security features, digital signatures can be used in many different situations. Digital signatures can now replace many businesses that previously depended on wet-ink signatures. What would this look like for businesses? Digital signatures are used in a variety of popular ways. These are:

Customer and Client Onboarding

You may need to share important documents with your client depending on the nature and scope of your business. Client onboarding can be greatly simplified by using a digital signature. This will save clients and your team time and avoid tedious admin.

Legal Documents

Protecting your business legally is important but can be costly and time-consuming. Digital signatures can dramatically speed up the process by streamlining contract reviews and securing important documents.

Internal Affairs

Management of people is one of the most difficult aspects of managing a business. This complexity increases when considering employment contracts, benefits reviews, confidential contact information, and confidentiality. Many companies use digital signatures to simplify hiring and company updates.


Today's UK SME owners rely heavily upon efficiency, whether in the day to run the business or to look long-term. SMEs need more time and patience to save on paperwork regarding hiring, investing, and securing trade partners. Yet, it is essential to protect the company's interests.

SMEs need to be able to invent quickly, implement faster, and have legal protections to protect them from risks. Digital signatures can be created, signed, and recorded in hours, unlike wet-ink signatures. This allows SMEs to keep up with their peers.

How to Know if the Electronic Signature is Legal?

How do you verify that e-signatures are valid? How do you know if the intended recipient has signed an e-sign?

You can verify whether an e-signature has validity in several ways. You can first verify the validity of the signature by reviewing the metadata. This metadata will show you the date and signature creator.

Digital signatures can include other information such as:

  • IP Address
  • Information about OS and browsers
  • Stamps with date and time

You can also view the certificate signed by the signer. This certificate can be viewed on your computer or mobile device.

Consider the example of an e-signature for Adobe PDF files. Your signature is automatically added to the PDF file when you sign a document using Adobe Acrobat Standard and Professional.

Your signature is automatically compared to the information in the certificate when you open the file. Adobe Acrobat will accept your signature if the information matches. If the information does not match, you will see an error message.

Open the PDF file, select Verify Signature from the Edit menu, and you can check the signature. This will open a dialog box that displays all information about your certificate and compares it with the PDF file.

Electronic Signatures Increasing Use

Electronic signatures are a new technology that has been around for years. Whitfield Diffie and Martin Hellman first described it in 1976. In 1988, Lotus Notes 1.0 became the first software program to offer digital signature capabilities. This was achieved using the RSA algorithm.

Digital signatures were made legally binding only in 1999 and 2000, however, with the introductions of the EU Directive for Electronic Signatures (ESIGN Act) and the EU Directive for Electronic Signatures (EU Directive for Electronic Signatures).

Electronic signatures have been around for many decades. However, they were only recently widely used. A recent survey of more than 2000 participants revealed that over 65% of current eSignature users only started using it within the last two years. It was also revealed that most businesses use e-Signatures for security enhancements.

Covid-19: Why Esignature Adoption is Growing

The recent pandemic, which shocked the world, is the main reason for the increasing adoption of e-Signatures. Covid-19 caused many companies to be unable to work remotely for several days. Locks were also imposed in many parts of the globe to stop the spread of the virus. This decreased the likelihood of signing traditional signatures and encouraged the use of e-Signatures.

Recent research shows that more than 50% of businesses used digital signatures to protect themselves during the pandemic. Individual adoption also increased by 13%. Also, it is believed that electronic signatures adopted by Covid-19 users will continue to use them in the post-Covid era.

These numbers suggest that digital signatures are not a trend but the future of business. The same can be seen in market projections.

Covid-19's impact has been global. It has changed the way people live and interact with each other. Everyone, from large businesses to small traders to self-owned shops and shops, has had to rethink their business practices. This includes creating new networks and structures that allow people to thrive in an environment that does not permit them to contact each other. This has had a ripple effect across the board. It is evident in many ways, including operational and logistical challenges and simple processes such as signing a contract.

While digital solution like the e-signature are not new, COVID-19 has helped increase India's adoption rates. Companies now take to their screens to keep running as usual. Some of the benefits are obvious, such as the ability to go paperless. However, electronic signing allows documents, contracts, and other information to be signed remotely and approved, allowing businesses to continue their operations without any negative effects.

Why Electronic Signatures Are an integral Part of Businesses

It's becoming more important for businesses to be able to verify documents as they grow electronically.

There are many reasons why e-Signatures should be an integral part of a business. The most important reason they are an integral part of a business is the multitude of benefits they offer. These are just a few reasons digital signatures should be an integral part of businesses.

  • By eliminating the need to have physical signatures on documents, you can save both time and money. Many paper-based processes currently in place would be easier to manage and time-consuming with eSignatures.
  • You can track every document sent through your system and see who signed it and when.
  • To protect documents from prying eyes, you can encrypt them on your server.
  • You only need one person's password to access the documents they have signed. If someone asks you for that password, it will only be given.
  • Electronic signatures can be legally binding in many countries worldwide (including the United States).
  • The system can be used for any document, not only contracts and agreements.
  • It is easy to share documents among multiple users. You can also add colleagues for feedback before signing off.
  • Electronic signatures are easier to track than physical ones, so if you have any issues down the line (e.g., someone claiming that they didn't receive something), it will be much easier to prove that they did.

Top Industries that Can Benefit From Electronic Signatures

It's easy to see how e-signature adoption is growing. Many types of businesses can adopt e-signature. An e-signature can be used if you regularly use paper forms. This new technology, regardless of the industry in which your business is located, can help you create digital processes that work for your employees. It will also last the test of time and be able to support your business as digital technologies evolve.

No matter which sector you work in - an eSignature is a must. Do you still need convincing? These are the top five industries that would benefit from free electronic signature. Is your sector on the list?


Finance professionals will be familiar with the amount of paperwork involved. While you will always need to deal with paperwork, e-signatures can eliminate that part and allow you to keep everything digital. How can an eSignature help the financial sector?

  • Secure Signing

Financial information is sensitive. It is crucial to ensure that this information is kept safe. E-Signatures allow you to sign documents securely while keeping track of important information like IP address, date, and time.

  • Digital Records

Financial sector professionals need a transparent and traceable audit trail. You can keep documents digital to ensure a tamper-proof record that can be backed up in Cloud storage to prevent damage or loss. Digital documents are easier to store because they don't require any physical space. They can also be easily retrieved with a search function at any time.

  • Stay Compliant

Financial institutions must adhere to regulations like Know Your Customer/Customer Due Diligence. E-signatures are also possible in this phase of the process. They can be useful when collecting personal information about clients. A few providers offer an integrated ID checker that can be used to verify the identity of your clients using digital technology.


The entire sales process is paper-intensive, from the first contact with a customer to the final signature on the dotted lines. An electronic signature can simplify your life and speed up your sales process. These are just a few of the many benefits that e-signatures offer.

  • Better Tracking

Every contact or inquiry you receive from your business could be a leader. You want sales opportunities to stay on track. Connectors allow you to automatically update your CRM by linking it to digital documents. This will ensure that you are always up-to-date with any transactions.

  • Responsive

You can quickly respond to customers with digital documents and e-signing. This allows you to respond quickly to any inquiries or requests. You can create, e-sign, and send documents in just a few clicks to quickly get contracts to customers.

  • Enhance Customer Experience

A great customer experience is vital for any business. This creates positive word of mouth and keeps customers returning to your business. E-Signatures allow customers to sign documents quickly and easily. There's no need to wait for paperwork or deal with scanning and printing.


The lifeblood of the legal industry is the signature. They signify that someone agrees to the contents of the document. Your signature is important because everything can be done online. E-signatures are a great way for the legal sector to benefit from digital documents and e-signatures.

  • Legally Binding

While some may be nervous about the move from ink to electronic signatures, they are legally binding in the UK. The Electronic Communication Act 2000 established this first, and law commissions further confirmed it in recent years. You can use a digital signature to sign legal documents. It has the same meaning and meaning as a traditional "wet" signature.

  • Save Money

Electronic signatures can save legal organizations money on paper and other hidden costs. Whether you are looking for savings on paper, storage, stationery, and printing, there are many. An e-signature can save you money if your company uses a lot of paper. It also reduces waste and helps to reduce your company's carbon footprint.

  • Digital Paper Trail

The law sector has challenges. It is important to sign documents and keep a record of transactions. Digital documents make it much easier to organize your 'paper trail.' You can say goodbye to filing cabinets and folders. Digital documents can be saved on both your hardware and in Cloud. This will provide a backup for your device in case of an emergency.


There is always paperwork involved in buying, renting, or selling property. You need to sign many documents in the real estate industry, including the deed to a home, a lease, and even a moving-in checklist. An e-signature can provide many benefits for your business.

  • Accepted By HM Land Registry

HM Land Registry was the only place in the UK that refused to accept electronic signatures for documents like transfers of ownership or leases. They now accept electronic signatures on these documents, making them valid for the property industry.

  • Signing

The housing market is dynamic. There are always new properties and houses on the market. E-signatures allow you and your potential buyer or renter to sign documents quickly, making it easier for you to keep up with a competitive market.

  • Accessible Technology

People can become overwhelmed by the new technology and worry that it will make life more difficult. While this may sometimes be true, e-signatures make signing easier. They are easily accessible for all levels of digital maturity. All your clients need to do is provide an email address.


Insurance industry workers will be familiar with the volume of paperwork required to process claims and insurance policy applications every day. The e-signature makes it much easier to manage documents and is more efficient.

  • Digital documents

Your business can streamline document workflows and reduce paperwork by keeping documents digital. Our digital solutions save time by allowing you to send and store documents electronically.

  • Enhance Customer Experience

Many clients will find filing an insurance claim stressful. Your clients must have as little difficulty as possible submitting any paperwork. Using an e signature, your clients can complete, sign, and return paperwork in just a few clicks.

  • Simple Storage

Your filing cabinets will quickly fill up if you have a lot of paperwork to deal with daily. Electronic documents allow you to free up space in your office and make it easier to find them.

The Key Takeaway

You don't need to worry if your business is signing documents using pen and paper. However, now is the time to make the transition.

Electronic signatures have become so common that people won't raise eyebrows or wonder why they are necessary when receiving a document.

E-signatures not only save you time but also improve your financial position. E-signatures allow you to sign papers faster, more efficiently, and more effectively than ever before.