Protect Your Business with Electronic Signatures: Ensuring Compliance and Security

Electronic signatures are a quick and easy way to digitally sign documents without the need for printing, scanning, or mailing. They can save you time, money, and resources while also increasing client satisfaction and retention. 

Not all electronic signatures, however, are made equal. Depending on your industry, location, and use case, you may be required to follow various laws, rules, and standards governing the validity, security, and enforceability of electronic signatures. 

In this post, we will define electronic signatures, explain how they operate, and what you should consider when utilizing them in your business to ensure compliance and security.

What is Electronic Signature?

Any electronic sound, symbol, or process that is attached to or logically related with a document and executed or adopted by a person with the purpose to sign the document is referred to as an electronic signature. 

Typed names, initials, email signatures, digital images of handwritten signatures, biometric data (such as fingerprints or voice recognition), or cryptographic keys (such as public key infrastructure or PKI) are all examples of legal electronic signatures.

Electronic signatures are distinct from digital signatures, a sort of electronic signature that employs PKI technology to generate a unique digital fingerprint for each document and signer.

Electronic signatures give a better level of security and assurance than other types of electronic signatures since they can validate the signer’s identity, document integrity, and signature non-repudiation. 

How do electronic signatures work?

Electronic signatures operate by allowing users to upload documents, add fields for signatures and other information, and distribute them to recipients for signature. 

The receivers can then access the documents from any device with an internet connection and electronically sign them using their preferred authentication mechanism. 

The signing process is then recorded by the programme or platform, which provides an audit trail that reveals who signed what, when, when, and how. 

Some electronic signature solutions also provide cloud-based digital signatures that meet the highest security and legality standards around the world. 

These solutions rely on trustworthy third-party suppliers to issue digital certificates based on each signer’s identity verification. 

The certificates are then used to generate digital signatures, which are embedded in documents and can be checked using ordinary software by anyone.

What are the benefits of electronic signatures?

Electronic signatures provide numerous advantages to businesses of all sizes and industries. Among the primary advantages are:

• Speed: Using electronic signatures, you may cut the time it takes to conclude transactions and contracts from days to weeks to minutes or hours. They can also help to avoid delays caused by mistakes, missing information, or misplaced documents.

• Cost: By lowering paper consumption, printing expenses, postal fees, storage space, and administrative overhead, electronic signatures can save money. They can also boost income by speeding up cash flow and closing more agreements.

• Convenience: Electronic signatures can improve customer experience by allowing customers to sign papers with a few clicks or taps at any time and from any location.  

They can also improve collaboration by allowing several parties to sign papers online without meeting in person or exchanging physical copies.

• Compliance: Electronic signatures can assist organizations in meeting the requirements of numerous laws, rules, and standards that demand or accept electronic signatures as valid and enforceable. 

They can also assist firms in meeting industry-specific data protection, consumer rights, and data privacy standards.

• Security: Using encryption, authentication, audit trails, and digital certificates, electronic signatures can secure documents from unauthorized access, tampering, or alteration. 

They can also help to prevent fraud and disputes by providing proof of the signers’ identity and purpose.

What are the challenges of electronic signatures?

Electronic signatures also provide significant issues for businesses that must be addressed before they are implemented. The following are some of the most significant challenges:

• Legality: Electronic signature regulations differ from country to country and region to country. Some countries have particular rules defining what constitutes a valid electronic signature and what types of papers can be electronically signed. 

Other countries’ general consider electronic signatures laws to be equivalent to handwritten signatures if specific circumstances are met. Some nations have no legislation at all or have conflicting laws that make the legal status of electronic signatures unclear. 

• Regulation: Electronic signature regulations vary based on region and use case. Specific restrictions govern how electronic signatures must be used and the level of security and trust they must provide in certain businesses.

Other businesses have broad rules that apply to every type of document signing software or transaction involving personal or sensitive information. Some industries have no laws at all or regulations that are old and do not reflect current technological improvements. 

• Standardization: Electronic signature standards differ depending on the provider and system. Some service providers adhere to international standards such as ISO 27001 for information security management or eIDAS in Europe for electronic identification and trust services.

Other suppliers adhere to their own proprietary standards or none at all. Some solutions use open standards such as PDF or XML to provide interoperability with other systems and platforms. Other methods employ proprietary formats or technology, limiting interoperability. 

How can electronic signatures be used to assure compliance and security?

To ensure compliance and security when employing free electronic signature software in your organization, consider the following factors:

• Your address: You must be aware of the regulations that govern electronic signatures in your country or region, as well as the types of papers that can be signed electronically. 

If you are dealing with cross-border transactions, you must also be aware of the regulations that apply in the nations or areas of your recipients.

Your sector: You must understand what requirements apply to electronic signatures in your industry, as well as the level of security and assurance required. You should also be aware of any industry-specific best practices for employing electronic signatures in your sector.

• Your use case: You must understand the sort of document you are signing electronically and the dangers involved. You must also know what type of signature you require (basic e-signature vs advanced e-signature vs qualified e-signature) based on the document’s value, complexity, sensitivity, or legality. 

• Your supplier: You must select a respected provider who provides a dependable solution that meets your compliance and security requirements. You should also look into their credentials, such as certifications, accreditations, and audits.

Conclusion:

When signing documents online, electronic signatures are a valuable tool that can help you safeguard your organization by assuring compliance and security. They do, however, come with some hurdles that you must overcome by conducting preliminary study.

Understanding electronic signatures and how they function
You can make an informed decision about whether and how to employ them for your organization,  if you understand the benefits of electronic signature they provide, the obstacles they provide, and the issues you must consider.