Month: July 2019

25
Jul
2019

An Overview of UETA and ESIGN Act

Electronic signatures have become a generic part of the international computing landscape. The e-signatures follow the notion that the internet could use as a credible method for business transactions. The internet is more than just a means of communication, and so, it was obvious to use it for making transactions a lot simpler. Therefore, electronic signature laws such as the UETA and ESIGN act were put in place to govern the application of electronic signatures.

Electronic signatures were introduced to help people sign contracts from wherever they are, without the need of traveling to the distances. Furthermore, e-signatures were considerably helpful initiatives for saving time as well as costs for printing, storage, and maintenance of documents. These factors implied positive influences of e-signatures on the online economy.

Must Read: Top 10 Electronic Signature Myths and Facts

Before getting into the details of the UETA and ESIGN Act, let’s first understand the need for e-signature laws.

The Need for E-Signature Laws

Despite the promising advantages derived from electronic signatures, the need for legal imperatives such as UETA and ESIGN act was observed prominently. The lack of any specific legal system in the initial stages of electronic signatures was a prominent setback in ensuring their legal validity. This was also a notable pitfall in ensuring standardization of legal proceedings related to electronic signatures.

Therefore, it can be noted that these two laws had a considerable role in ensuring the legality of adopting electronic signatures. In the following discussion, let us find out some more details about these two laws and the various implications alongside the key points of difference between the two of them.

US Electronic Signature laws are specifically tailored to support the competitiveness of modern businesses with regards to their document workflows. Nowadays, a business could have a user-friendly signing experience with electronic signatures just because e-signatures are legally binding in different courts all over the world.

Even if UETA and ESIGN act is the general legal precedents followed for electronic signatures in the US, many countries have their unique regulations for e-signatures. For example, European countries follow the eIDAS (Electronic Identification and Authentication and Trust Services) regulation and Canada follows the Personal Information Protection and Electronic Documents Act (PIPEDA).

The two US e-signature laws are known for their distinct histories and implications which shall form the crux of a major share of this discussion. So, let’s dive deep to have more details of the ESIGN Act and UETA Act.

Electronic Signatures in Global and National Commerce Act (ESIGN Act)

The ESIGN Act is the federal law for electronic signatures that validates that contracts and documents signed online are legitimate. It has specific indications towards ensuring that business operations are streamlined and consumers don’t have to deal with paper burdens. If you have applied for a loan physically, then you must be aware of the effort and trouble that goes in there!

On the other hand, signing online has eased many processes for people, and many of them don’t even realize that the Electronic Signature in Global and National Commerce Act has played a huge role in helping consumers make the most of the electronic signatures.

There are a number of reasons to adopt electronic signature. Here are the top 10 reasons why you should adopt Electronic Signature for Your business.

The History of ESIGN Act

The ESIGN Act had widespread support from the Congress right from the beginning. Michigan Senator, Spencer Abraham, was one of the notable supporters for the bill. Spencer thought that the bill would be a successful instrument in taking away the fears related to the security of electronic contracts.

Representative Anna Eshoo and Representative Tom Bliley were the two legislators who first showed their inclination towards strengthening e-commerce contracts. The year 1999 witnessed the introduction of various bills related to eCommerce, and over the next years, the bills were subject to revision and expansion before their combination. The common goal for promoting electronic commerce alongside maintaining technological neutrality was found in House Bill 1714 and Senate Bill 761.

It was also noted with the HR714 did not have a broader scope, thereby leading to the inclusion of additional provisions for customer protection at a later stage. Finally, the act was introduced as a law by President Bill Clinton in June 2000. Most important of all, many states had already crafted and passed legislation related to electronic recordkeeping by the time the act was passed.

Exclusions from ESIGN law

While we are continuing ahead with our discussion on UETA and ESIGN Act, it is essential to outline the documents which are not included in the scope of ESIGN law. Here are documents which are not included in the ESIGN law:

  • Divorce notices.
  • Adoption paperwork.
  • Documentation for transporting hazardous materials.
  • Will, trusts, and codicils.
  • Utility service termination notices.
  • Court notices and orders.
  • Notices for eviction, default, repossession or foreclosure.
  • Notices for cancellation of insurance benefits.
  • Notices for material failure in products or product recall notices.

Now that we have obtained a detailed insight into one half of the UETA and ESIGN Act combination, it would be just right to move towards the other essential half.

UETA Came Before ESIGN

Many people might not have known about the fact that the UETA Act was the predecessor of the ESIGN legislation. It was passed by the National Conference of Commissioners on Uniform State Laws in 1999 before the ESIGN law was passed in 2000. The UETA (Uniform Electronic Transactions Act) is a state law that was specifically tailored for providing a framework that established the legality of an electronic signature for commercial as well as government transactions.

One of the most commonly accepted facts related to e-signature laws in the US is that the UETA and ESIGN Act are similar to each other. Even if this statement can be true to a certain extent, there are certain differences that make both the regulations distinct from each other. Before we take a look at the differences, it would be reasonable to dig deeper into the implications of the UETA regulation.

Adoption of Uniform Electronic Transactions (UETA Act)

The first interesting piece of information about the UETA regulation is that only 47 states in the US alongside the US Virgin Islands, the District of Columbia and Puerto Rico have adopted the regulation. The three states of New York, Washington, and Illinois have not adopted the UETA law.

However, these states have adopted legislation similar to the UETA and ESIGN Act to provide governance for the management of electronic transactions. Washington passed the Electronic Authentication Act in 1997 while the state of Illinois instituted the Electronic Commerce Security Act in 1999.

New York follows the Electronic Signatures and Records Act for ensuring the legality of electronic signatures just the same as pen and paper signatures. On the other hand, the remaining 47 states as well as the District of Columbia, the US Virgin Islands and Puerto Rico follow the guidelines mentioned in UETA for reaching consumer agreements on different online platforms.

Precise and Wider Legal Definitions of ESIGN and UETA Act

Another interesting highlight that can be noted with UETA as a supporting element in the UETA and ESIGN act combination is the broader legal definitions. UETA demarcates an electronic signature from an electronic record with broader definitions. For instance, UETA clearly states that an electronic signature and an electronic record should be combined to ensure their legal validity.

An electronic signature has to be linked or attached to an electronic record or document to make sure that the document or record is considered legally valid. Furthermore, an individual could find broader legal definitions of terms such as ‘computer program’ and ‘automatic transaction’ to help companies find better opportunities in terms of options to do business without compromising consumer protection.

Also Read: Digital Signature vs Electronic Signature

Some Important Points about ESIGN and UETA Act

As of now, you have understood the definitions and roles of these US electronic signature laws. But there are some important facts that we should also cover in this article. So, moving ahead, check out some of the important points about ESIGN and UETA act.

  • A widely accepted instrument for validating e-signatures

Before this act gained recognition as one of the prominent US electronic signature laws, businesses faced considerable issues related to the management of online transactions. This legislation made sure that electronic signatures stood up in any court by confirming that electronic signatures also had the same legal validity as pen and paper signatures.

The act stated that electronic signatures could not be denied legal validity or rendered unenforceable just because of their electronic form. Over the years, many court cases have shown support for the legal validity of electronic signatures.

  • Obtaining “Consent”

As a vital part of the UETA and ESIGN act combination, this legislation encourages the notion that customers have provided consent and have obtained the necessary disclosures about the electronic contract. The legislation implies the need to provide the customer with a clear and explicit statement about their right to withdraw consent at any time and the option for receiving the contract in a non-electronic form.

Even if the present consumer consent provisions in the act do not prioritize the facility of a paper contract to validate an electronically signed document or contract. However, the legislation also focuses on providing information to the consumer about accessing and retaining the electronic document, record or contract.

  • Giving longstanding evidence

Another implication found in one of the popular US e-signature laws is the necessity for businesses to retain evidence of the contractual agreements signed using electronic signatures. The evidence is specifically needed to address legislative requirements alongside preparing to resolve any concerns that may arise in the future regarding the legitimacy of the contract or details regarding specific terms in the contract.

The guidelines indicate the need to maintain the accuracy and accessibility of the records of agreements for all parties involved in the contract for a specific period. The specific period is determined by governing authority or stage agency that has jurisdiction for a particular transaction, contract or document.

  • Preventing federal and state law conflicts

As one of the popular e-signature laws, you can also find the ESIGN law as vital support for federal and state regulations. One of the notable motivations for Congress to pass the act in 2000 was to resolve the concerns of conflicts between e-signature laws in different states. This was primarily intended to prevent any negative impacts on interstate commerce.

The ESIGN law indicates that states which have adopted the UETA act can be able to introduced modifications or restrictions in the application of the ESIGN law. At a later stage, almost all states adopted the UETA regulation and thus any concerns of conflicts in e-signature regulations across states were resolved.

  • An instrument to promote global business participation

In addition to the legal implications related to e-signature with the UETA and ESIGN Act, the latter was also accounted as a foundation for helping US companies gain the leading edge in global business. Therefore, the ESIGN legislation also focuses on promoting the use of electronic signatures for international business transactions. However, all the parties are required to have their specific authentication technologies in place alongside the required legal path for proving that a particular transaction is valid in court.

Similarities Between the Two US E-signature Acts

The UETA and ESIGN Act are similar in a number of terms:

  • The first similarity arises from the types of documents that are not included in the scope of each regulation. UETA also excludes will, trusts, and the transactions that are managed by courts such as divorce or eviction notice just like the ESIGN law.
  • The primary focus of the UETA regulation is vested in electronic contracts that are implemented for business, governmental and commercial applications just like ESIGN law.
  • Like ESIGN act, the UETA regulation also implies the precedents for notarization of documents by suggesting the need for the notary or authorized professional for acting as a witness to specific contracts to have their signature in the electronic form. The regulation also reflected on the need for attaching the verification by the notary or professional witness authority for the contract with the electronic document to avail references in the future.

Differences Between the Two US E-signature Laws

While the UETA and ESIGN Act have been crucial components in the legal landscape for monitoring electronic signatures and transactions conducted by using them, they are also known for certain differences. The first point of difference between these legislations are the following:

  • The first difference is in the notices that should be agreed upon by each party before entering an electronic transaction. The UETA regulation implies that context and the circumstances define the legal validity of an agreement and can be helpful for companies to get a stronghold when conducting online commercial transactions.
  • Another point of difference that can be noted in the two renowned US electronic signature laws is observed in governance. ESIGN law is a federal act, thereby implying its influence on online businesses in all the 50 states of the US. On the other hand, UETA is adopted on a state-by-state basis, thereby suggesting that individual states have the privilege of accepting or rejecting the guidelines in the regulation.
  • In the majority of cases of conflict between the UETA and the ESIGN regulations, the state law would hold the top hand. The ESIGN law comes into play in these cases by suggesting that state laws don’t have to follow the precedents of federal law exactly. However, the states are required to provide equivalent legislation for protecting electronic signatures and electronic contracts.

Closing Words

On a closing note, it can be clearly stated that the UETA and the ESIGN law have been introduced for promoting eCommerce and online contract signing. These legal precedents are found to be promising instruments in resolving the concerns associated with the security of electronically signed contracts and documents. The background for the development of these regulations has been noted as a promising highlight in the discussion mentioned above, which showed us the exact intentions of lawmakers behind promoting these laws.

Most important of all, the legal implications of each of these regulations showed insights for the larger picture for implementing them to achieve security and legal assurance for electronic documents, records and contracts as well as electronic signatures. Finally, the reflection on the differences between both the regulations provided a better understanding of the applications of these laws.

Posted by Brian Felix, 0 comments
16
Jul
2019

Top 10 Electronic Signature Myths and Facts

Technological advancements have been the cornerstones of progress for human civilization. Over the years, we have witnessed the transformation of many essential activities and processes to the technological front. Electronic signature is one of such technological innovations. The applications of electronic signatures are widely observed in various fields, and it surely presents a reliable approach to reduce the piles of official documents in paper.

On the other hand, many electronic signature myths are making ground everywhere. These myths are primarily developed as a result of misunderstanding and lack of detailed insights into the definition and working of electronic signatures. It is important to understand the hidden electronic signature facts behind these myths.

So, this article would aim at outlining some of the notable e-signature myths to obtain a clear impression of the wrong and the right with e-signatures. In addition to this, the discussion would also focus on the facts about electronic signatures to understand them better.

Before we move towards exploring some of the electronic signature myths and facts, it is justified to have a basic idea of what electronic signature is and how it works!

What is E-signature and how does It Work?

The electronic signature can be defined as a digital version of the physical signature of an individual. It can be used for signing digital documents in different ways. Users can capture their signature on a document or use a click of a mouse button to sign digital documents.

Voice-based acceptance could also be considered as one of the ways to sign a digital document. Electronic signatures first came into existence with the passing of the Federal ESIGN Act, in 2000. There are various types of documents which could be signed electronically, such as policy adherence documents, non-disclosure agreements, executive meeting minutes, business contracts, and terms of service contracts.

Must Read: An Overview of UETA and ESIGN Act

Just like any other new technological innovation, electronic signatures also have found wide-ranging acceptance from different business owners. However, many others are still skeptical about the use of electronic signatures. So, it is essential to show a clear difference between the myths and facts associated with electronic signatures.

Let’s Go Through Most Common Electronic Signature Myths and Facts

Myth 1: E-signatures are not acceptable in court

Fact: The first and one of the most commonly noted electronic signature myths is that they are not legally binding. On the contrary, this is not true as electronic signatures have been considered legal, according to rulings, in most of the cases. All you have to do is prove consent and intent, like in the case of paper signatures to make it legally appropriate. Even if electronic signatures have been responsible for putting paper to rest for signing agreements, they have not left out legality.

It is clearly stated in the Electronic Signatures in Global, and National Commerce (ESIGN) Act that a document or a contract cannot be considered null in terms of validity, enforceability or legal effect in its electronic form. One of the notable electronic signature facts clearly shows that a valid electronic signature would be associated with a record of the time, date, and IP address of the signatories. So, the myth that electronic signatures don’t stand up in court can be put to rest now!

Myth 2: E-signatures are not secure.

Fact: Another one of the common electronic signature myths is that they are not secure, which is completely not true. In the case of electronic signatures, all the legal documents are secured with encryption, and all electronically signed documents are immediately covered into PDF files for additional security. All types of legal documents could be stored online for any duration of time that you want.

Most important of all, the audit trail or details of the time of a signature, time of opening a document, and the IP addresses of the signatories provide an excellent tool to verify the security of your electronic signatures. In addition to that, the majority of electronic signature software have firewalls and other advanced settings and protocols for protection against attempted breaches and other online threats.

Myth 3: E-signatures are difficult to adopt.

Fact: You would also find one of the electronic signature myths regarding the difficulty in the adoption of electronic signatures. Yes, users could indeed require some time, and experience many difficulties in adopting new technology. However, it doesn’t happen in the case of electronic signatures. Electronic signatures could be integrated very easily and that too in very little time! With the paper-based route, you would be spending a lot of time in printing, mailing, and signing.

On the other hand, you have to use the existing templates provided by the electronic signature software and change them if you want according to your needs. Then, just point out the areas which have to be signed and share the documents through email. This way, you not only save time but also make signing documents a much simpler task alongside considerable improvement in business productivity. Now the electronic signature technology seems quite easy to adopt, doesn’t it?

If you still think it is difficult to understand how electronic signature works, check out our previous blog on electronic signature workflow and get to know how easy it is!

Myth 4: You have to spend a lot on e-signatures.

Fact: Electronic signatures are expensive! That is also one of the electronic signature myths you need to pay attention to. You can save a considerable amount of money through electronic signatures. Think of loads of labor hours spent in converting contracts to different formats for emailing. You don’t have to deal with that anymore when you have electronic signatures. Most important of all, you would also be reducing costs associated with running a paper-based office.

With the use of electronic signatures, your office would not be dependent on purchasing paper, maintaining scanners, and printers or storage for signed documents. Moreover, you don’t have to pay any more for postage and courier costs. Even though all these factors are realized quickly, the myth surrounding expensiveness of electronic signatures emerges from the initial high costs.

However, there is no reason to worry as electronic signatures can foster process innovation, thereby leading to better returns on investment quickly. In addition to that, evolving technological advancements related to electronic signatures have resulted in their availability at affordable prices.

Furthermore, you don’t have to worry about storage of documents as you have cloud-based storage options with electronic signature software to keep away the massive file cabinets! With these functionalities of e-signatures, it is proven that they are highly favorable and cost-effective solutions as compared to paper.

Myth 5: You need special technical skills for using electronic signatures.

Fact: The requirement of specialized technical expertise is another one of the widely spread electronic signature myths in the present times. On the contrary, one does not have to be a technical genius for using electronic signatures. A basic understanding of electronic signatures can be sufficient to use them effectively.

Also, the e-signature solutions have made it easy to adopt and use an electronic signature. Easy steps, comprehensive guide, and quick support provided by the electronic signature vendors have removed the hassle associated with this new technology. So, even if you are not a technical person, you can easily use an electronic signature without any special technical skills.

Various companies which have adopted e-signatures have stated that employees find e-signatures easy to use and the companies were able to adopt the technology quickly. Therefore, this myth can also be debunked just like the other electronic signature myths which point towards the difficulty in the adoption of e-signatures.

Myth 6: Electronic signatures are just a trend.

Fact: Whenever a new technology comes, it comes with a boom and after some time, the boom is over. The same most of the people think about the electronic signature that it’s just a trend. It is one of the e-signature myths that has made its space in the mind of most of the people. It is important to know the fact behind this myth to know the truth.

The electronic signature is not just a trend, but it is present and future. More than 60 countries have introduced a specific set of laws and standards for validating e-signatures. It’s not because it’s a trend but it’s the innovation in the business world.

More than 60 countries have introduced a specific set of laws and standards for validating e-signatures. A large amount of data is generated every day by businesses, organizations, and individuals. To deal with the challenge of getting a huge number of documents signed everyday, electronic signatures are quick and efficient solutions.

The businesses in different industries have been readily adopting electronic signature which was previously relying on the paperwork. So, the electronic signature fact is that electronic signatures are more than just a trend, they are the future.

Myth 7: All documents can be signed electronically.

Fact: One of the noticeable e-signature myths is that if used, an electronic signature can be used for any kind of documents. But the e-signature fact here refers to the type of documents that are not considered valid with an electronic signature. The documents could be outlined as follows:

  • Product recall notices.
  • Notices for cancellation or termination of utility services.
  • Court orders, notices, and related documents.
  • Codicils, wills, and testamentary trusts.
  • Family law documents such as divorce or adoption papers.
  • Legal documentation for transportation of hazardous materials.
  • Notices for cancellation or termination of life insurance or health insurance benefits.
  • Default notices and notices for eviction, foreclosure, or repossession.

So, it is important to know, though electronic signature can be used for different types of documents, there are many documents for which electronic signature cannot be used.

Myth 8: You need a certificate to use electronic signatures.

Fact: Electronic signatures and Digital signatures are two similar terms but both are different. Sometimes, people may get confused between digital signatures and electronic signatures. So, it becomes important to understand the difference between the two i.e. Digital signature vs Electronic signature.

These are digital signatures which require a digital certificate for authorizing the encryption needed. Certificate Authority (CA) is responsible for issuing digital certificates. Generally, large businesses develop their in-house CA while smaller businesses and individuals tend to turn towards a CA provider to obtain digital certificates. Many digital certificate vendors provide various customized solutions for their electronic signature needs that may be availed either through a transaction-based or subscription-based payment model.

So, in order to get over a few e-signature myths, it is important to understand the difference between digital signature and electronic signature.

Myth 9: The choice of e-signature solution does not matter.

Fact: This is one of the electronic signature myths which is primarily based on the premise that every e-signature solution in the market can be suitable for all organizations. There is no surety that you can choose one e-signature solution for on-premise deployment and another one can be utilized as a SaaS (Software-as-a-Service) scaling according to the needs of your business.

Also, the selected vendor should be capable of using innovative technology in combination with comprehensive industry knowledge for better awareness of your common use cases. This can help ease the adoption process and provide better opportunities for success with e-signatures.

Finally, the ease of use is also dependent considerably on the e-signature solution provider. So, you have to make sure that the electronic signature vendor could be able to provide the flexibility of e-signing irrespective of the place or device. Most important of all, the solution should provide a customizable graphical user interface as well as the flexible workflow that can be tailored to various channels and processes.

Myth 10: Multiple electronic signatures cannot be managed.

Fact: This is one of the common e-signature myths spread among the newbies that it is not possible to manage multiple electronic signatures on a contract. On the contrary, electronic signature provides the facility of signing multiple pages of a contract by different signatories. Contemporary e-signature solution providers offer the facility of sharing one document across multiple signatories along with the account holder for the document.

While some solutions would imply that you can limit the sharing of the document up to a certain number of signatories. However, if you need multiple signatories exceeding the particular number on a concerned legal document, then the document can be re-imported and shared among other signatories.

Use of electronic signature can bring several benefits to you. If you have any doubt regarding the use of electronic signature, read out these 10 reasons to adopt e-signature for your business.

Closing Notes

Now we have obtained clear insights into the different electronic signature myths and facts, it would be reasonable to focus on making the initiative! E-signatures not only help in cost savings but also introduced process innovation for businesses to improve productivity.

Even though many electronic signature facts show the benefits possessed by them, people and businesses continue to doubt their functionality. However, attempts to clarify the misconceptions about e-signatures and large scale adoption could pave the path for a future in which paper is no longer needed for business documentation.

Surely seems like a path towards a greener and better future, doesn’t it? Share your thoughts in the comment section below on it. If you have any doubt in your mind regarding the use of electronic signature, just mention it below and we’ll guide you through all the way.

Posted by Brian Felix, 0 comments
11
Jul
2019

A Comprehensive Guide to Electronic Signature Workflow

The world of business is transforming at a fast pace, and there is no scope for any organization to fall behind just for the sake of it! We have witnessed several technological advancements, making a huge difference to businesses all over the world, such as customer relationship management systems, social media marketing, and integrated communications.

One of the notable advancements which have started making a huge impact on businesses and individuals is the electronic signature. To understand electronic signature, it is essential to understand the electronic signature workflow first. Let us understand the definition of electronic signature and the how electronic signature works by reflecting the processes associated with an electronic signature.

Basic Understanding of the E-Signature Process

Before an illustration of workflow for electronic signature, let us reflect on what is an electronic signature. An electronic signature can be defined as a digital verification of a signatory’s identity. It is a proven instrument for verifying whether an electronic document has been signed by a person as claimed on the document without any concerns of tampering.

Electronic signatures are associated with coding and encryption, thereby reducing the concerns of security risks for digital documents. What is an electronic signature in a simple way! Assume that you have a document with your signature on it locked in a box that needs two keys for opening. In case the keys don’t match with each other, an alarm goes off! However, in the case of an electronic signature, there would be no alarms, instead, the signature would be considered invalid for accessing the document.

Most important of all, the other parties involved with the document would be notified about the interference. This is quite a simple way to describe the working of an electronic signature. On the other hand, it is not as simple as it looks! So, we need to go behind the scenes and break down the electronic signature workflow into different steps for understanding it better.

Want to learn more about electronic signature? Read our previous blog on the comprehensive guide on Electronic Signature.

Benefits of Electronic Signature that Can’t be Ignored

A clear understanding of how electronic signature works could also help in obtaining credible insights regarding its benefits. But let’s have a look at the important benefits of using an electronic signature.

With the help of e-signatures, you could be able to receive the benefit of time-saving. You don’t have to wait anymore for someone to visit or courier and scan signed documents. There is no need for any type of downloading, printing or sending through courier or mail with electronic signatures. All that is needed is signing and sending. You can easily send proposals, close deals, and sign contracts in matter of a few minutes with electronic signatures.

This benefit subsequently translates to another noticeable advantage of electronic signatures, i.e., cost savings. A business could save considerable amounts of money that would have been otherwise spent on buying paper, ink, and courier costs. In addition to that, you could also have savings on the costs of maintenance of printers and other hardware such as storage cabinets by replacing paper documents with electronically signed documents.

Most important of all, users of e-signatures could be highly assured of the security of their documents by understanding how e-signature works. Even though signing on paper does feel credible, there are a lot of pitfalls related to the security of paper documentation.

The threats of untimely disasters such as accidental fires or natural calamities as well as theft and damage due to negligence can be notable factors hampering the safety of paper documents. On the other hand, electronically signed documents are protected by a unique means of authentication and encryption to assure safety.

Why Do You Need to Understand Electronic Signature Workflow

What exactly is the objective behind understanding the e-signature workflow? The benefits mentioned above show the effectiveness of electronic signatures. However, a clear understanding of the electronic signature workflow could explain the benefits in detail.

Many individuals just think that e-signature technology is just a tool for obtaining consent and documenting intent associated with a document. On the contrary, the effectiveness of an e-signature solution depends considerably on the management of the different steps involved in the workflow of electronic signatures.

If you are aware of different processes involved with each step in the workflow of electronic signatures, then it can also support in carrying out the tasks effectively. Understanding the workflow would not only ensure that you get the desired benefits with the e-signature but also complete the process according to commonly accepted imperatives.

Furthermore, it could also help you understand the best practices implemented at each step of the workflow involved with an electronic signature!

No doubt, the electronic signature seems to be the future of businesses. Let’s have an eye on the Global E-Signature Market Forecast made by the experts of the industry.

Steps Involved in the Workflow of the Electronic Signature Process

Now that we have taken a basic impression of electronic signature and the way it works along with their benefits and the reasons to observe electronic signature workflow, let us get down to the main job at hand!

A detailed presentation of each step involved in the workflow for a general electronic signature process alongside the best practices could be the formidable highlight of this comprehensive guide. So, let’s dive deep into the steps to understand the electronic signature workflow.

1. Providing access to the document for signatories

The first step involved in e-signature workflow is to provide access When you have a document that has to be signed electronically, you need to establish methods for signers to access the document. You can observe that email is the first thing that comes to mind for giving access to the document to be signed to the signatories. Sending email invitations to the signatories could be accounted for as one of the proven and tested ways for providing access. However, there are other cases where the electronic signature process is integrated with a mobile or web application.

Signatories could be invited by requests for logging into a web application or web portal. The other practices which are observed in this step of an electronic signature workflow include the use of an embedded link with a mobile application or any native or third-party application.

The use of a shortened URL or a QR code on a printed document could also be considered for allowing access to signatories for a document. Another method to provide access in the first step of the electronic signing process is the involvement of a representative in starting the signing process through an enterprise dashboard or application portal.

2. Authentication

The next entry in the electronic signature workflow is the authentication stage. After the signatory gets an invitation to sign a document electronically, they have to prove their identity for starting the process. This is a mandatory requirement to ensure the security of the electronic signing process.

The options that can be put in place here include the risk associated, type of transaction, and whether the signatory is new or an existing one. In the case of existing signatories, the recommended method would be the use of credentials assigned to them by the organization. However, the authentication method would be different for new signatories!

There are many approaches to verify a new signatory, and they have to be selected based on the risk profile associated with the process. Some examples of authentication methods for new signatories include SMS authentications, dynamic knowledge-based authentication (KBA), smart cards, or email authentication. The use of public and private keys could also be considered as one of the best practices that can be employed in the authentication stage of an electronic signing process.

Also Read: Why Should E-Signing be a Part of Your Business?

3. Presenting the documents to signatories

The next step in the electronic signature workflow is the presentation of documents. This stage would involve deciding the approach for presenting documents to the signatories for helping them read the documents before signing. The recommended method for completing this step is to use a web browser through the e-signature solution provider for presenting documents.

With the use of nothing more than a browser to access the documents for signing, a signatory would not have to download any type of software. This completely resolves the concerns that could arise with software incompatibilities.

You could always have the facility of printing copies of the documents for enabling signatories to review the documents on paper. However, you should always note that the presentation of documents on the screen is a mandatory step in the workflow of an electronic signature.

4. Making some changes and optimizing the process

As we move on to the next step in the electronic signature workflow, our understanding of how e-signature works get more refined! In this stage, the e-signing process deals with uploading and updating the document. For some business processes, signatories may have to add certain documents to the transactions. For example, in the case of insurance applications, the agents of a policyholder would ask for specific documents that have to be added to certain business application processes.

Therefore, the signatories have to use the facility of uploading scanned versions of additional documents to the e-signature solution provider so that they can add it to the transaction. The e-signature solution provider could also include other signatories required to sign a particular document.

A specific course of action triggered by certain events can be put in place to make a logical succession of events standing from the creation of the document to the review, signing, and acceptance of the document.

5. Addressing the needs of forms of data capturing

The signing process also involves the addition of data fields in the document for getting inputs from the signatories. This is one of the important steps to understand how electronic signature works. Majority of electronic signing transactions start with a final document already in place.

Such cases involve capturing forms data through an e-app or a core application and adding them to the document template. However, there are some instances where you have to capture data while signing electronically. This is where you could rely on the electronic signature solution provider for a platform to achieve forms of data capture.

Do you have any doubt regarding the use of electronic signature for your business? Here are the 8 reasons to adopt e-signature for your business.

6. Getting the signature

Now, the most important step in the electronic signature workflow arrives! You have to get consent and acceptance of the signatories, and this is where the ‘click’ comes in. The common assumption about electronic signatures is that you click to sign and it is a crucial stage in the whole electronic signing process. Some of the best methods that are followed in this stage include smartcard signing, digital handwritten signature, and ‘click to sign’.

The use of smartcard signing could be observed routinely in the case of contractors and federal government personnel who use digital certificates embedded in their PIV smartcard or Common Access Card (CAC). With the application of touchscreen devices, the signature can be obtained by capturing it through the device.

The simplest method that is used for getting the sign of acceptance and consent from signatories is the ‘click to sign’ option that enables signatories to click on a button through their browser on their PC, smartphone, laptop or mobile device.

7. Verifying security of the documents

Security is also one of the prominent aspects related to an electronic signature workflow. Therefore, the e-signature solution provider has to ensure that the electronic signature is compliant with the standards established by ESIGN and UETA. This will be mandatory to make sure that the electronic signatures cannot tamper.

The safety of documents is one of the primary selling points for electronic signatures. So, the compliance with ESIGN and UETA standards makes sure that your workflow for the e-signature process is appropriately optimized for security. Most important of all, the electronic signature workflow should also include reminders in case of unauthorized access to the documents or failure of the signatory to verify their identity.

8. Closing Stage

The next important step in the electronic signature workflow is the delivery of signed documents to the relevant signatories. The commonly followed approach for this step is the use of a cloud-based storage solution for uploading the signed documents. The signatories could access the documents by entering their credentials used previously in the authentication stage of the workflow for the e-signing process.

In addition to the delivery of signed documents, the audit trail also serves as an important component in the final stage of the e-signing process. The audit trail is a crucial element that is needed as evidence for all the events that happened during a specific transaction.

Only after verification of the audit trail, the process of electronic signature can be finalized for completion. Each signatory would then be sent an URL link for the completed document thereby making them aware of the fact that the process has been completed.

Don’t confuse between digital signature and electronic signature, the terms seems similar but are different. Check the detailed difference here Digital Signature vs Electronic Signature.

Final Words

On a concluding note, the importance of understanding the e-signature workflow could be observed from the above discussion. Good knowledge of all the steps involved in the electronic signature workflow not only makes the process easier to complete but also ensures complete accuracy as well as access to all benefits of electronic signatures.

The electronic signature is not just a boom, it’s a revolutionary technology in this digital era that has changed the way how businesses work completely. Avoiding something new and beneficial is an indication that you are lagging behind from your competitors. Before others leave you behind, adopt electronic signature for your business, and get one step ahead from your competitors.

Posted by Brian Felix, 0 comments
02
Jul
2019
Digital Signature vs Electronic Signature Decoded

Digital Signature vs Electronic Signature Decoded

Do you think electronic signature and digital signature are the same? You may have used these two terms interchangeably but these are not the same. Let’s have a deep look at the difference between e-signature and digital signature i.e. digital signature vs electronic signature.

In this fast-changing digital world, companies have been increasingly adopting automation techniques and strategies to pace up their work productivity. Foolproof and trustworthy work ambience is the need of the hour.

At this outset, physical signatures come with its own set of limitations in the form of susceptibility to forging, low durability, poor access, etc. Hence, the digital signature and the electronic signature has turned out to be a savior by bringing in much-needed automation and throughput efficiency.

The terms electronic signature and digital signature are often considered the same and thus, used interchangeably. But the fact is that digital signature and electronic signature are two different concepts. So, in this article, we’ll discuss the difference between a digital signature and electronic signature i.e. digital signature vs electronic signature.

Before discussing the differential factors, we’ll understand what is a digital signature and electronic signature first.

Understanding the Terms: Digital Signature vs Electronic Signature

A digital signature is a mechanism by which transactions like contracts, bond agreements, business ventures, etc. are authenticated and secured. It involves the use of a unique, authentication key visible only to the sender and the receiver. It ensures tamper-proof transactions involving sensitive documents. In the world of increasing cyber-attacks, a digital signature could be the one-stop avenue to ensure long term safety and security.

Electronic signature is used in place of physical signatures to bring in authentication in a consistent and hassle-free manner. It could be considered as a superset out of which the digital signatures are derived. E-signatures often comes with a legal standing based on the geography of operation. Geographical security additions are inculcated in tune with the unique challenges confronting a particular region.

The main difference between digital signature and electronic signature is where they are used. An electronic signature is mainly used to sign the electronic documents where the signatory has got an intention to sign the document with his e-signature. On the other hand, a digital signature is used to secure the documents and it is used by the certification authorities.

We’ll cover the difference between digital signature and electronic signature in detail but let’s first dive into their history to understand them better.

History: Digital Signature vs Electronic Signature

The history of digital signature and electronic signature goes back to the 1970s. Whitefield Diffie and Martin Hellman conceptualized the basic idea of a digital signature. It was followed by the creation of an RSA algorithm to implement the first digital signature.

The year 1989 proved to be a landmark year for digital signatures. Lotus 1.0, the software used to create a digital signature was made public. Going ahead, digital signature and electronic signature were given legal status with the passing of the ESIGN Act in the year 2000. With the coming of PDFs, insertion of digital signatures into a document became simple and hassle-free.

In the year 2002, SIGNiX became popular as the well sought after software for producing a digital signature. While the year 2008 was a year of recession, it also proved to be a landmark year for digital signature and electronic signature. Digital signatures were given the status of an open standard for PDFs.

Further, digital signature and electronic signature got a much needed secure market in the EU since 2016 with the introduction of eIDAS. The market for electronic signature and digital signature is poised to see massive growth with quadrupled output by 2020.

The Operational Flow: Digital Signature vs Electronic Signature

Imagine going through the hassle of waiting for long hours to send across your signature, just to obtain a bank loan? Wish you had avoided the unnecessary travel time? How about authenticating your salary slip with just the click of a button? If these automation amaze your intellect, you have been mesmerized by the power of digital signature and electronic signature.

Digital signature and electronic signature makes use of the basic technique of cryptography. The exact technique used by both is different, let’s understand that.

Digital signature uses the concept of public key cryptography. It makes use of a public key algorithm, for example, RSA, to generate two keys that are linked mathematically - public and private. In doing so, a sender generates a private and public key. He uses his own private key to encrypt and transmit his signature message.

The message can only be decoded at the receiver’s end by using the public key. There exists inbuilt mechanisms to decode events of data corruption, tampering, misalignment, etc. This is how digital signatures are authenticated.

On the other hand, electronic signature works in a different way, that is even simpler. The sender creates an online document or contract. He shares that with the signatory via email to order to invite the signer to access and sign the document. The signer receives the document, access it, review it, and sign with the document.

The process of e-signing the document with an electronic signature solution, automatically makes the document compliant with the electronic signature standards like ESIGN and UETA Act. It ensures that the document can’t undergo any unauthorized changes once it is signed. Then, the document/ contract is shared with the sender and the process is completed.

Throughout the workflow, the audit is offered to generate an audit trail. You can look back and check if the process works well.

Features: Digital Signature vs Electronic Signature

Though the underlying technology of both digital and electronic signature is the cryptography, it comes with its own set of subtle differences in terms of features. The E-signature vs digital signature debate touches upon a lot of parameters like the authorization authority, targeted use, security traits, reliability and quality of standardization.

1. Purpose of Use

The purpose for which these electronic signatures and digital signatures are used makes a big difference. The main purpose of using a digital signature is to secure the document while an electronic signature is used to verify a document.

2. Types

There are different types of electronic as well as a digital signature. A digital signature is generally used to secure the document. On the basis of document processing platform, the digital signatures can be of two types - Microsoft and Adobe PDF. On the other hand, the electronic signature can be in the form of a sound, symbol, process, scanned image, etc. There are four types of electronic signature - basic electronic signature, click-to-sign signature, advanced electronic signature, and qualified signature.

3. Regulation

A digital signature is regulated by the certification authority while there is no authority to verify the electronic signature. Though there are some national acts and regulations such as UETA act, ESIGN act in the United States, that recognizes the electronic signature and makes them legal.

4. Authorization Authority

Firstly, digital signatures are authorized mainly by government authorities. This could take the form of KYC (Know your customer) verification for banks, driver’s license or voter’s id issuance, etc.

On the other hand, electronic signatures are mainly issued by individuals like vendors for specific purposes like contracts for a business venture, inter-company partnerships, etc.

In other words, digital signatures are used to authenticate generalistic and public interest documents, unlike e-signatures which take a customized format. Electronic signatures are individual specific as they have been formulated by an individual with the sole interest of authenticating their signature, thereby their individual transaction.

5. Intention

The main intention of using a digital signature is the same as its purpose of use. A digital signature is used to secure a document so it could remain safe and can be protected from the unauthorized people. A digital signature is authenticated by the owner of the document.

The intention of using an electronic signature is to sign a document and verify that. An electronic signature is used when two or more people are involved in a contract and they sign a document to show their commitment. Both the electronic signature and digital signature acts as a legal binding between the participants.

6. Security

A digital signature and electronic signature both are comprised of many security features. So, considering digital signature vs electronic signature, a digital signature is more secure than the electronic signature. An electronic signature involves fewer security features, just to make sure that the document couldn’t be used and altered after signing without consent and permission of the sender.

As electronic signature is used to sign a contract, businesses are readily adopting electronic signature to deal with clients, vendors, and even employees. You should know the reasons to adopt electronic signature for your business.

7. Verification

A digital signature can be verified to authenticate the original author. It can be verified if the original document has not been tampered with, by any unauthorized access. As the electronic signature is not certified, it is difficult to check and verify the owner of the document. But an electronic signature comprises of integrity as well as the authenticity of the document.

8. Signatory Details

The digital certificates which represent the individual signatory, can be used to get the details of the person signing the document such as his name, email address, etc. As these individual details are tied to the document signature through the digital certificate.

On the other hand, the details of the signatory are not held in the electronic signature itself. Instead, if the details of the person who signs a document with an electronic signature are required, the signatory needs to place that detail separately to the signature.

9. Audit Logs

Digital signatures can hold the audit logs i.e. details of the events to know when the digital signature was applied. In some advanced digital signature products, the audit trail feature is added that can send the notification alerts if the log is changed or tampered with. On the other hand, it is not easy to apply audit logs to the electronic signature but some electronic signature products have started offering it.

10. Time-stamped

The electronic signature can have date and time associated with the signature but this detail is held separately to the signature. Digital signatures are always time-stamped. This is very useful in case of legal formality to tie a person to a signature at a particular date and time.

11. Reliability

Digital signatures are more reliable due to the detailed record of events associated with its signature trail. Starting from the time stamp; information of the signee including address cum work details; to the minute details triggering tampering alerts, digital signatures comes as a comprehensive package.

On the other hand, electronics signatures have both the time and date stamp arranged in a delinked fashion. Hence, it becomes more susceptible to tampering. Also, the process of tying a person’s details to his signature becomes highly complicated and cumbersome leading to further meddling with data. Lastly, the use of audit logs for an electronic signature is highly subjective and cumbersome.

12. Quality of Standardization

A digital signature uses a highly advanced form of standardization known as Public Key Infrastructure (PKI). PKI is the basic mechanism used to create encrypted digital certificates to be used for an authentication operation. The creation of both a private and public key by the sender ensures that there is a foolproof end to end data transmission.

On the other hand, in case of an electronic signature, the authentication does not come with complete fool proofing. The keying mechanism is not at an advanced stage as compared with the digital signature. Hence, in the e-signature vs digital signature debate, an electronic signature is prone to third-party meddling at different stages of its operation.

The table below will give you a quick look at the differences between a digital signature and electronic signature i.e. digital signature vs electronic signature

Digital Signature vs Electronic Signature

Parameter

Digital Signature

Electronic Signature
Purpose of Use Digital signature is used to secure a document. An electronic signature is used to verify a document.
Types On the basis of document processing platform, a digital signature is of two types - Microsoft and Adobe pdf. An electronic signature is of four types - basic electronic signature, click-to-sign signature, advanced electronic signature, and qualified signature.
Regulation A digital signature is regulated by the certification authority. Some national acts and regulations are applied to the electronic signature to validate it.
Authorization Digital signatures are authorized by the government or non-government certification provider authority Electronic signatures are authorized by the specific vendors, document creator or the participating parties.
Intention The main intention of using a digital signature is to secure the document. The main intention of using an electronic signature is to verify the document.
Security A digital signature is comprised of more security features, so it is more secure. An electronic signature is comprised of less security features, so it is less secure.
Verification A digital signature can be verified to authenticate the original author. As the electronic signature is not certified, it is difficult to check and verify the owner of the document.
Signatory Details A digital signature can be used to get the details of signatory details as it is associated with the signature itself. The details of the signatory are not held with the electronic signature but can be held separately to the signature.
Audit Logs Digital signature generally holds the audit logs and helps to track when the changes are made in the document. It is difficult to apply audit logs with the electronic signature. But some electronic signature solutions may provide this.
Time-stamped Digital signatures are always time-stamped i.e. have a date and time associated with the digital signature. Electronic signatures can be time-stamped which is very good for the legal binding. It will tie the signature with date and time in legal formalities.
Reliability Digital signatures are more reliable as these are more secured and not susceptible to tampering. Electronic signatures are less reliable as these are less secured and may be susceptible to tampering.
Quality of Standardization A digital signature uses a highly advanced form of standardization known as Public Key Infrastructure (PKI) The keying mechanism is not much advanced in case of the electronic signature.

Way Ahead? – Future of Electronic Signature and Digital Signature

So, here we have reached the end and understood that the terms digital and electronic signatures are used interchangeably but these are actually different. The electronic signature is an electronic or say digital form of the handwritten signature with a legal binding.

On the whole, digital signature and electronic signature has offered a new lease of life to businesses and governments alike. From the developed to the developing world, automation has been bringing in a new wave of change. Be it signing of business contracts or G2B or G2C transactions, electronic and digital signature has aided and abetted its growth.

On the basis of the type of document and considering the above differences between electronic signature and digital signature, it is generally decided which one to be used. So, understand the differnece by going through digital signature vs electronic signature and make a right choice for your document.

Posted by Brian Felix, 0 comments