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What Is an Electronic Signature? Benefits, Examples, and Uses.

electronic signature

Want to learn more about electronic signatures? You’ve come to the right place. This article covers everything you need to know about electronic and digital signatures, their legal standing in the United States and beyond, the types of documents you can use them for, and their benefits. By the end, you’ll understand why the global e-signature market is skyrocketing, forecast to reach nearly 27% CAGR from 2021 to 2030.

Here’s what we’ll cover:

Let’s dive in!

Electronic Signatures and Digital Signatures. What’s the Difference?

The terms electronic signature and digital signature are often used interchangeably. But they’re not (quite) the same thing. While a digital signature is always an electronic signature, the reverse isn’t always the case. Let’s find out why.

What Is an Electronic Signature?

An electronic signature is a catch-all term for any method of signing a document electronically. This could be as rudimentary as simply typing your name, adding a symbol, or superimposing a scanned image of a signature onto a document. An electronic signature indicates the signer’s intent to sign the document. Nothing more.

What Is a Digital Signature?

A digital signature is a specific, more secure type of electronic signature. It ensures the authenticity and integrity of a signature and the document to which it’s applied. It’s a fast, flexible, and user-friendly alternative to pen-on-paper and requires no technical know-how from the user’s perspective.
In straightforward terms, a digital signature uses a type of encryption called public-key cryptography, which involves the use of two keys: a public key and a private key. The sender uses their private key to encrypt the document, and the recipient uses the sender’s public key to decrypt (and verify) the document.
The public key is bound to an individual or organization’s identity using a digital certificate issued by a trusted third party (a trust service provider or certificate authority). The recipient can use the certificate to verify the sender’s identity and confirm the public key belongs to the sender. The recipient can check the certificate’s digital signature from the certificate authority to verify that the certificate is valid and has not been revoked.
The last key component of a digital signature is the document’s hash–a unique code representing the document’s contents. If the document is altered, the hash changes, making it easy to detect if somebody has tampered with it

What Is a Trust Service Provider (TSP)?

A TSP is an organization responsible for issuing, managing, and revoking the digital certificates discussed above. They’re typically licensed, regulated, and frequently audited by government institutions or industry bodies to ensure they meet the highest standards for security, reliability, and trustworthiness.
TSPs play a pivotal role in providing trust for electronic transactions and are fundamental to the growth of electronic signatures and the broader digital economy.

Are Electronic Signatures Legally Binding?

Short answer: yes!
In the United States, the Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) establish that electronic signatures have the same legal standing as traditional, ink-on-paper signatures.
You might be surprised to know that, as it stands, the bar for authenticating a signature is actually pretty low. This is because, when it comes to “wet ink” signatures, discerning the authenticity of the scribble on a signature block is practically impossible. Even the most rigorous handwriting and forensic analysis can come up short. Electronic signatures, backed by a digital audit trail, clear this bar by a mile.
Electronic signatures include information about the timestamp of when the document was sent, opened, and signed, as well as identifying information about the signatories, such as their names, email addresses, and unique signing identifiers. Additionally, they can include IP addresses or machine IDs to track the location and device used to open and sign the document, providing an added level of security and traceability.

How About Outside of the United States?

Outside of the United States, laws concerning electronic signatures vary by country and region. So it can be hard to keep up with what is and isn’t compliant. This is why it’s essential to partner with an established electronic signature software vendor who can ensure you never fall foul of regulatory standards.

How Electronic Signatures Work (Step-by-Step)

Chances are your team will already be familiar with electronic signatures from working with other organizations and individuals in their personal and professional lives. So with minimal training, they’ll be able to start using e-signature technology, giving your business a rapid return on investment.
To demonstrate just how easy the user experience is, here are the exact steps users take to send and sign.

Send: Select and send documents for electronic signature:

  1. Choose and upload a document: Select a document in any commonly used format such as Word, PDF, etc.
  2. Designate parties to sign: Add the names and email addresses of signers and other recipients.
  3. Indicate where to sign: Use predefined or custom fields to indicate where you need a signature, initial, or date. Specify the order in which individuals should sign if necessary.
  4. Click “Send”: Simple as that!

Sign: Quickly access and sign documents online

  • Open your email: Access the document with a single click from virtually any device. All you need is an internet connection.
  • Follow the tabs: Follow a foolproof series of tabs and instructions that guide you through the signing process.
  • Click “Done”: Congratulations. You’ve signed a legally binding agreement, and it’s only taken a matter of seconds.

What Documents Can Electronic Signatures Be Used For?

Various teams can use electronic signatures for a wide variety of documents. Below are some typical use cases.
  1. Contract Management: For contracts and supporting documents.
  2. Human Resources: For employee application forms.
  3. Engineering: For changes to drawings.
  4. Production Testing and Quality Management: For production plans and test results.
  5. Field Service: For work orders and acknowledgments of goods received at off-site locations.
  6. Medical: For granting permission or proof of acceptance of medical forms.
  7. Construction: For permits, change orders, building code approvals, and expense claims.
  8. Property Management: For inspection approvals.
Overall, it doesn’t matter which department uses electronic signatures and for what documents; digitizing the signing process saves employees time and frustration. It removes manual, repetitive, menial tasks, allowing employees to focus on more critical business matters.

What Are the Benefits of Electronic Signatures?

The most forward-thinking companies are adopting electronic signatures because of their numerous benefits. Here are a few reasons:

1. Convenience

Electronic signatures are faster and more efficient than wet-ink signatures but have the same legal standing in most countries and jurisdictions. They reduce the administrative burden on teams, letting them focus on higher-value activities.
With electronic signatures, documents can be completed and signed in seconds and returned quickly and easily online. This can be especially beneficial for time-sensitive documents and agreements, such as contracts and legal documents, where every minute counts.

2. Security

The encryption technology used in electronic signatures ensures the authenticity of signatures and documents. Unlike traditional signatures, they’re practically impossible to forge and provide a high level of non-repudiation. Both the sender and the recipient are provided with evidence, the sender with proof of delivery, and the recipient with proof of the sender’s identity, ensuring that neither party can later deny having received or sent the information.

3. Low-Cost

Electronic signatures reduce the need for paper, ink, and stamps, as well as the time and resources needed to process paper documents. Companies that switch from physical to electronic documents can eliminate 90% of their filing cabinets, reducing storage costs.

4. Sustainability

Reducing the use of paper, ink, and the transportation of documents is a more environmentally friendly way of doing business. It helps lower your carbon emissions, contributing to a more sustainable future.

5. Remote-Friendly

Electronic signatures allow for the signing of documents to be done digitally on any device, which eliminates the need for in-person meetings. They’re the ideal solution for remote-first businesses (where working off-site is the de facto option for employees) and remote-friendly organizations (hybrid environments, where employees are primarily office-based but are only required to go in on certain days.)

6. User-Friendly

Signing documents electronically couldn’t be easier. On-screen instructions and an intuitive user interface guide users through the process, ensuring the final document is complete and compliant. Inconsistencies and missing information are flagged in real-time, making errors impossible. You’ll never again wait weeks for a document to be signed, only for it to arrive with a mistake.

7. Auditable

Electronic signatures provide a clear and verifiable record of who signed a document, when, and from where (using the IP address of the signer). This creates accountability and a valuable audit trail, which is helpful for compliance, record-keeping purposes, and in case of any disputes or legal challenges.

8. Transparent

With the right tools in place, management can get a clear, real-time overview of how documents flow through the organization. From creation to signing to archival, they can pinpoint where delays are happening and optimize processes to make them run smoother. This means that decisions can be made faster and more confidently, leading to increased productivity, cost savings, and better client relationships. It’s like having a crystal ball for document workflows.

9. Collaborative

Electronic signatures enable multiple parties to sign on the dotted line simultaneously and in real time without needing antiquated physical document exchange. Senders can keep a close eye on opens, views, comments, and other customer behavior to keep everyone aligned and ensure the flow is seamless.

10. Integrated

You can drive automation, streamline workflows, and transfer documents without manual data entry by integrating electronic signature functionality into your existing systems (content management, contract management, CRM, HR, AP software, e-commerce platform, customer portal, etc.) The best thing is that you don’t have to rip and replace the systems you use already, which helps drive adoption and reduces costs.

11. Improved Customer Experience

Electronic signatures provide convenience and efficiency for your business and customers. Allowing customers to sign and complete documents quickly and easily without the risk of errors or delays leads to increased satisfaction and loyalty.
Additionally, electronic signatures signal to customers that your business can innovate and adapt to new technologies, enhancing your brand’s perceived value. A reputation as a cutting-edge business attracts new partners and top talent.

12. Data Management

Robust electronic signature software ensures that documents are saved automatically, eliminating the risk of losing progress. Senders and signers can easily access the document, check its status, set reminders and notifications, download, and print as needed. Accessibility eliminates the need for time-consuming back-and-forth communication.
With documents stored in a centralized repository, everyone can easily access the right document at the right time. No more sifting through old emails and folders, digital documents and signatures are searchable and can be compiled to produce reports that return data-driven insights.

We’re Here to Help

Electronic signatures offer a convenient, secure, and efficient way for companies to handle documents and customer relationships. At DocStar, we provide robust and user-friendly electronic signature solutions to help any company get on the right track. We have the expertise and the tools to help businesses of all sizes digitize their signature process, streamline their document workflows, and improve their bottom line. If you’d like more information, we’re here to help. So get in touch. We’d love to hear from you.


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