The COVID-19 pandemic catalyzed digital transformation across the enterprise. Face-to-face transactions were no longer feasible, and organizations needed solutions to move forward with digital operations.
With this rapid digitization of workflows across enterprises, the adoption of eSignatures saw a dramatic increase. In 2020, P&S Intelligence found that the estimated growth rate of the eSignature market was 39%, while research from Deloitte revealed that the pandemic’s impact on the way of doing business made the eSignature market one of the fastest growing in the world.
But what exactly qualifies as an eSignature, and how do they work? There’s been some confusion on the topic recently, specifically around what constitutes an eSignature and what the signing process entails – so let’s dive in.
Senior Vice President and General Manager for Digital Agreements at OneSpan.
What is an eSignature?
At the most basic level, eSignatures are legally binding and operate the same as traditional, handwritten signatures. The main difference between the two lies in the medium through which the document is signed. Both forms of signature stand as a lasting record of the signer’s intent, typically expressed as the intent to abide by the terms within the agreement. For instance, when you buy a car, loans and contracts must be signed; these documents can be signed in person with a handwritten signature or remotely via eSignatures.
With all this in mind, it’s important to understand the difference between eSignatures and digital signatures – because these terms are not interchangeable. As said before, an electronic signature is, like its paper equivalent, a legal concept. However, digital signatures are a type of eSignature that is built on encryption/decryption technology. Digital signature encryption secures the data associated with a signed document and helps verify the authenticity of a signed record.
The digitization of our world is driving the adoption of eSignatures. They are inherently more convenient when compared to handwritten signatures given the time and resources it saves for everyone involved in a transaction. For example, one leading P&C provider struggled with a traditional process that was operationally inefficient and costly. After adopting eSignatures, they streamlined their application paper process from 52 days to 10 minutes. Additionally, they saved $10 per transaction, $200,000 in hard cost savings (in just 5 months), and $500,000 in labor costs.
How do eSignatures work? What do they offer?
eSignature offerings vary based on the provider, but most solutions cover anything from document creation to ID verification to transaction reporting. An eSignature solution can also strengthen compliance and lower the cost associated with paper-based documents (including paper, sometimes postage, ink, toner, physical storage cabinets, etc.).
Depending on the eSignature provider, benefits may vary, but most organizations will have similar offerings including:
Signer Identity Assurance: Access to a broad range of identity verification and authentication options to ensure signers are who they claim to be before providing access to documents.
Easy Integrations: Integrations for e-signing and workflow capabilities into the app or website with open API and fully supported SDKs.
Security: Protection of users and electronic documents against fraud with digital signature encryption. This tamper seals documents after each signature and visibly invalidates documents if any changes are made. Enhanced Compliance: Verification of the validity of the signed document and comprehensive end-to-end audit trails in the market.
Process Efficiency: Digital transactions to streamline processes and eliminate risks associated with document errors, such as missing signatures and data.
Secure Digital Storage: E-vault that can preserve the integrity of signed documents during the lifetime of the agreement.
Considering secure digital transactions
With more transactions happening online than ever before, organizations must be mindful of the evolving threat landscape. Since May 2020 alone, the number of phishing attacks has tripled and increased 65% over the previous yearly study period. Moreover, deepfakes and other forms of synthetic media are becoming more sophisticated. Even though eSignatures have streamlined operations, without the proper security in place, the document, signing workflow, and signer are all at risk. Securing online transactions has never been more crucial, which is why organizations should focus on investing in reliable eSignature solutions. But what should they look for in a provider?
The bottom line is that when looking for a solution to manage your signing processes, it’s important to ensure that it is built on digital signature technology to guarantee the document’s integrity and underlying signatures. White-labeling is also something to look for in a provider. This term refers to adding an organization’s logo and customizing the email content/sender domain to reflect the organization’s brand. A fully branded transaction reinforces customer trust and ensures you achieve the highest adoption rates.
Conclusion
Signatures have come a long way since in-person document signing and will only continue to evolve and become more unconventional – only time will tell. However, one thing is certain: the eSignature market is embracing secure experiences that ensure the integrity behind digital transactions and agreements. They have already begun to move into the realm of a strategic asset to support organizations’ digital processes.
That said, it’s possible to have these secure transactions without sacrificing customer experience. When it comes to choosing an eSignature vendor, identity verification and authentication need to be integrated into the solution to protect the parties involved in a transaction.
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