In this tech-insight, we look at what e-signatures are, their benefits plus some of the main e-signature providers, as well as what to consider when choosing an e-signature service.
Popularity of E-signatures
The initial growth of e-signatures happened in the early 2000s, due to the passage of laws such as the US Electronic Signatures in Global and National Commerce Act (ESIGN) in 2000 and the European Union’s Directive 1999/93/EC on a Community framework for electronic signatures. These laws established the legal framework for the use of e-signatures, providing them with the same legal status as handwritten signatures under certain conditions.
Further Growth During COVID-19 Pandemic
The adoption of e-signatures accelerated in recent years, fuelled by the digital transformation of businesses and the need for remote work solutions during the COVID-19 pandemic. The physical distancing measures and the shift to online operations made digital processes essential for continuity in business, legal, and educational activities.
To give an idea of the size of the growing e-signature market, in 2020, Deloitte reported estimates that the market reached between USD 2.3 and USD 2.8 billion and was projected to grow further into a USD 4.5-5 billion market by 2023 and over USD 14 billion by 2026.
The Difference Between Electronic Signatures / eSignatures
Electronic signatures (eSignatures) and digital signatures are both methods used to sign documents electronically, but they serve different purposes and operate based on different technical frameworks.
E-signatures
An e-signature is simply a broad term referring to any electronic process that indicates acceptance of an agreement or a record. This can be as simple as typing your name into a contract online, checking a box on a web form, or using a stylus or finger to sign on a touchscreen. E-signatures are meant to replace handwritten signatures in virtually any process, thereby providing a convenient and legally recognised way to obtain consent or approval on electronic documents.
Digital Signatures
Digital signatures, on the other hand, are a specific subset of e-signatures that use cryptographic techniques to secure and verify the identity of the signer and ensure the integrity of the signed document. A digital signature is created using a digital certificate issued by a trusted Certificate Authority (CA) and provides a higher level of security than a basic e-signature. It doesn’t just verify the identity of the signer but also ensures that the document has not been altered / tampered with after signing.
The key differences between electronic and digital signatures are:
– The level of security. Digital signatures provide a higher level of security through encryption and authentication, ensuring the integrity and non-repudiation of the document. E-signatures, while secure, do not inherently include these cryptographic measures.
– Verification. Digital signatures verify the signer’s identity through digital certificates, whereas e-signatures may not have a robust mechanism for identity verification.
– Legal and regulatory compliance. Both e-signatures and digital signatures are legally binding in many jurisdictions around the world. However, certain documents or transactions may specifically require the use of digital signatures for added security and compliance with regulatory standards.
The Benefits
E-signatures offer a number of benefits compared to traditional paper signatures. These benefits include:
– Reduced turnaround times because arranging to physically meet up or rely on postal service is not required (thereby streamlining the process).
– Lower costs associated with paper-based transactions, i.e. no need for printing, paper, ink, postage, shipping, and storage of physical documents, or for office space dedicated to storing paper documents.
– Convenience and enhanced customer experience by facilitating easier, faster, and more secure transactions. For example, e-signatures can be obtained from anywhere, at any time, using a computer or personal mobile device thereby eliminating the need to physically meet or to scan or mail documents for a signature (significantly speeding up the process of signing agreements or forms).
– Speed. For example, documents using e-signatures can be sent, signed, and returned in minutes rather than days or weeks, reducing turnaround times for contracts, approvals, and other processes.
– Security. This is because e-signature solutions often come with security features like encryption, audit trails, and tamper-evident seals, making them more secure than paper documents, which can be easily lost, damaged, or tampered with.
– Accuracy and compliance. E-signature platforms can enforce the completion of all required fields in a document before it can be signed, reducing errors and omissions. They also help in maintaining compliance with laws and regulations by ensuring that the process of obtaining signatures follows legal requirements.
– Environmental benefits from the reduced reliance on paper, such as conserving resources and reducing the environmental impact associated with paper production, printing, and waste.
– Legality and acceptance. The adoption of laws and regulations globally means that the legal validity of e-signatures is now recognised, plus they’ve have become widely accepted as a legal means of obtaining consent or approval on documents.
– Global reach. E-signatures make it easier conduct business internationally by allowing documents to be signed across borders without the need for physical presence, overcoming geographical and time zone barriers.
– E-signature solutions also typically provide detailed audit trails, recording each step of the signing process, including who signed the document, when, and where. This enhances transparency and can be crucial for legal and compliance purposes.
Examples of e-signature Providers
Some examples of popular e-signature providers include:
– DocuSign. The global market leader in electronic signatures (75% share), DocuSign offers a comprehensive e-signature solution that is widely used in the UK. It provides a secure and easy way to sign documents online, giving compliance with UK and EU regulations.
– Adobe Sign. Part of the Adobe Document Cloud, Adobe Sign is another popular choice for e-signatures. Being Adobe, it integrates with other Adobe products and Microsoft Office and offers e-signature services that are compliant with EU eIDAS and other regulations.
– HelloSign. A Dropbox company, HelloSign provides a simple and intuitive e-signature service and is designed for businesses of all sizes.
– Signable. This e-signature provider is tailored to meet the needs of UK businesses, offering compliance with UK and EU laws (including GDPR).
– eSign Genie is a user-friendly e-signature solution that offers features like document management, custom templates, and bulk sending. It complies with legal standards in the UK, EU, and beyond.
– PandaDoc is document automation software. As such, it offers more than just e-signatures but includes them as part of its suite of features.
– Zoho Sign (part of the Zoho suite of online productivity tools) offers secure digital signature capabilities and (of course) it integrates with other Zoho apps. It also integrates with third-party platforms.
Challenges / Issues
There are, however, some challenges or issues with e-signature provider tools that UK businesses should be aware of before choosing a service. For example:
– Choose a provider that you know offers compliance with UK, EU (eIDAS regulation), as well as international e-signature laws to ensure legal validity.
– Make sure the service you choose has robust security that can protect against unauthorised access, tampering, and fraud, and which includes encryption and authentication methods.
– It’s easier to use e-signature tools that seamlessly integrate with existing business systems to avoid workflow disruptions.
– Make sure adequate training and support are available for employees (and clients) on the use of your chosen service.
– Take into account the ‘total’ costs (especially for SMEs), i.e. include subscriptions and potential additional fees.
– Make sure that the e-signatures provided by your chosen service are recognised and legally binding in all jurisdictions where your business operates.
– Ensure GDPR and UK data protection law compliance, focusing on personal data safeguarding.
– Assess the provider’s platform reliability, support services, and uptime guarantees.
– Choose a solution that can grow with your business (i.e. make sure it’s scalable), to accommodate increasing demands.
– Ensure the tool/service you choose offers comprehensive audit trails and secure document storage for legal and compliance purposes.
What Does This Mean For Your Business?
In the evolving digital landscape, UK businesses are finding that adopting e-signature technology is not just an option but a necessity for staying competitive and efficient. The transition from paper-based to digital processes, accelerated by global events like the COVID-19 pandemic, has underscored the importance of e-signatures in ensuring business continuity, enhancing operational efficiency, and reducing costs. E-signatures streamline transactions, ensure security, and offer the flexibility to conduct business remotely, making them a pretty much indispensable, and helpful tool in today’s digital economy.
For UK businesses contemplating e-signature solutions, the choice of provider is crucial. It’s essential to select a service that not only complies with UK and EU laws, including the eIDAS regulation and GDPR, but also offers robust security measures to safeguard against fraud and tampering. The integration capabilities of the e-signature solution with existing business systems should also be a consideration to help minimise disruption and to enhance user adoption.
While e-signatures have many benefits, businesses should be aware of the need to navigate challenges such as legal compliance, data privacy, and the cost of implementation. These challenges, however, are surmountable with a bit of research, planning, and the selection of the right e-signature provider. The importance of e-signatures is set to grow, driven by their legal acceptance, global reach, and the continued digital transformation of industries.