Digital Transformation Wiki
Find answers to all your digital transformation questions with our easy-to-use online resource.

eSignature

An electronic signature (e-signature) is a technology-driven, legal equivalent of a handwritten signature used on digital documents and data. A signature is considered electronic when it meets the legal requirements for such signatures, which typically includes that it contains some sort of indication of intent by the person signing. Additionally, with an electronic signature commonly users are able to receive copies of the document at the time they sign it.

Electronic signatures can be used on anything with a digital representation, including PDFs, web forms, and digital journeys. Many methods exist for applying these signatures which range from signing forms on a website or mobile app, to scanning a physical document with a camera or stylus.

Common uses for eSignatures

Many of the most common uses for electronic signatures are centered around simplifying, speeding up, and legitimizing business processes. Some of these examples include:

·  Creating legally binding electronic documents and digital journeys that replace paper forms. For example, a customer is required to sign a waiver electronically before participating in a ziplining activity, or a driver must sign an electronic inspection checklist before obtaining vehicle insurance.

·  Requiring electronic signatures from employees within business workflows. For example, when an employee is going through a termination process, it is often necessary for them to sign a release before their final paycheck can be released. The employee would enter their electronic signature in order to verify that they have received and consented to the content of the document.

How are eSignatures legitimized?

An electronic signature is considered legally valid if the method used to create and submit an electronic signature meets several criteria. This often includes:

  • Authentication: eSignatures must be authenticated, meaning that the claimant must have a reasonable method available to prove their identity for who they claim to be.
  • Consent: An electronic signature must contain evidence of the signer's consent to bind them legally. This is often accomplished by using a checkbox within a digital form.
  • Reliability: An electronic signature must be reasonably relied upon by the signer to accomplish its purposes. This typically means that it does not pose an undue burden on them, and that it is of a nature that they would expect to use in accomplishing the stated purpose.
  • Intent: Unlike some other types of digital signatures, electronic signatures must show evidence of intent. This allows courts to determine that a signer has knowingly and intentionally submitted their signature.
  • Unambiguity: To ensure that a digital signature is unambiguous, it should be presented in a manner that does not allow any question as to what the meaning is of the information being submitted.

Why use eSignatures?

eSignatures are quickly becoming the standard for ensuring that signatures are both authenticated, reliable, and unambiguous. There are many reasons why this is an attractive option for organizations beyond simply saving paper. Here are just a few:

Legal Compliance: A digital signature can meet legal requirements set out by government and industry regulations, and can be used as evidence in legal proceedings.

Completeness: Completing forms online is far easier than finding paper forms or piloting through paper processes. This increases completion rates, decreases errors, and saves time for both the business and the customer.

Security: eSignatures provide security benefits to both the business and the customer. For business, they are far more secure than paper methods of submission while providing authenticity verification for customers who share their information with businesses.

There are many reasons why digital signatures have become so popular in recent years. They provide simplicity, security, reliability, and legal compliance that is unmatched by traditional paper forms.

eSignature vs digital signature

Although the term eSignature is often used interchangeably with a digital signature, they are not synonymous. A digital signature provides electronic proof of authentication (who signed) as well as evidence of the signer's intent to authenticate a document (that it was signed).

An e-signature implies an actual handwritten signature on an equivalent document, which may be required in the application's jurisdiction, but most eSignatures can be converted to a handwritten signature at little cost.

Digital signatures are only as reliable as the practices used by the signer (e.g., ensuring that private key is kept secure), while e-signatures are more reliable by design.

eSignature enforcement

The topic of eSignatures is often regulated by individual governments or states. In some countries, such as the United States, no specific laws exist about eSignatures and their legal status depends on the application. In others, a combination of various laws determines a digital signature's legality for different situations.

Despite a digital signature's legal equivalence to a handwritten signature in some situations, the two are not strictly interchangeable. In 2000, the United States passed the Electronic Signatures in Global and National Commerce Act (ESIGN), which extends the definition of legal documents to include electronic signatures if all parties consent to sign digitally.

Common applications of eSignatures

  • Contracts (eContracts)
  • NDA's (Non-Disclosure Agreements)
  • NDAA's (Non-Disparagement Agreement aka NDA with an Attorney/Judicial Enforcement)
  • Copyright Registrations
  • Business Licenses
  • Leases
  • Insurance claims and FNOL applications
  • Customer onboarding

Relevant content
eSignatures: the first step to automating paperwork in insurance
The painful challenges of digital transformation in financial services
Top 26 digital transformation trends in insurance in 2022
15 ways to onboard and serve customers faster and better in 2022