Despite the fact that digital signatures have been around for some time, a perceived haziness around the legality of signing documents in this way has so far hindered widespread adoption.
This lack of clarity in the law has discouraged some organisations from implementing electronic documents, especially smaller businesses that don’t have access to the same level of legal expertise as their larger competitors.
However, following the Law Commission’s recent ruling that e-signatures can now be treated as equivalent to written ones, the supremacy of the traditional handwritten signature could finally be coming to an end.
This announcement means any and all documents can now be legally signed by typing a name or even simply clicking an “I accept” button. From business contracts, to credit agreements and land sales, any legal ambiguity around electronic signatures has effectively been removed, providing a much-needed boost to the process of how consumers and businesses work with one another.
So, as adoption continues to grow, what exactly are the key advantages of e-signatures and why should organisations in all industries be ready to embrace an electronic future?
In a nutshell, the use of electronic signatures allows business processes to be fully digitalised, thereby eliminating the need for documents such as contracts to be signed, transported and filed in paper format.
Instead, these documents can be sent to the relevant parties via email, or distributed securely through cloud-based file-sharing services.
For businesses, this can drastically reduce operational costs – by enabling them to save money on paper, postage, mailing supplies etc. – as well as saving a significant amount of time. E-signatures streamline and accelerate the entire contract process, providing a much faster turnaround time for everyone involved.
They are also much more convenient. No matter their size or industry, businesses today operate in a geographically dispersed world, with customers, partners and suppliers frequently located in multiple different countries. Electronic signatures are therefore a much more convenient method of authentication than the paper-based alternative.
Then we come to the issue of security. This has traditionally been a major barrier to the adoption of electronic signatures, with businesses worried about an increased risk of fraud or breach of confidentiality. However, with identity and authentication issues taking centre stage, they are actually safer and more secure than traditional paper documents.
Modern e-signing platforms incorporate a range of features designed to minimise the risk of fraud. For example, they typically collect signatories’ IP addresses and GPS coordinates, making the resulting document much more enforceable than a document that has been sent by post.
If this isn’t enough, there are further ways of optimising e-signature technology to ensure customers in transactions are who they say they are. These could include using a multifactor authenticator bound to their identity, a webcam or video links for documents that require witnessed signatures, or a platform that the signatory and witness are able to sign in to from different locations, thereby boosting the potential of electronic signatures even further.
Enabling the future of business
The afore mentioned productivity and efficiency benefits of e-signatures are well known among industry stakeholders,providing a huge amount of value to forward-thinking organisations.
The issue is that a reluctance to replace paper processes has often got in the way of widespread business adoption. What’s more, the conversation is often side-tracked by a focus on the technologies underpinning digital signatures, or treated as something for the IT department to grapple with.
To overcome this hesitancy, businesses have to look at the bigger picture and be prepared to transition from conventional methods to a modern way of working.
E-signatures don’t only bring speed and simplicity to the process of signing contracts, they also bring transparency, a greater level of security and an improved user experience. That’s why they will play a vital role in the future of business – as long as organisations are brave enough to take the plunge and move away from slow, paper-based processes.
Ultimately, e-signatures are the future and simply can’t be ignored by any organisation looking to stay ahead of its competitors in what is becoming an increasingly paperless world. Any doubts around their legality have been removed by the Law Commission’s recent ruling.
Michael Magrath, director, global regulations & standards at OneSpan is responsible for aligning OneSpan’s solution roadmap with standards and regulatory requirements globally.
Global Banking & Finance Review
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