My wife and I bought a car together recently on a sort of whim. We went to a Toyota dealership on Saturday night, test drove a couple of vehicles, then got reeled right into the one we wanted, trading in our old vehicle on the spot.
If you've never spent a Saturday night sitting there signing paperwork I highly recommend you DON'T try it... it's as tedious and dull as it sounds (but the car itself is great!)
That got me thinking.Times have changed from the days of filing cabinets stuffed with papers, relying on the post office for sending or returning critical documents, and conducting face-to-face meetings to get things done. One thing that hasn't changed, however, is the requirement for involved parties to sign important contracts or documents to carry out critical business transactions.
As society has gone digital paper is becoming obsolete, not to mention the methods that transmit it (or its contents). Using the post office or even fax machines to send mission-critical material for required signatures has grown cumbersome and unnecessary. Furthermore, the sequence of steps required to email a file, print it, sign it, scan it, and email it back to the sender adds delay and overhead to urgent operations that need to be concluded as soon as possible. There is also no guarantee that paper documents haven't been changed after being signed and sent off, nor is it always easy to prove the identity of the signer.
Enter the digital (or electronic) signature, a way for companies to rapidly obtain authorizations or approvals, allowing them to conduct business more efficiently and spend less time on mundane tasks like stuffing envelopes and typing address labels. In fact, a 2012 Linkedin article by Steve Anderson states that "Using electronic signatures could save billions." I wish I could have used a digital signature that Saturday night, rather than wearing out my hand signing endless forms while my stomach rumbled.
What is a digital signature?
A digital signature is an electronic signature that can be used to authenticate the identity of the sender of a message or the signer of a document, and possibly to ensure that the original content of the message or document remains unchanged. Digital signatures are easy to use, cannot be imitated by someone else and can automatically time-stamp documents. The ability to ensure that the original signed message arrived and was processed via a documented chain of activities helps to ensure the integrity of the process; a proven electronic trail shows the history of actions taken by the sender and recipient in signing the involved forms.
Digital signatures are flexible and can be used on all manner of devices: PCs, laptops, tablets and smartphones. They can also be embedded in applications that might require a higher level of security to provide authenticity and trust.
What are some examples of digital signatures in use?
Let's say you want to fill out an application for an auto loan and apply a digital signature. The car dealership can upload or create the forms on a website which offers digital signature services for businesses and consumers. One such example is eSignLive, which I've chosen to use as a sample organization for this discussion (there are also many other options besides eSignLive such as RightSignature, Docusign and Hellosign).
Once the form is ready, EsignLive will send you an email containing a link to open the form and add your digital signature:
Once you click the link the form opens in your browser (no special software or plug-ins are needed).
The signature icon in the lower left (with the red "2") signifies the number of places where a signature is required in the document. Clicking it takes you to the relevant sections on the form.
Click where it says "Click to Sign" and the form changes to read "Accepted":
Repeat the process for the next signature:
Once you click "Click to Sign" on the last signature field it changes to read "Accepted" then provides you with the following prompt:
Click OK to complete the process. You will see a prompt stating the documents are being secured and sealed:
Once this finishes the page will show the document was e-signed and provides the date and the name of the signer.
You will then receive an email containing a link to download the form:
You can download the form as a PDF file. Each time you open it the document will verify that the signatures are valid and show you the document status at the top:
In this case, the document shows that it has been signed and all signatures are valid. Adobe also indicates it is a secure document by adding the word SECURED to the title. Clicking the "Signature Panel" option reveals further details about the digital signatures associated with the document, assuring the signer's identity and stating that the document hasn't been changed since it was signed:
You can try this process out for yourself using the eSignLive quick demo feature which offers an array of sample forms.
How do digital signatures work?
In the above example shown with eSignLive, the sender creates the form and uploads it either to an on-premises (private) server or a server on the internet (public) - eSignLive provides both options to meet the needs of their customers, who may require in-house digital signature services. Special software creates an algorithm of the document which serves as a unique identifier. This algorithm is known as a message hash which is a mathematical summary of the form. The form is then encrypted and the encrypted hash becomes a digital signature of the message (note that this changes with each form or message).
The recipient is then sent an email providing them a link to access the form. In order for them to do so they must first log in to access the server using an account in their name. They can then add the digital signature as shown above and these actions are documented as part of an audit trail. The form is either then finalized and ready for distribution or it is passed along to the next step (for instance, further signatures from other parties may needed and so the next notification is sent out) until the process is complete.
How can you trust a digital signature?
At first glance the process may seem odd; you might think that you're not actually signing anything since you're just clicking on fields! However, you ARE approving the electronic document using your identity. So, while the signature on the form might not resemble the one you create with a pen in your hand, it constitutes the same thing - confirmation on your part that you agree to the details listed on the form.
The digital signature process records every update made to a document and verifies the change was made by each person involved. Signatures on the form cannot be forged, altered or copied. With eSignLive, the identity of the signer is established by the account they use to log in, confirming they are who they say they are (of course, using strong passwords which are stored securely is a critical safeguard). Digitally signed forms are more trustworthy than paper-based forms which may be edited or altered after being signed.
Are digital signatures considered legal in court?
Yes. These have been considered reliable for years now, thanks to the Electronic Signatures in Global and National Commerce (E-SIGN) Act of 2000 which stated that a contract or signature "may not be denied legal effect, validity, or enforceability solely because it is in electronic form," which establishes electronic and paper signatures as equivalent. Many institutions including the U.S. Army and the U.S. General Services Administration rely upon them as part of their day-to-day activities.
Where might digital signatures not be a good fit?
Digital signatures are used for a wide array of options; credit applications, insurance forms, contracts, mortgages and more. However, traditional paper-based forms might be needed in some circumstances where notarization is required; after all, a notary public can't verify you signed a document electronically unless they are there to physically witness it. However, many digital signature services offer paid e-notary services which may meet requirements. It's important to keep in mind that the driving principle behind digital signatures - identity verification - can obviate the need for notarization so signature requirements may continue to evolve accordingly.
Where can I find out more?
ESignLive offers a collection of resources discussing digital signatures including white papers, webcasts and articles. They also offer an unlimited free 30-day eSignLive tria l. Their full product versions include a professional, integrated and enterprise editions which can offer options such as forms and workflow, branding customization, transaction management, reports, dashboards and more.
Hopefully next time I buy a car the details will be conducted electronically. I look forward to the day when you can also hire electronic negotiators to haggle pricing with car salesmen, too.
Scott Matteson is a senior systems administrator and freelance technical writer who also performs consulting work for small organizations. He resides in the Greater Boston area with his wife and three children.