If you’ve submitted documents online in the past several years, you may have signed your name electronically. This practice has become increasingly common as businesses gradually move their recordkeeping processes online. That said, electronic signatures (e-signatures) aren’t a match for every business.
Explore the differences between wet signatures and e-signatures, the benefits of e-signatures, and whether e-signatures can work for your applications.
There are two main kinds of signatures: wet signatures and e-signatures. Here’s a closer look at how they differ, which mostly lies in how easy the verification process is.
These are physical signatures you make on paper with a pen. These signatures are a representation of the signer’s identity and acknowledgment of the document they’re signing. A person might physically sign the document and send it back to the recipient in the mail or sign it in the presence of certain individuals.
When you sign a physical document, the recipient must trust that you’re the right person. While the recipient can verify the signer’s identity when they provide them with documentation such as a driver’s license or Social Security card, it’s tricky to do so unless the signer and recipient are in the same room. Furthermore, signers must trust that bad actors aren’t forging their signatures.
An electronic signature serves the same purpose as a wet signature – it represents the signer’s identity and acknowledgment of the document they’re signing. This kind of signing happens online and is legally binding in most cases, just like a wet signature. An example would be signing an apartment lease through the property management website’s portal.
This kind of signature is much easier to verify. An electronic signature is linked to the signer’s name, computer, email address, and IP address. This information makes it simple for recipients to track who signed what and when. If a bad actor attempts to impersonate you, it won’t take long to follow the digital trail and find out who it was.
Note that many people use the terms “electronic signature” and “digital signature” interchangeably. These signatures aren’t the same.
Digital signatures are a more secure version of electronic signing that involves a digital certificate and public key infrastructure (PKI). These kinds of signatures are an essential part of certain online security processes, but electronic signatures are what you use when signing documents online, not digital signatures.
The main advantage of electronic signatures is that they’re more secure than wet signatures. These signatures provide increased authenticity and make it less likely that someone will attempt to forge a signature. Even when that happens, it’s not as much of an issue as it’d be with a wet signature, as the forgery is typically easy to track.
There are several technological layers to electronic signatures. At a minimum, your signature will be linked to your unique device and signing certificate password. For increased security, you can require two-factor authentication (2FA) and other verification processes. The resulting digital trail gives signers greater peace of mind and recipients know what to do to verify signers’ identities.
When businesses heavily rely on signatures for various documents, e-signatures provide a secure and accessible way for customers and clients to approve said records.
While e-signatures are often more secure than wet signatures, businesses can still encounter issues when they use them. The security of an electronic signature lies in your hands. If your organization mishandles the data associated with the e-signatures you have on file, you can experience many problems, including:
- Intellectual property loss: Because customers and clients trust you with their data, it’s crucial to keep it safe. This factor is important for reputation and legal reasons. If you fail to properly manage the electronic signatures you receive, you could experience repercussions from the public and the law.
- Decreased productivity and flow: When an employee accidentally deletes or misplaces data such as e-signatures, it affects your entire business’s productivity and flow. Once that happens, you’ll have to set aside time to recover what was lost and communicate what happened to the relevant individuals.
- Financial loss: In some cases, data-loss issues translate to financial problems. When customers and clients learn about what happened, they may choose to take their business elsewhere. As a result, you miss out on sales.
These problems are a few examples you may encounter when using electronic signatures.
Like any new feature you introduce to your organization, you’ll want to weigh the pros and cons before you become fully invested. In general, e-signatures have many advantages, so long as you have a plan in place to manage and process them properly.
Ultimately, know that in most cases, your business can benefit from implementing e-signature software. As a result, your customers and clients will have a safe and easy way to sign a variety of documents, whether coffee shop receipts or non-disclosure agreements.
Investing in a secure electronic signature platform will boost your chances of success. When conducting your research, be sure to compare software options so you know which ones are the most secure, meet your needs, and match your budget.
After you choose a platform, make sure your staff members know how to use it properly. If you have an information technology (IT) department, have them guide the training for relevant employees. This way, they’ll know how to correctly manage the data, reducing the risk of errors.
Many organizations are moving away from wet signatures and implementing e-signature software in their place. This kind of approach can make it easier for your company to collect signatures for a variety of applications without having to worry about paper and pens. When you have the right approach in place, e-signatures can be an effective solution.