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Everything you Need to Know About Electronic Signatures

Posted 30th March 2022

If you’re a business owner, you’ll probably have heard of electronic signatures. Despite the recent surge in electronic sigantures, many businesses haven’t made the switch yet. At E-Sign, we think that every business should have an e-signature in its digital toolbox.

That’s why we’ve pulled together this guide on all things e-signatures. If you’ve always wanted to know how e-signatures work, the legalities behind them and the benefits of going digital, keep reading. We’ll be discussing everything you need to know and more.

 

What Is an Electronic Signature?

A signature is a traditionally handwritten and often unique depiction of someone’s name. An e-signature can be a typed or drawn version of a name, with some types of e-signatures recording additional  information such asIP address and time and date stamp.

Much like a pen and paper signature, an e-signature indicates the signer’s intent to agree to the contents of the document or a set of data to which the e-signature relates. They are used in a legal and business capacity to indicate agreement.

 

Are There Different Types of Electronic Signatures?

Yes, there are three different types of electronic signatures, which vary in security and complexity. Let’s take a closer look at the different types available.

  • Simple electronic signatures – can be a tick box plus declaration and scanned signature
  • Advanced electronic signatures – can identify the signatory, uniquely link the signature to the signatory and are linked to data that can detect any changes made.
  • Qualified electronic signatures – an advanced electronic signature that is created by a qualified electronic signature creation device and based on a qualified certificate for electronic signatures.

All of the above are legally binding, but advanced electronic signatures and qualified electronic signatures offer greater integrity, authentication, and non-repudiation, and are therefore more suited to higher value transactions, legal matters and business documents.

 

How Does E-Sign’s E-Signature Work?

Electronic signatures link the signer to the document, recording the transaction via a coded message through Public Key infrastructure (or PKI) protocols. PKI protocol uses a mathematical algorithm that produces a public and private key for each document transaction.

The mathematical algorithm then acts as a cypher, generating data that matches the signed document, or a ‘hash’, and encrypting that data as an advanced electronic signature.

When someone e-signs a document, the signature is created using the signer’s private key. When sent via the E-Sign platform, the signer uses the public key to decrypt the signature via a cypher. If the hash values are equal, then the signature is valid.

It sounds complicated but this process links the e-signed document to the signer, creating a digital record of the signing process and providing a level of trust and assurance that the transaction is legitimate and valid.

 

Are E-Signatures Legal in the UK?

Yes, electronic signatures have been legally binding in the UK since the Communication Act 2000. From July 2016, the UK followed the EU’s eIDAS regulations, which provides a regulated framework for secure electronic identification and verification across Europe. In September 2019, the Law Commission also published a detailed report on the legality of electronic signatures in demonstrating ‘intention’ to agree to the contents of the document. Despite leaving the EU, the UK Government incorporated the eIDAS rules into UK law and recognises the eIDAS as the general legal framework for electronic signatures.

 

Are Electronic Signatures Secure?

Advanced electronic signatures and qualified electronic signatures are considered secure. When it comes to signatures, electronic or ink, businesses must be careful not to fall victim to fraud or dishonesty. Electronic signatures can help to manage the risk of fraudulent activity by providing a full audit history documenting the author, signers, devices used, IP addresses, time and date stamps for traceability and transparency.

Sending out sensitive documents via the post for signing isn’t necessarily secure. Keeping documents digital allows you to send things like contracts and agreements via email, with many providers, like E-Sign, offering options to enable SMS authentication and password protection on your documents.

 

Who Can Use Electronic Signatures?

Anyone who needs to sign or send a document for signing can use an e-signature. They’re particularly useful for business owners and employees who need to sign documents, contracts, and agreements as part of their business operations.

E-signatures are generally user-friendly and can be used by anyone with basic computer skills. If you can use Microsoft, you’ll be able to get to grips with using e-signatures and managing digital documents.

 

Which Documents can be Signed with Electronic Signatures?

Most documents can be signed using an e-signature. Let’s take a closer look at some of the specific industries and documents that can be signed:

  • Accountancy- employment contracts, engagement letters, confidentiality agreements, tax returns, fee letters.
  • Education- financial aid, grant requests, student loan applications agreements, offer letters, HR documents, ID documents, course enrolments, permission slips, timesheets, change-of-course forms.
  • Government- e-procurement and e-tendering, project management forms, HR and personnel forms, departmental agreements, payroll and finance processes, procurement and vendor agreements.
  • Healthcare-patient records, audit and compliance processes, medical forms, prescriptions.
  • Insurance- policy applications, claims processing, renewals, adjustments.
  • Legal- retention & fee agreements, asset purchase agreements, confidentiality agreements, power of attorney agreements, shareholder agreements, mergers and acquisitions.

 

Which Industries Can Benefit Most From Using E-signatures?

Sectors that process a lot of signed paperwork will probably benefit most from switching to an e-signature. If your business signs and collects signatures as part of your daily business operations, an e-signature could help to save paper, improve efficiency, and reduce document turnaround time.

For example, a UK 100 law firm adopted E-Sign’s e-signature. Over 12 months, the Law Firm made the following savings:

  • Approximately 4 million sheets of paper saved
  • £11,740 saving on paper procurement
  • £105,000 saving on printing costs
  • 8,258 CO2e in carbon emissions
  • 30-50% increase in process productivity
  • 3-to-10-fold reduction in turnaround time

 

What Are the Benefits of E-signatures?

Let’s look at how businesses of all types could benefit from e-signatures:

Improve Efficiency

Switching between digital and paper documents is unnecessary and time-consuming, adding extra steps into your workflow such as printing, scanning, and posting. By adopting an electronic signature, you can easily create, sign, and send out digital documents in just a few clicks, allowing you to improve operational efficiency and save time on managing documents and e-signature collection.

Save Money on Paper

The cost of collecting signatures and processing paper documents can all add up, especially if you rely on documents and signatures to get business done. By using digital documents and electronic signatures, you can eliminate spending on paper, envelopes, stationery, and postage, as well as the money spent on printer ink, toner, and the maintenance costs of this equipment.

Embrace Hybrid and Home Working

Not all your employees will have a printer or scanner at home; using traditional signatures may therefore not be viable if your employees need to work away from the office. If your business is looking to offer hybrid or home working options, adopting a digital signature provides the software your employees need to sign and generate digital documents at home, allowing them to continue working effectively from any location.

Boost Document Security

Using a traditional signature can mean that you’re sending out sensitive contracts or documents in the post or arranging time-consuming in-person meetings to collect your client’s signature. Using an advanced or qualified E-Signature ensures you can collect signatures whilst managing the risk of fraud. Most providers will also offer expert cybersecurity, as well as extra protective measures, to ensure your documents don’t fall into the wrong hands.

Enhance Customer Experience

Using electronic signatures and digital documents not only brings benefits to your business but also to your clients. Paper-based processes can be time-consuming for your signers; if it’s not an editable document they’ll have to print, sign and either scan or post the document. Keeping everything digital ultimately makes life easier for your clients, enabling them to view, e-sign and return your documents in just a few clicks.

Are E-Signatures the Future?

Here at E-Sign, we believe that e-signatures are the future. The way we work and live is moving increasingly online and paper-based processes are no longer the most efficient way of carrying out business. If your business is looking to futureproof your operations, adopting an electronic signature should be a top priority for your business.

Keeping your documents digital will also allow you to add other time-saving technology into your processes such as automation and integration. In this sense, electronic signatures and digital documents can help form the foundation for future digitisation.

 

Are You Looking For an Electronic Signature?

If you’re looking to adopt an e-signature, find out more about E-Sign. Try our e-signature and document management platform for free. With no payment details, downloads, or software to install, you can start benefiting from an e-signature today.

User-friendly Platform

Our user-friendly platform makes adopting an electronic signature and digital documents easy, empowering employees to embrace your new digital processes.

Digital Toolbox

With our digital toolbox on the case, you’ll have everything you need to create and manage your digital documents and business transactions.

Integration Capabilities

E-Sign is API-enabled and has a range of pre-set connectors, so you can create a bespoke digital environment to power your processes.

 

 E-Sign is a leading provider of digital transaction management solutions, supplying professional services including Electronic Signatures, Web Forms, ID Checker, Verification Tools, Personalised Emails, API and Payment Processing to businesses of all sizes across the UK.

To find out more about our E-Sign solutions and how they could transform your business, get in touch with us today.

 

 

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