What is an Electronic Signature?
Exploring the cutting-edge of signature technology
In the sci-fi TV series Star Trek: The Next Generation, Starfleet officers aboard a spaceship use alphanumeric sequences to access restricted information. Commands on the spaceship’s main computer, such as the autodestruct sequence, required that the ship’s captain give a unique password as authorization.
When the show was being written in the late 1980s, viewers may have never imagined that this space-age fantasy would become a common technology within less than 20 years.
Remarkably, computer-based authorizations have made their way into the everyday lives of people all over the world. This high-tech component to the authorization systems is what we know today as an electronic signature.
What is an electronic signature?
An electronic signature, or e-signature, along with a password is a digitized way to sign electronic documents. Electronic signatures can be used to replace handwritten signatures in virtually every traditional process.
Electronic signatures allow businesses to go paperless, cut costs, and expedite transactions. Far from the scope of intergalactic exploration, this technology is being used in concrete, everyday ways.
To find out if it’s time for your business to make the switch to e-signatures, let’s take a look at how authorizations have moved from traditional media towards fully electronic platforms.
History of signatures
Before computers, we had the traditional paper signature. This is simply when a person physically marks a document.
In the Western world, most signatures were created by using pen and ink. In Asia, signatures were historically made with a stamp, or a wax name seal.
All traditional signatures are referred to as “wet” signatures because they require time to dry.
As business technology advanced, email replaced traditional mail. Communication was instantaneous and business was moving at a faster pace than ever before.
Still, wet signatures remained the only option for business transactions and approval processes. With wet signatures slowing down business, the international community pushed for electronic alternatives.
People wanted to execute signatures on the computer, but there was one problem: without local or international standards, worries about the security of an electronic signature overshadowed the convenience of new methods.
Finally, in 1996 the United Nations published the UNCITRAL Model Law on Electronic Commerce, which put forth basic guidelines for electronic signature usage. This model law was highly influential in the development of electronic signature laws around the world.
By 1999 the EU had an in-depth legal framework for electronic signatures, which applied to 15 member states at the time and remains in place for the current 28 members.
One year later on June 30, 2000 President Bill Clinton inserted a signature card into a computer to affirm his support of legislation giving legal weight to electronic signatures in the United States. On the same day, Forbes business magazine declared that “’Sign here’ has just been replaced with ‘click here.’”
Security worries faded and business and lawmakers enthusiastically supported the idea of digital signatures. The United States E-SIGN Act of 2000 (Electronic Signatures in Global and National Commerce) sailed through both the House and the Senate, giving electronic signatures the same legal scrutiny and authenticity that applies to paper documents.
Electronic Signatures became standard in Thailand with the Electronic Transaction Act of 2001, which legally recognizes electronic data messages as functional equivalents to paper documents.
Once they became internationally accepted, electronic signatures emerged in three categories, distinguished by their legal effect.
The specific term electronic signature means a digital version of a signature. This can be an image of a handwritten signature or a name written using a word processing program in the /s/ or /Name Surname/ format to denote it as a signature.
Electronic signatures are not recommended for commercial purposes due to their simplicity. E-signatures are typically used for low-value non-recurring transactions where legal enforceability is unlikely to be questioned.
That said, electronic signatures are extremely useful for everyday business. Any internal authorization-driven process can use an electronic signature. Staff approvals, document reviews, employee evaluations, and informal permissions are all times where an electronic signature works well.
Electronic signatures also speed up collaborative projects. Anything that requires multiple people to sign off is a great time to use electronic signatures. Board meeting minutes, conference registration forms, and group projects by staff in geographically diverse locations are all examples of when e-signatures effectively speed up work.
The term digital signature refers to the next level of legal effect in electronic signature technology. Sometimes referred to as a cryptographic signature, a digital signature is considered more secure because it includes a certificate of authority to detect whether the signed document has been altered or invalidated.
Digital signatures also include a private encryption key to conform the identity of the signatories, the same way it was imagined in Star Trek.
Digital signatures are the clear choice for high-value or legally binding transactions such as federal aid applications, real estate contracts, signing tax documentation, and international business transactions.
The most recent advancements in electronic signatures are in the field of biometrics. Biometric signatures are signatures that ID a person using their unique biological attributes. Not even Star Trek had imagined this technology back in the 1980s.
Examples of biometric identification include electronic fingerprint scanners, retinal scanners, face recognition, and iris scanners which identify people using aspects of their biology that are largely unique and unchanging over a human lifetime.
Biometric identification being used as a legally-binding signature of authorization is controversial. Digital rights groups have raised privacy concerns about data breaches when biological information is stored for recognition purposes.
The security technology for biometric signatures is still being developed. Even as these technologies are being rolled out as smartphone locking mechanisms, fingerprints and retinal images have successfully been faked with minimal effort.
Biometric signatures have yet to be used for international business transactions due to these shortfalls in security.
What is Best?
The current accepted practices for business are electronic signatures and digital signatures.
Organizations that wish to operate at peak efficiency should have software that incorporates electronic signatures into an automated business process.
Modern document management systems (DMS) have integrated electronic signature capability into their software so that businesses can streamline their authorization processes.
Alfresco is an open source DMS with document management, collaboration, records management, process management, imaging capabilities, and more. It is one of the most popular DMS in the world. With 11 million users worldwide, the platform’s developers have focused on incorporating business processes into the system based on user demand.
A Thailand-based software company called Skytizens, which specializes in custom software build-outs, has launched an e-signature module that works directly within the Alfresco Document Management System.
The feature is the only one of its kind in the world.
A powerful module like the Skytizens Alfresco Electronic Signature addon allows enterprises who use the DMS to transform paper processes into a fully electronic web-based work environment.
The addon not only gives users e-signature capabilities but also integrates with workflow processes. When employees need authorization on a document, they can request the authorization, get the signature, move past approval, and continue work on their project within one system seamlessly.
The addon avoids the need to move files out of the DMS, which means there is no need for email attachments or separate signature software.
The addon also helps enterprises with their environmental initiatives. Companies who are “going green” can avoid massive paper and resource waste by using this cutting-edge technology.
How does it work?
Users create a unique digital signature by “drawing” or uploading a handwritten signature to the DMS. The electronic signature is saved in the system for future documents that need signing. The signature remains protected by a unique password, which is required anytime a user e-signs a document.
The addon for Alfresco is also multifunctional; it can be used to sign everything from a simple one-page approval to an executive board announcement that requires multiple signatures on each page. The signed documents are saved in the Alfresco Document Library where users who own those files can access them for later use.
This particular module from Skytizens also has the ability to save multiple password-secured signatures to a profile as well as insert digital stamps (e.g. APPROVED, CONFIDENTIAL, REJECTED) onto documents.
With Skytizens’ groundbreaking electronic signature software, perhaps we can see where the bar will be set for future developers.
The Future of Electronic Authorization
Business technology continues to advance rapidly. Biometric signatures may become a functional reality someday. In the meantime, the business world depends solidly on electronic signatures.
According to PC World, the e-signing sector is on track to grow more than $5 billion by 2020.
Smartphone apps like SignNow and HelloSign charge $5-13 per month to give common consumers the ability to e-sign.