eSignatures commonly written as e-signatures are signatures that come in electronic form. Just like the wet or handwritten signature, an e-signature can be used to authenticate, certify, or approve documents. In the case of the e-signature, it uses digital data often in the form of an image to certify documents and authenticate the signatory.
Now that you know what an e-signature is, the next question that could naturally pop to mind is, are e-signatures safe and secure?
The quick answer is yes and no. The security of the signature depends on the platform you use, the person or organisation that will receive your e-signature, and the digital form your signature is in. To know more, read on.
What Are E-signatures All About?
Most documents back then were in paper form, and the most common way to authenticate or process them was through handwritten signatures. However, nowadays, most documents are in digital form as they’re more convenient as people can instantly send, receive, and share them online.
And you know very well that digital documents are the way to go. You might be even constantly using your document scanners for your office to digitise the documents that you receive.
Consequently, just like with documents on paper, some digital documents require signatures. That’s where e-signatures come into the picture. Electronic signatures basically do what traditional handwritten signatures do. And just like with digital documents, they’re convenient as well.
How E-signatures Work
When you electronically sign a document, your signature is created through the private key that’s unique to you. An algorithm creates encrypted data which matches your signed document. The encrypted data is, therefore, your digital signature.
The e-signature can be marked to show the time a document was signed and the number of people who have read it. Any change to the document invalidates it. Here’s an example: if you sign an agreement of sale using an e-signature, your buyer will receive a copy of the signed agreement with your public key. If the key fails to decrypt the signature, the document is rendered unauthentic, or it’s been changed.
Although various benefits come with e-signatures, there are also a few risks that come with the technology. If mishandled, managing and using electronic files and signatures can be a nightmare.
For example, accidentally deleting or misplacing electronic files can lead to problems. Aside from that, failure to encrypt signatures properly could also lead to:
- Financial loss
- Damage to your corporate image
- Reduced shareholder value
- Loss of intellectual property
- Disruption of business operations
- Increased Liability
There are many ways to make an electronic signature. The safety features of each depend on the one you use. E-signatures work with encryption technologies, which means you’re the only one who can use your unique encryption on the electronic file you sign.
Like most other technological advancements, e-signatures have many advantages, but some precautions are also worth considering.
Precautions to Take When Using E-signatures
Now that you have a basic understanding of how e-signatures work, here are some precautions to take when using them.
1. Determine If The Signature is Real
When you receive a signed document, you can’t be sure that the signature is indeed authentic, especially if it’s just an image pasted on the document. To be sure about the document and signature’s authenticity, you need to require cloud-based e-signature solutions or biometric digital signatures.
Those options can allow you to prevent signature fraud. And if there’s a problem with the document and you need to take the case to court, the signature can be authenticated.
2. Make Sure Your Transacting In An Encrypted Connection
E-signing normally happens online. And the exchanges of signed documents happen on websites. Since websites can be used as a point of entry for a cyberattack, you must ensure that there are no risks of spying and hacking when dealing with digital documents to safeguard your e-signature. To be safe, always make sure your connection to the website is in HTTPS and encrypted. Also, avoid transacting in public networks.
3. Ensure That There’s An Audit Trail
Make sure the digital signing solutions service you choose tracks and audits signatures transparently. Each document and signature must be traceable. Also, the audit or digital trails must show the IP address of every user, and there must be a timestamp as well.
4. Make Sure The E-signature Is Compliant
Depending on your local laws, electronic signatures are generally considered as legally binding as ink signatures. If you’re not sure about your service provider or the e-signature on the document that was sent to you, do some research and verify that they’re compliant. The documents you sign must be able to stand in court.
5. Use E-Signatures That Can Be Verified
E-signed documents must be verifiable through a universal or undisputable platform or technology. The certification of documents can be easier to verify if the e-signature solution used requires you to create an account before signing.
The Bottom Line
Electronic signatures can be considerably more or less secure than ink signatures. The security of your e-signature and the validity of the ones you receive depends on how you loosely or strictly allow the types of e-signatures you accept or use. Therefore, to avoid any potential legal trouble and ensure that your business is running smoothly, be sure to follow the precautions listed above.