Is Digital Signature the Way Forward?

• Published Date: December 11, 2020

If you have, at any point in time, lost a valuable client or irked a loyal customer by squandering too much time on getting the documents signed in person, you are not the only one. Ensuring the confidentiality of official records certainly tops the list of every business organization or a prudent individual, for that matter. However, it does take a toll on organizational goals when documents carrying crucial, definitive signatures have to go through a persistent route to reach the final table. But with technology leapfrogging like never before, its manifestations have become countless. One such manifestation of digital transformation has been electronic signature or e-signature, which has eventually paved the way for digital signature.

An electronic signature can be viewed as any electronic symbol or process associated with a record or contract, wherein the party involved shows the intent to sign the document. This form of signature is usually applicable to contracts or other related agreements that are entered into by two parties. To make the whole process more secure and authentic, digital signature, a type of electronic signature, has made inroads and gained ground across the world. Unlike electronic signature, a digital signature comprises more security features, including fingerprint, and does not allow any form of unauthorized tampering. This type of signature is authorized and regulated by certification authorities and facilitates document verification as well. It lends integrity and traceability to the document and is more legally binding in nature.

Digital signatures are a far more advanced approach to ensuring that the most crucial and indigenous aspect of your identity, your signature, remains foolproof. Moreover, the technology does not demand the conventional use of pen and paper, or endless waiting to get the most-awaited document on your table. It simply works as the electronic equivalent of a person's physical signature. It is also a guarantee that the information contained in the electronic document has not been modified and carries validation of the authority in the form of a virtual tamper-proof seal.

Of late, numerous organizations have started taking the electronic route to obtain signed documents in a secure and fast way. The decision bodes well, as electronic documents help reduce the printing costs by eliminating the need for power, toner/ink, and paper. Furthermore, they have made the stockpiling of documents a yesterday’s thing, with documents finding their virtual warehouse on a hard drive instead of a conventional file cabinet. Since digital signature offers these advantageous benefits, it is widely being adopted by both public and private sectors alike.

The case for digital signing is compelling, and how!

• 80% of the companies that had put digital signatures into effect saw a return on investment in the first year itself.
• 25% of the companies witnessed a return on investment within three months.

But the most immediate effect of this technology has been the enormous lift to efficiency companies have experienced with its implementation.

Bird’s eye view of digital signature industry landscape

Globally, the digital signature industry has grown considerably in recent years, in terms of the technology’s acceptability among the users worldwide. The market is projected to continue witnessing robust growth, driven by factors such as the rising adoption of biometric technology in the banking, financial services, and insurance (BFSI) industry, the growing need to prevent online and offline frauds, and the increasing implementation of government laws and regulations supporting the usage of digital signatures.

North America leads the market for digital signature globally, propelled by factors such as the high adoption of the technology in regional BFSI and healthcare sectors. Besides, favorable government regulations in developed countries such as Canada and the U.S., including the the Health Insurance Portability and Accountability Act (HIPAA), the Uniform Electronic Transactions Act (UETA), and the Electronic Signatures in Global and National Commerce Act (ESIGN), are bolstering the adoption of digital signature solutions in the region.

Geographically, the digital signature industry is projected to exhibit the fastest growth in Asia-Pacific (APAC). Major factors driving the market growth in APAC include growth in the BFSI industry and initiatives taken by various government associations in countries like China and India toward digital transformation, by eliminating paper use and encouraging digital documentation. In APAC, China is expected to continue remaining the largest market for digital signature in the near future. This can be attributed to the continuous expansion in the BFSI industry, which is resulting in the high demand for digital signature solutions for data protection and time management.

Government policies encouraging the large-scale adoption of digital signature technology

Several governments are implementing policies and regulations to encourage the adoption of digital signature solutions. Government regulations such as the U.S. Electronic Signatures in Global and National Commerce Act (ESIGN) 2000 and the Uniform Electronic Transactions Act (UETA) 1999 encourage the application of a range of electronic and digital signatures. According to these acts, electronic records and related digital signatures cannot be declared invalid, simply because they are in the electronic or digital format. Moreover, the implementation of various environment protection regulations (for saving trees and reducing paper use) in countries such as Colombia, Ghana, Malaysia, and Peru is boosting the adoption of advanced electronic technologies, including digital signature.

In July 2020, the Securities and Exchange Board of India (SEBI), the Indian government’s body regulating the securities and commodity market in India, extended the use of digital signature certification for submissions made to the Exchange in the wake of the COVID-19 pandemic. Moreover, the increasing implementation of remote working has accelerated the adoption of this technological means to facilitate business continuity, with government across various countries discouraging the use of paper for transaction/contract purposes and encouraging digital verification in view of the ubiquitous social distancing norm. Thus, digital certificates, today, are extensively being used for encrypted mails, online transactions, application of tenders, efiling of income tax returns, and signing and validation of various document formats.

In the path to market growth, lie a few barricades up ahead

The high cost of digital signature solutions and the availability of conventional paper-based signature solutions are the major factors hindering the growth of the digital signature industry. Most of the digital signature solutions are costly because of their multi-functionality features and require extensive software and hardware integration. The high cost of digital signature solutions makes it difficult for small- and mid-sized industries to implement them, thereby hindering their adoption to some extent.

Contribution of the industry contenders toward market growth

With technology taking big strides every day, companies are trying to keep up with their competitors by launching new and advanced products. For instance, eSign Genie Software, in April 2020, integrated its solution with Google Suit, allowing customers to digitally sign documents from various platforms using eSign’s technology directly on Google Drive, thereby helping them save time. Besides, Secured Signing Limited, in May 2018, released a tool that helps to apply signature templates and perform the signing process even after a particular document has been declined. By doing do, it helps in getting rid of the bottlenecks and ensuring the smooth invoice approval process.

Considering the potential of digital signature, players operating in the industry are also focusing on acquisitions to increase their share. For instance, in July 2018, DocuSign announced its decision to acquire Chicago-based contract management and cloud document generation company SpringCM for $220 million. With this acquisition, DocuSign intended to grow beyond its bread-and-butter business of electronic signature solutions to expand and modernize, what it calls, the System of Agreement. This includes everything, from preparing agreements to signing, executing, and managing them.

Besides, companies in the market are demonstrating avidness to enter into partnerships to expand their product portfolio and gain a competitive edge. For instance, in March 2018, Adobe Systems Incorporated announced its partnership with NVIDIA to extend the availability of its Sensei APIs and broaden the Sensei ecosystem to a new audience of developers, data scientists, and partners. Also, through this partnership, the company aimed at combining its digital experience solutions with NVIDIA’s AI capabilities to deliver AI services to customers and developers more swiftly and efficiently.

Adobe is reinforcing standards again

Adobe is a pioneer in secure digital documents, with six billion signature transactions every year. The company invented PDF and drove the first open models for digital signatures. Together with industry specialists in the Cloud Signature Consortium, the company is setting benchmarks for cloud-based digital signatures that work on the web and on cellphones.

Scope for digital signature – Few years down the line

Given the security-conscious world we live in, cryptography, encryption, and other assurance techniques have become necessities for software designing and application safety. Thus, digital signatures are widely being used in everyday applications to guarantee the security and integrity of systems and have become the heart of technologies such as transport layer security (TLS), secure sockets layer (SSL), and bitcoin. Since these technologies are extremely complex, understanding essential digital security standards, such as public-key encryption, digital signature, and cryptographic hashing, helps break these complicated systems into composites of straightforward thoughts and guarantee security at every level of the system.

With the online world swiftly taking over the offline world, online security has become a must. The roots of digital signature have just started to strengthen, with its industry offering ample scope to transform the digital world we live in. Thus, given the zippy speed the market is growing at, it would not be wrong to say that “digital” is the way forward.