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Everything you need to know about Electronic signatures

We live in a digital era where a lot of things are done online. Unlike the old days when the only documents that existed were those on paper, we now have digital documents that can be shared and authentically signed over the internet thanks to electronic signatures just with a few clicks.

The creation of digital documents has helped make many processes simpler and thus resulted in higher efficiency when dealing with documents and when finalizing deals. For example, instead of waiting for a document to arrive in the mail, we can now receive it instantly through email.

The main idea behind electronic signatures is not just to facilitate the process in which contracts are closed and deals are made, but it also makes it way more secure than the traditional old school way.

The electronic signature holds exclusive and sophisticated data to make the authentication aspect almost foolproof against malicious intents to forge or alter the signatures.

In this article, we will walk you through what is electronic signature, how it is used and what is used for.

The outcome here is to help you understand what an electronic signature is, be able to identify its types and be able to know how to work with authorized electronic signature providers.


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What is an Electronic Signature? 

Have you ever signed on the dotted line of a paper document? 

That signature helps to confirm that you are aware of the contents of the documents and have verified by signing it. The idea here is that this “dotted line” signature helps to uniquely identify your identity and to prove that you are in acceptance of what is written on that specific paper of the whole document, so that no one can replace the content and force you to comply with a new set of conditions because it would be evident that it was not signed by you.

The electronic signature serves a similar purpose, it is there to help identify confirmation and validates the credibility of a document. But electronic signature does not only hold a visual drawing of your signature, on one hand it brings more data of the drawing such as speed and pressure of the trace, but it also stores data that help authenticate this signature, for example, the browser type, the geo-location, an exact time stamp or the IP address of the place signed and other digital information. This ultimately makes electronic signature way more reliable than a traditional hand written one.

Now that we know what an electronic signature is, let us have a look at the different types of electronic signatures.

What are the different types of electronic signatures?

There are three types of electronic signature and they depend on the region. 

A Simple Electronic Signature:

Documents that require a signature would normally come with a link at the end. On clicking this, you would be redirected to another webpage where you can provide your signature using the mouse or trackpad.

Once you are satisfied with the signature, you can submit this, which in turn would add the signature to the document.

The application of simple electronic signature here is very much like the traditional offline one. You still get to have the same signature (or an image of the signature) and have it ready to be placed on your preferred documents.

Anyone who has approved access to this document would be able to sign it. Thus, it is the least secure electronic signing technique.

Even though it is the least secure technique, it is still the most efficient and fastest way and that is the reason for its high popularity. At the same time, it is extremely simple and is cheap to acquire. Thus, it reduces the time that you would need to electronically sign the documents online.

Advanced Electronic Signature:

With a simple electronic signature, there is no way to verify that the signatory was the same person named in the document. This can be very problematic as anyone who has access to the document can sign with a different name.

This is where advancements in legal tech come into play, with advanced electronic signatures. Unlike a simple electronic signature, an advanced electronic signature is signed using a digital certificate that is possessed only by the signatory and that holds important data to identify the signature. Moreover, these certificates are usually password protected and hold a unique public key for validation. Thus, identifying each user easily. Even if someone tries to tamper the document later on, they would not be able to replicate the signature. This makes the documents tamper-proof once signed.

While an advanced electronic signature is extremely secure, some documents might be even more confidential and require an additional layer of validation. This is when a qualified electronic signature comes in.

A Qualified Electronic Signature:

The traditional way of signing with a presence of a witness is now done digitally, and not through a zoom call. The qualified electronic signature is where the signature has to be verified by a third party Trust service provider (TSP)

Much like the advanced electronic signature, the qualified electronic signature also holds a digital certificate of signature to display the relevant information and which is held by the signatory.
However, the qualified signature has to be verified by a relevant TSP to approve the signature verifying that everything is in order and that it all checks out. 

Each country has their dedicated TSP and is usually owned publicly and run by certified legal professionals. 


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What is the difference between electronic signature vs digital signature?

Check out my previous article on this: Electronic Signatures vs. Digital Signatures: What's the Difference? (and which is better)

More often than not, people usually get confused between electronic and digital signatures. Both of these signing techniques are used to sign digital documents. 

However, the process of doing this is entirely different.

In terms of an electronic signature, a document might come with a link where you can sign and submit your signature. There are other ways to electronically sign a digital document. This includes using a digital certificate that verifies the identity of the signer.

The main reason for the popularity of electronic signatures is that they are intuitive to use and are easy to adapt and set up. This, of course, has improved over the years with newer ways to electronically sign documents online.

A digital signature, on the other hand, links your biometric details, such as a fingerprint, to the document. This is done by embedding the fingerprint into the document. Once a document is signed digitally, no further changes can be made.

Digital signatures possess a feature known as tamper evidence. If someone tries to alter a document that is digitally signed, then the verifying authority would get to know that the document has tampered after it was digitally signed. This would render it void.

Digital signatures require a little more effort in terms of technology. As the digital signature is cryptographically embedded into the document, one needs to employ the skills needed to do this. This is the main reason why many organizations make use of electronic signatures instead.

Now that we know the difference between electronic and digital signatures, let us have a look at how you can automate all your document verification process using electronic signatures.


Who can use Electronic Signatures?

Any organization that deals with legal documents can start using electronic signatures. Fortune 500 companies and other startups can implement these on their NDAs (Non Disclosure Agreement) or NCAs (Non Compete Agreement) with their employees.

Both of which are documents that are automated with the Artificial Intelligence in Bigle Legal.

House owners can use these as a replacement for traditional lease and rental agreements. Insurance companies can speed up the whole process by implementing e signatures for all their paperwork.

Banks and other financial organizations can automate several financial processes by using electronic signatures. Currently, all these are done using traditional pen and paper methods.

You might be thinking that migrating all paper documents to their digital counterparts is extremely hard. This is where e-signature solutions such as Bigle Legal come in handy. With several pre-designed templates, you can easily automate the document migration as well.

Let us now have a look at how electronic signatures help in document automation.


Electronic Signature in Document Automation:

Creating a document from scratch can be very tiresome, even if you have a template ready to be filled, you still need to work on format, make sure you constantly review, get the relevant validations and make sure that all clauses are accurate and up to date. Let alone the final part where you have to send it to sign and wait for the different parties to do so, all that while hoping that nothing changes in your agreement in the meantime.

That is why over the years, the whole process of documentation has evolved drastically. What previously took days or even weeks together can now be done within a few minutes or hours. This is all thanks to document automation.

Check out: What is document automation? and why is it important for your business?

Document automation converts what is usually a regular template into a smart template that makes generating documents from them as seamless as it can be and in a much quicker time. Without losing format or being worried about some human errors.

Another time-consuming process was the document signing process. In the case of pen and paper signing of documents, the authorities would have to schedule the timings to get the document signed by the signatory.

In addition to this, it would also involve traveling of either the signatory or the witness which is again not a very fast process. With the birth of electronic signatures, this entire process has also become automated.

Companies can now send out documents containing links for electronic signature. The signator can read the entire document and sign without having to travel anywhere. More importantly, using advanced electronic signing techniques is a whole lot more secure than the traditional pen and paper document signing.

If you are thinking that electronic documents are much easier to alter than paper documents, then you are entirely wrong. Documents that are electronically signed would have the signature encoded in them.

In the case of confidential documents, these signatures also have a layer of cryptographic encryption on top of them. Thus, it would be impossible to replicate it after the document is made.

With the help of electronic signatures, not only are you speeding up the whole process of documentation but also increasing the security of the documents. Thus, you can reduce such malpractices and also achieve document automation.

Check out: Document automation: 5 ways to boost your legal team's efficiency.

Benefits of Electronic Signatures:

There are many benefits that moving away from traditional pen and paper documents has to offer. Let us now have a look at some of them.

1- Eco-friendly:

The whole process of document automation using electronic signatures is eco-friendly. Not only does it reduce the overall usage of paper by eliminating printed documents but also it does not require anyone to travel. Thus, reducing the emissions as well.

2- Fast Process:

Document automation using electronic signature is faster than the traditional method of document processing. As all documents are sent instantly over an email, you can sign the documents online within a few minutes. This brings down the overall time required to process the documents, from a few days to just a few minutes. The added benefit is that you can sign and send the documents back instantly from anywhere.

3- Easily Accessible:

We have all been through the dilemma of losing some important documents right? Be it your job contract or even your birth certificate, these documents have the tendency of getting lost when you need them the most.

All documents that are signed electronically are stored digitally. This means you can access them from anywhere you want and would never lose them.

4- More Reliable:

We have seen numerous instances where a paper document signed by someone was maliciously altered after their signature was attaining. This is extremely worrying.

With electronic signatures, it is impossible to alter the document once signed. Thus, electronically signed documents are more trust-worthy.

5- Any Document Format:

All document formats can be electronically signed. So, you don’t have to worry about restrictions when it comes to electronic signatures.

Also check out: How electronic signature helped companies throughout the pandemic

Regulations About Electronic Signatures:

Countries around the world have understood the benefits of electronic signatures and how they would have to increase the revenue of businesses. This is why documents that are electronically signed have attained legal status in most nations around the world.

The American government implemented the ESIGN Act in 2000 to increase the adoption of electronic signatures. Many businesses run in the US accept electronically signed documents for contracts, certificates, etc.

There are a few exceptions to the usage of electronic signatures as well. These exceptions include documents concerning property transfers, wills, etc.

In the US, ESIGN Act is what defines and governs the usage of electronic signatures. In the European Union, eiDAS (Electronic Identification and Authentication and Trust Services) does the exact same job. eiDAS was established in July 2014but only came into effect a few years later.

All laws surrounding the usage of electronic signatures, digital certificates, electronic seals, and the legality of electronically signed documents have been defined under this regulation. With the establishment of eiDAS, every single member state of the European Union would follow a uniform law when it comes to e signatures.

The eIDAS Regulation (Electronic Identification and Authentication and Trust Services) came into effect in 2016 and ever since, there has been an increase in the usage of electronically signed documents. The law even accepts electronically signed documents across the borders.

The main difference to the European take on electronic signatures is that the European Union does not have any exceptions when it comes to electronically signed documents. This means that even wills and property transfer documents are legal if they are electronically signed.

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Legal tech is something that we have all longed for in the legal industry. Digital documents have been around for over a decade but their usage as a legally binding document has been limited due to a fear of not understanding it, however, this all changed as now lawyers and developers work hand in hand to achieve spectacular results. And now with an electronic signature, these documents can be accepted legally around the world.

The electronic signature definitely help numerous businesses around the world to get signatures from clients, employees, and even customers. This would help save time as well as money. Bigle Legal takes this a step further by offering complete document automation.

From creating documents using professional templates to getting an electronic signature from clients, Bigle Legal does it all. So, if you are looking for an efficient way to automate your documentation, check out the service of Bigle Legal.