eSignatures have become a valuable asset for cutting costs, saving paper, reducing fraud, and ensuring customer satisfaction. They have evolved from a novel way to sign a document to a necessity for managers and employees to secure mission-critical data and attend to the basic processes of their business.
Though digital signatures have been around for well over a decade, most professionals think of one as the same thing as an electronic signature. In fact, most marketing campaigns use the term ‘eSignature’ to refer to both types, because it´s become the standard, widely known term. However, if you were asked “Aren’t the two the same thing?” The correct answer would Yes, but no. Though the terms ‘electronic signature’ and ‘digital signature’ are often used interchangeably, they are in fact quite different. Same pedigree, different IQ.
Understanding the Similarities and Differences
Electronic Signatures
The term electronic signature can refer to a number of methods of capturing a signature on a device, such as a tablet, or a document. It could also be something as rudimentary as typing one’s name in a signature box. If you have accepted a delivery service lately, you probably put your electronic signature on a digital device of some kind.
Digital Signatures
Think of an electronic signature as a Model T and a digital signature a Tesla.
A digital signature consists of an algorithm that encrypts the signature and generates a unique and unalterable signature certificate. The result is that, while electronic signatures can be tampered with, their digital descendant cannot. Today’s digital signatures prevent the majority of message attacks and are undoubtedly the most secure way to sign a document. In a nutshell: An electronic signature is an authorized way to sign a document, while a digital signature is a way to encode a document for security.
Because of encryption, a digital signature and the document it is attached to are connected in a way a simple electronic signature cannot duplicate. Unlike in the dark ages of 2000, today’s digital signatures are simple to use and can be created with any computer that has an Internet connection. When people sign a document with a digital signature, they receive a digital certificate that is unique to each individual. A “key pair” of both a private and public key ensure the tightest control possible.
Because a digital signature is effectively intertwined with a document’s content, if anyone changes anything about the content, the signature is also changed. However small the change to the document is, the digital signature is invalidated indicating that someone has tampered with the document.
The Basics of How a Digital Signature Works
The way a digital signature is applied and works varies in accordance to the software user. However, typically, there are four basic steps employed by digital signature software to create a digital signature:
- A ‘hash’ of the document content is created. A hash is a representation of the entire content of a document, including images.
- A signatories’ certificate encrypts the hash. The combination of hashing and encryption produces an intrinsic connection between the signatory and the document.
- A public key uses the document hash to check the certificate’s public key to ensure it can be decrypted. A user’s public key must match private key used to encrypt the document.
- When the signature is checked, the original document is hashed again and both the signed and original are crosschecked. Any difference between the two invalidates the signature.
Comparing the Evolution of Electronic and Digital Signatures
The Digital Lock
Digital signatures provide a lock for a document. When a document changes after its accompanying signature is applied, the signature is rejected as invalid. By contrast, electronic signatures are open to unauthorized changes. Digital signatures, however, are very secure. A hash cannot be easily undone and encryption makes a digital certificate very secure.
The Value of Verification
There are virtually no standards for electronic signatures and they often use proprietary methods making them intrinsically less secure. A digital signature has the value of what is called “non-repudiation”. Public and private keys combined with hashes make a signature easy to verify as authentic. Electronic signatures are much more difficult to verify.
Features Unique to Digital Signatures
- Email Authentication – An email with a link to access the document is sent to the signatory. By clicking the link, the fact they used their email offers proof of identity.
- Time Stamped – Ties a person to a signature on a specific day and time.
- Knowledge-Based Authentication (KBA) – Before being allowed access to the document, the signatory must answer questions found in 30 years of public records. This can include town hall records, credit reports, and more.
- Short Message Service (SMS) Authentication – SMS authentication requires the signatory to supply a one-time passcode sent to his or her mobile phone before the document can be can opened.
But, Will They Hold up in Court?
Electronic signatures are legally enforceable in the US, U.K., Canada, the EU, Australia, and dozens of more countries. Generally, electronic signatures are seen no differently by courts than handwritten ones. Digital signatures, in particular, are just must more simple.
There are few instances, such as U.S. tax forms, receiving a new driver license and registration to vote, which still require a handwritten signature, but it is just a matter of time before electronic signatures will be acceptable to all, if not most, government entities. Who wouldn’t cheer at the thought of not needing to stand in line anymore for what seems like days at the DMV or courthouse?
On to the Future
Now that you know the differences between and importance of electronic and digital signatures, what can be done with that information? eSignature software and integration has already helped thousands of companies from any business area make the switch from paper to electronic workflows. Pharmaceutical, drug and medical manufactures regulated by the FDA are using recognized eSignature platforms to manage electronic documents, ensuring that they comply with federal regulations. The high instance of signatures in the financial services and insurance industries make them prime candidates for digital signatures. The applications appear to be endless and are evolving every day.
- https://www.approveme.com/e-signature/difference-between-digital-signature-and-electronic-signature/
- https://blog.pandadoc.com/electronic-digital-signatures-difference/
- https://docpath.com/art-the-evolution-of-document-software-and-electronic-signature/
André Klein
Freelance DocPath Consultant