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Organizations have used electronic signatures for years, but the COVID-19 pandemic and subsequent move to a distributed work model have brought them further into the mainstream.
When making the move to e-signatures, organizations should follow industry standards and government regulations to ensure they meet validity requirements. After they identify the service they want, know the regulations to follow and all signees agree to use e-signatures, organizations must prove the signature's validity. Yet, before that process begins, organizations should weigh the pros and cons of e-signatures to understand what to expect with this technology.
Electronic vs. digital signatures
Digital signatures use cryptographic technology to validate the signer's identity and ensure the document wasn't changed, which e-signatures lack. Additionally, digital signatures have different levels of security based on the issuing certificate authority and the level of encryption provided.
Most e-signatures include an image of a wet, or handwritten, signature, but that isn't required. More importantly, the service should comply with the legal standards established in the organization's region.
The pros of e-signatures
While most people understand the convenience of electronic signatures, they may also overlook or take several aspects for granted. Benefits of e-signatures include the following:
- Accessible. Whether signees are across town or in another country, they can access e-signatures regardless of location.
- Secure. When correctly implemented, e-signatures are very secure. Several firms specialize in cloud-based e-signature services -- like DocuSign and HelloSign -- and many desktop tools, such as Adobe Acrobat, have embedded e-signature capabilities.
- Enable process automation. For many organizations, e-signatures are part of a streamlined digital process. As soon as teams collect signatures, the next step can begin automatically. Also, visibility into who has signed can help advance the process.
- Improved records management. Once signed, parties can save document copies locally in their own records. No one has to make copies or email finalized documents, so parties can readily reference and use them.
- Fast. Above all, e-signatures are fast. When a party sends a document out, it alerts everyone at the same time, and they can sign quickly.
The cons of e-signatures
Universal electronic signatures bring up a few challenges. Organizations may need backup plans if they can't overcome a challenge for a particularly critical transaction.
- May require advanced technology. Technology is not evenly distributed. While online tools can work, they do not address every scenario. Many transactions already involve an in-person component, so parties can collect a wet signature or share e-signature tools for fully remote transactions.
- Trust. Many people do not trust technology, so organizations should accommodate wet signatures.
- Resistance to change. People can trust technology and still resist change, which is why wet signatures are still common. After many pandemic lockdowns ended, some organizations reverted to wet signatures as they sought to reestablish old processes.
What to know before implementing e-signatures
Electronic signatures can future-proof businesses against the different ways people may work over time. Still, organizations must build trust and ensure all parties are familiar and comfortable with e-signatures. They often contain an image of a wet signature, as it can increase trust and limit potential changes.
Additionally, all involved parties must consent to use e-signatures. If one side elects not to, the organization must collect wet signatures from that party, or the transaction can't take place. If a company moves exclusively to e-signatures, it must determine how to accommodate situations that require hard copies.
To implement e-signature software, organizations must look to software providers. These vendors can handle security and bring a level of trust with their technologies. Organizations must understand their own security needs, and have alternatives prepared just in case.