In 2021, with everyone locked inside their homes, it makes sense for companies to adopt the practice of e-signature or electronic signatures. In fact, the global e-signature industry was valued at $1,198.6 million in 2020 with an average annual growth rate of 26.6% predicted for 2021-2030. However, despite such a promising forecast, it is a sad reality that companies are still unsure of the security provided by it and are reluctant to adopt it.
Technology has always been a crucial part of industrialization and the digital age has advanced it rapidly. Modern offices are minimal with most of the documentation work being conducted in a paperless manner. Hence, it makes sense that authenticating said documents should also be done securely without the need for a physical signature. This is where an e-signature becomes highly relevant and hence, let us take a closer look at its importance in this digital age.
What is an E-signature?
Simply put, an E-signature or Electronic Signature is the electronic equivalent of a hand-drawn signature similar to how email has become the electronic counterpart of the traditional mailing system. Similar to email, using an e-signature also has multiple advantages over the normal signature. For example, a document can be signed within minutes no matter the physical distance between the signer and the document creator, using an e-signature.
One cannot discuss e-signature without mentioning ‘how to e-sign?’. Well, e-sign can be done in many forms such as scribbling your actual signature using a mouse or stylus or finger (in case of touchscreen devices), typing your name, taking a photo of your physical signature while signing, uploading the image of your signature, etc. All of these formats are considered equally valid.
Now, let us consider a scenario where you require 5-6 signatures for the approval of a major project. In this case, using the traditional method, you would have had to mail the physical copy to each stakeholder. Even if you use email, they would still have to print it out, sign it and then, scan and email the document back. All of these processes drain valuable productive time which can be avoided with the use of e-signatures. If the document in this scenario were to be signed with e-signature, it simply needs to be emailed to the stakeholders and they would be able to sign it electronically and email it back within minutes.
General Usage of E-signature
E-signatures can be used for a wide variety of documents such as:
- Invoices and sales proposals
- Offer letters, salary slips, etc.
- Rental agreements
- Non-disclosure agreements
- Bank forms, insurance forms, etc.
- Tax-related documents
- Other legal documents
Basically, a digital signature can be used in place of any document which requires a physical signature. Hence, it provides a convenient method to digitize, secure and store important documents.
Importance of E-signature
Now that we have understood what an e-signature is, we can take a closer look at its importance in this digital age:
Time is the Key
Time is a crucial factor in optimizing one’s business and as mentioned in the example above, having an e-signature system saves a lot of time for companies because they require multiple documents to be signed securely and verified by multiple parties daily. Taking another cue from the same example, one can also infer that the project under consideration was approved in record time since all the parties involved could sign and revert the document instantaneously! All of these factors help improve the efficiency of the company and help in reducing time spent on bureaucracy.
Another major factor for the importance of e-signature is the enhanced security provided by it. Unlike a physical document with a wet signature, a document signed digitally cannot be forged easily. There are multiple security protocols involved in the creation and usage of e-signatures; since e-signatures make use of cryptographic hashes, they are impossible to duplicate. Moreover, anyone viewing the document will be able to verify the authenticity of the signature along with other properties such as the time and place where the document was signed. E-signature is so secure that they are admissible in the court of law as evidence if required.
The benefits of e-signature surpass its physical counterpart even in the signing experience. The signatory simply has to enter their name or provide an image of their signature or, as is the case nowadays, use their finger to simply draw their signature directly onto the document! This kind of ease and efficient handling of such a crucial part of the document is made possible simply due to the enhanced security and ease of usage provided by e-signature. In today’s remote working environment, an e-signature is the easiest and safest option to get any document signed instantly irrespective of the physical distance between the personnel handling said document.
With all major companies striving to become green and eco-friendly, using a digital signature is a no-brainer. The most important part of a physical signature is the paper on which the signing takes place. So, let us consider some statistics on the same:
- Companies in the USA spend almost 8 billion dollars per year on just paper.
- When companies go paperless, they reduce 80% of their annual shipping costs.
- Companies that have adopted e-signature solutions have reduced their document handling expenses by 50%.
- Almost 65% of companies using traditional paper spends 1 day collectively per month in handling paper.
All of these statistics point to the fact that using e-signature is one of the easiest ways to reduce your carbon footprint while also acting as a stepping stone for your company to go completely paperless, which is not only beneficial for our planet but is also easy on the budget.
We have already discussed the reduction in the time required to create documents and get them signed digitally. However, the benefits of e-signature and its efficiency-related improvements do not stop there. A digital signature makes the process of signing documents so streamlined that it is proven to positively affect your client satisfaction rates. Similarly, it also helps reduce the efforts required in developing, storing and maintaining hard copies of important documents. Furthermore, as evident from the example above, you will be able to implement decisions quickly due to the reduced time required to get the relevant signatures. All of these translates to improved efficiency which is highly desirable for any business.
We have already discussed the fact that e-signatures remain valid and admissible in the court of law as evidence. The Information Technology Act, 2000 has provided a detailed legal framework concerning the creation and usage of digital signatures. E-signatures are also highly secure because they can store the meta-data related to the signature such as the date and time the signatory signed it, their IP address, their physical location at that time, as well as their unique public key which is required for signing it. Moreover, once a document is signed, it can be verified using the key and any kind of tampering will result in the key being modified irrevocably. Hence, a digitally signed document becomes strong proof in the court of law and can be upheld as evidence similar to any physically signed documents.
As we have seen until now, e-signature is a highly instrumental tool in making your company completely paperless, which is not only good for the environment but also helps you become more cost-efficient. Moreover, it also helps you reduce the time required for signing crucial documents as well as helps you enhance your customer experience. In today’s digital age, all of these factors are highly instrumental in keeping up with the cut-throat competition. Hence, we can infer that having an e-signature option becomes highly influential in the overall success of any company.
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