The limitation of personal contact has in a very short time rendered processes that require physical interaction with clients inoperative.
Electronic signature technology can transform the way companies serve their clients and offer them a more convenient and efficient digital interaction. The digitization of paper processes allows companies and institutions to conclude contractual relationships without the need for the parties involved to physically meet. At the same time, such a signature also has its technological and legal limitations, which affect the implementation and use of the signature solution itself.
Digitalization is essential
The vast majority of companies recognize the value of digitizing business processes and perceive digital transformation as a tool for maximizing sales, efficiency, and productivity. The current global pandemic has turned what was a trendy topic into a long-term corporate strategy.
Paper-based administrative processes increase overhead costs that are tied to the supporting processes of provided services. In addition to the obvious costs of office paper, it is also necessary to take into account the time employees spend manually filling out, printing, signing, and scanning documents. If these processes are automated, the costs of implementation, employee training, and adopting an electronic signature solution are minimal compared to the costs of paper processes. If a company has a large volume of physical documents in circulation, it is a fairly common phenomenon for them to be lost or damaged. Internal processes commonly require the signatures of multiple people in different locations. In such cases, an electronic signature eliminates the transport of original signed documents by courier service. When signing an electronic document, the creation and distribution of copies disappears. One of the biggest shortcomings of manual processes is human error, which is only discovered when processing the signed documentation. Electronic signing ultimately leads to correctly completed documentation and automation of related processes.
Legal validity of the electronic signature
The rules governing the use of electronic signatures in the European Union are set out by Regulation No. 910/2014, known by the acronym eIDAS – Electronic Identification, Authentication and Trust Services.
The eIDAS Regulation establishes a framework and regulates electronic identification services and the trustworthiness of electronic transactions in the European Union. It regulates electronic signatures, electronic transactions, and provides a secure way of doing business, for example in electronic transfers of funds or transactions with public services. The eIDAS Regulation defines standards that give electronic signatures, qualified digital certificates, electronic seals, and time stamps the same legal status as their paper-based equivalents. EU Member States are required to legally recognize electronic signatures that meet eIDAS standards.
Based on the nature of the use, when signing electronically it is also necessary to examine the relevant rules and regulations depending on the geographic jurisdiction. In specific cases, national legislation sets exceptions where signing documents is preferred in physical paper form due to associated administrative acts.
Not every signature is the same
According to the eIDAS Regulation, a signature cannot be refused as evidence in legal proceedings solely because it is in electronic form. However, this regulation also defines three levels of electronic signature and the purpose of their use.
A simple electronic signature is essentially the performance of a certain action that represents authorization of a process. It involves inserting an object into a document in various formats (an image of a signature, a name typed on a keyboard, a signature with a finger on a touch screen), or performing a certain action (ticking a checkbox, pressing the “sign” button). By such an electronic signature, the signatory provides consent to the subject of the document. However, the technology of a simple electronic signature does not provide the ability to identify the person who signed the document.
An advanced electronic signature is one level higher in the hierarchy defined by the eIDAS Regulation and must meet a series of technical and legal requirements. The signature must contain unique and non-transferable identification information that links it to the signatory. This includes, for example, data from the course of a handwritten electronic signature, or device identification. In the case of a handwritten signature with an electronic pen, it is additionally possible to capture a series of static and dynamic characteristics that provide data for examining the authenticity of the signature by forensic experts. An advanced electronic signature can also be linked to the signing person retrospectively. With an advanced electronic signature, the signatory must have sole control over the data used to sign the document. The integrity of the signed document must be preserved and any possible changes are necessarily recorded. If the data in the document has been altered after signing, the signature is marked as invalid. Preserving the integrity of the document after it is signed is defined by the XAdES, CAdES, or PAdES standards (XML, CMS, or PDF advanced electronic signature.)
A qualified electronic signature unambiguously links the subject and the authorization of the document on the basis of a digital certificate. The use of such a signature is required for certain acts within electronic communication with public institutions and authorities. A qualified signature ensures the authenticity of the signature, identification of the signatory, integrity of the document, and legal non-repudiation of creating the electronic signature. The difference compared to an advanced electronic signature is in the use of a unique key and a qualified certificate issued by an accredited certification authority. An example of a qualified electronic signature is the chip on an ID card. Together with the certificate, a pair of cryptographic keys is also stored in the chip.
Digitalization and COVID-19
Restrictive measures related to the pandemic, in a very short time, almost made personal meetings with clients impossible. Signing documents remotely becomes a key factor in the forced transition to digital sales channels. To minimize risks, it is necessary to know the limitations that apply to electronic signing.
The offer of solutions for electronic signing is relatively wide, but not all platforms are suitable for specific use cases. Among the factors that need to be considered when choosing a suitable solution is the volume of documents signed within the company. The scope of the implementation process differs when signing documents within the corporate network and outside it. The type of signed documents and local legislation that governs the conclusion of the relevant contractual relationships can narrow the options for selecting a signing solution. If the solution is to be used for interaction with a client, it is necessary to assess specific customization possibilities (visual aspect, workflow).
A simple electronic signature can be started almost immediately and without an extensive implementation process. It represents consent to the content, but the signature cannot be exclusively linked to the signatory. It is not possible to guarantee that the document was not modified after signing. The legal enforceability of such an electronic signature solution is limited.
The EU eIDAS Regulation states that a qualified electronic signature always has the same legal effect as a handwritten signature on paper, but at the same time it requires compliance with strict technical standards and can only be used after the signatory’s identity has been verified by an independent certification authority.
An advanced electronic signature is legally binding and the implementation of such a solution is faster and simpler. The difference compared to a qualified electronic signature arises in the identification of the signatory. If biometric data were additionally recorded together with the data of the electronic signature, in the event of a court dispute it is verified by the same experts in the field of handwriting expertise who examine signatures on paper documents. However, it depends on the device on which the signature was created, or on the recorded additional data that help link a person to a specific signature (for example, stroke speed, pressure during signing, tilt of the electronic pen on a touch screen).
The basis of digitalization is simplifying processes, improving the quality of provided services, and eliminating manual employee errors. Companies that adapt too slowly to the current situation may face financial problems caused by cumbersome, time-consuming manual processes. Electronic signatures are one of the simplest tools that help accelerate the digital transformation of a company.
