In the past, official documents required someone to write their signature in person and by hand and sometimes even notarized. Between technology and the covid pandemic, times have changed, however.
Now, certain states have legalized the option to perform virtual closings on a house. When you hear the term “e-signature,” you might assume it’s synonymous with a digital signature.
These two are not identical, though. Take a look at them and see which might be more appropriate for your business.
What Is An Electronic Signature?
Simply put, an electronic signature is how a person attaches his or her name to a digital document. The purpose is to secure the document rather than to verify it.
Anyone may attach a name to a document, which is why it’s not as safe or credible as a digital signature. Think of it as the equivalent of signing a piece of paper in your home.
No one is there to witness you sign it; therefore, someone other than you might easily have forged it. Electronic signatures may be acceptable for documents that aren’t critical or sensitive.
What is a Digital Signature?
All digital signatures are a form of electronic signature, but the opposite is not the case. Digital signatures are a more secure way to confirm a person’s identity before he or she has the ability to sign.
This happens through certificate-based authentication. That could be in the form of a PIN, password, or private access key.
You could compare this to when a notary verifies the signature on a document. It confirms you are who you claim to be, similar to the way a third acts as a witness to your signing of the document after consulting official documentation of your identity.
Benefits of Electronic Signatures
There are substantial benefits to using an electronic signature. First, it’s much more convenient. In the case of closing on a house, the seller may readily move out of state while in the process of finalizing the details with the other parties.
Documents are shared online through secure portals so there’s no need to print, sign, and upload the paperwork. Because of its simplicity, this speeds up what used to be a much more drawn-out process.
Now you can devote time to what’s most important rather than having to hunt down people and arrange to meet in person.
Secure documents that utilize digital signatures can also be legally binding, depending on your region. For instance, the European Union (EU) and the United Kingdom (UK) both have separate regulations that pertain to the enforcement of electronic signatures.
The EU accepts digital signatures as legally binding, but the UK regards only electronic signatures as valid. The latter is also referred to as a wet signature as if it had been performed with a pen and paper.
You should always make sure to check the rules for your specific region before you implement any type of e-signature.
Of course, you can’t talk about the benefits of electronic signatures without mentioning that they’re eco-friendly. Paperless document signing could save upwards of 2.5 billion trees in less than 20 years.
Saving Money With Electronic Signatures
Every business looks for ways to cut down on overall costs. Using electronic signatures through a secure and safe platform can easily support this goal.
In-person signings require printers, ink, paper, toner, postage, not to mention company time spent for employees to gather in the same physical space to collect the final signatures.
Electronic signatures, however, enable you to do everything online. There’s no need for extra labor or printing unnecessary items.
Everything can remain safely in the cloud once it’s been signed so you won’t have to store physical files in your office, either.
Every one of your departments may benefit from utilizing electronic signatures: human resources for onboarding, sales for closing with clients, and legal for finalizing contracts, for instance. Increased efficiency with more effective digital workflows will also lead to happier and more productive employees.
