What is an electronic signature? What are the potential use cases?

The traditional way of working is changing due to digital transformation in businesses. Companies handle documents that need to be signed daily and when physically managed, they involve time-consuming validation processes. This post points out how to improve these processes and what an electronic signature is and its potential use cases.

What is an electronic signature?

The electronic signature is the digital version of the physical signature of a document and indicates the willingness of a person to accept the content of a document or a collection of data.

The Regulation (EU) No 910/2014,  article 3 on electronic identification and trust services for electronic transactions in the internal market (eIDAS Regulation) defines an electronic signature as “data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign.

The basic elements of an electronic signature are:

  • To ensure the certainty that neither the signature nor the signed document can be altered and to guarantee that it is the document is the original one.
  • To ensure that the signatory is unequivocally identified. The electronic signature provides the certainty that the person or company sending the document is whom they say they are and that there is no identity theft.
  • To ensure that the authenticity of the signature cannot be rejected. The security provided by the electronic signature shows that the signatory is who they claim to be and who sign the document.

Electronic signature potential use cases

The electronic signature has many uses that can help companies to streamline their processes. Some of the most common uses are as follows:

  • Signature of contracts. Labour contracts, sale, and service contracts with providers, just to mention a few. Electronic signature, prevents signatories to sign, print scan and send the contract to the other party and then the other way round.
  • Authorization of the provision of service. Telecommunication companies can get their clients to sign contracts for the provision of services by electronic means so speeding up the signing up process thus enhancing customer experience.
  • Sign documents and contracts. An electronic signature will help HR professionals to process and track dozens of documents that employees typically need to sign. Accordingly, HR Departments can use electronic signature for:
    • Job vacancies
    • Labour contracts.
    • NDA’s and data protection.
    • Holiday requests approval.
  • Contract signature with providers of the company. All companies have service providers (IT, lawyers, etc.) and the electronic signature of contracts will not only speed up procedures but also providing a ground-breaking innovation.

Electronic signature procedures used by the public administrations

In addition to the documents and procedures above mentioned, an electronic signature is used in many procedures by public administrations such as:

  • Request for certificates (proof of work-life, retirement certificate or criminal record certificate).
  • Registry office formalities (request for a birth certificate).
  • Electronic notifications with Social Security (employees registration and deregistration).
  • Communications with the Treasury Department (tax filing, notifications).
  • Government subsidies and aid.
  • Notifications with judicial agencies, presentation of claims, etc.

Benefits of electronic signature for your business

The electronic signature can bring advantages to your company such as:

  • Cost reduction. As before mentioned, any wet signature implies printing and sending a document by all the signatories, wasting paper, ink, and other resources. The electronic signature eliminates all those expenses.
  • Security growth. The electronic signature binds whoever signs the document from a legal point of view and is fully valid. Article 25 of the eIDAS regulation establishes that:
    • “An electronic signature shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form or that it does not meet the requirements for qualified electronic signatures.
    • A qualified electronic signature will have the same effects as a handwritten signature.
    • A qualified electronic signature based on a qualified certificate issued for one Member State will be recognized as a qualified electronic signature in all other member states.
  • Time saving. The electronic signature reduces the procedures and, therefore, allowing you to sign documents seamlessly.
  • Contributes to sustainability. The use of resources such as paper is reduced so that the company using the electronic signature becomes a more sustainable company.
  • Improve satisfaction. Customers, employees, and providers will be more satisfied thus improving the reputation of the company.

Hence, the electronic signature is like a Swiss army knife providing numerous benefits to companies committed themselves to the digital transformation of their businesses.

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