As society becomes ever more reliant on digital processes, traditional mechanisms of conducting business have become more automated, with a number of industry sectors eager to tap into an in increasingly tech-savvy consumer base. While the last ten years have seen a plethora of electronic communication devices enter the marketplace, there has also been a demonstrated need for companies to replace paper-based processes with more efficient models, and e-signatures built on digital signature technology are leading the way.
While adoption of e-signatures has become widespread in the private and public sector, consumer awareness has been, in some ways, limited by a lack of understanding as to how digital signature technology fit into the picture. While electronic signatures have been recognized as a legal concept in federal law since the year 2000, there is anecdotal evidence to suggest that to the average person, a digital signature is the same thing. However, this is certainly not the case and the terms are not definitely not interchangeable.
An electronic signature is, like its paper equivalent, a legal concept. According to the U.S Electronic Signatures in Global and National Commerce Act, an e-signature is an “electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a person with the intent to sign a record.” Based on this definition, an electronic signature can be broken down into these components:
- A method of signing
- Data authentication
- User authentication
- Capture of intent
A digital signature, on the other hand, refers to the encryption / decryption technology on which an electronic signature solution is built. A digital signature alone is not a type of electronic signature. Rather, digital signature encryption secures the data associated with a signed document and helps verify the authenticity of a signed record. Used alone, it cannot capture a person’s intent to sign a document or be legally bound to an agreement or contract.
It’s About Capturing Evidence
What an e-signature solution built on digital signature technology really means is the ability to collect persuasive electronic evidence. This can be accomplished by recording and reproducing the exact process used to build the signer’s understanding of what they were agreeing to and signing. This includes the exact appearance and order of all the web screens, documents and legal disclosures that were presented, along with how long a person spent on each page and all the actions they took during the review and signing process, like clicking buttons to accept, sign, initial and confirm.
The more evidence an organization captures about what process was used, the greater the chance that the signed document will be enforced in a court of law. And that’s something most organizations contemplating e-signatures can stand behind. While many e-signature solutions on the market may meet the baseline requirements outlined by the ESIGN Act, organizations looking to minimize the risk of unenforceable records should aim to set the bar higher by choosing an e-signature solution built on digital signature technology.
We also have a handy infographic detailing the differences and how they work together.