The law states that a signature on a contract is legally binding. This concept gets complicated when you bring e-signatures into the picture. E-signatures are performed digitally rather than by hand. A signature can be typed at the bottom of a contract and submitted as a legally binding signature. Despite some risks associated with this practice, it’s a rapidly growing trend that’s expected to continue growing in the future.
Electronic signatures allow digital businesses to accomplish contract work without otherwise unnecessary in-person contact with digitally encrypted signature processes.
E-signatures are Legally Binding
Before going further, it’s important to establish the legitimacy of electronic signatures. Although there’s been some debate, federal law states that they’re treated as genuine signatures. The Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA), which have both been in effect for more than a decade, declare that e-signatures are just as legally binding as pen and paper.
The Barwick v. GEICO in Arkansas, which actively questioned the validity of UETA legislation in an insurance case, illustrated this point. A client who had waived medical coverage on her insurance with an e-signature tried to claim in the lawsuit that her typed name did not bind her to the agreement. However, the Arkansas Supreme Court ruled in favor of the insurance company.
“To paraphrase the ruling: the Court saw no conflict between UETA and the auto insurance statute and noted that the UETA could not be more straightforward in allowing an electronic record to satisfy the law that requires a record to be in writing,” explains Andrea Masterton of eSignLive, an e-signature solution.. “The take-away? The law governing e-signatures is solid.”
The GEICO ruling is not the only case to support e-signatures, and consumers are beginning to trust electronic signatures more. This trust translates into greater implementation.
Digital Signature Market to Reach Nearly $5 Billion
The e-signature industry is bringing in a great deal of revenue. According to research from Moz, the global digital signature market is forecasted to bring the U.S. $4.98 billion in revenue between the years of 2017 and 2025.
This is thanks to the rapid adoption of e-signatures across the United States. As more companies are educated on e-signatures, they see the efficiency value of using them. Email has become a standard mode of communication for many organizations, and with such a large collection of online businesses coming out of the woodwork, e-signatures are a natural component of their business infrastructure.
Assists in E-signature Implementation
The rising revenue and utilization of e-signatures couldn’t have gotten this far without a little help. There are many advancements and initiatives that have helped to carry the work forward.
Let’s look at a few:
Ease of implementation is key to incorporating e-signatures in modern business. It’s easier than ever with modern technology, as long as you know how to work around certain obstacles.
“Today, SaaS-based solutions are making it easier to implement e-signature technology, but some challenges still remain,” says Rahim Kaba of the digital firm Vasco when discussing Forrester research on e-signature growth. “Look for a solution that offers compatibility with the most commonly used browsers and devices and integrates with third-party apps that your organization already use (e.g., Salesforce, SharePoint, etc.). Also, ensure the vendor you select will go the extra mile to ensure your success and provides abundant support resources to lower the learning curve for your users.”
Greater Authentication and Trust
Kaba goes on to discuss how a greater emphasis on security and authentication for digital firms reaches a broader audience who can use the service for their businesses. Customers want a service they can trust, so digital encryption and other security measures are a huge asset to the industry.
“As the occurrence of fraud and data breaches plague today’s digital business, enterprises are looking to more advanced authentication options to validate the identity of participants in a digital transaction,” Kaba says. “It’s not that organizations want to introduce additional friction into a consumer’s online or mobile activity, but rather they want to ensure there are adequate security features built-in – particularly for their customer-facing digital channels.”
Widespread Digital Capabilities
Kaba also points out the importance of accessing e-signatures on a broader spectrum, such as the public and private cloud and over on-premise wifi. He also discusses how newer security features like biometrics (such as fingerprint or facial scans) can also help the case of e-signatures.
There’s also a desire for e-signatures across different mediums. More signing methods can make the service available on a broader spectrum as increase security, allowing the service to grow even more.