A digital signature is a PKI-based digital certificate that verifies the signer’s identity and ensures that electronically transmitted documents and digital messages are not tampered with or forged. In the sense that both are unique to the signer, digital signatures are analogous to physical signatures, except that in the case of digitally signed documents, a digital signature provides much more security and assurance of the document’s origin, identity, and integrity. Digital signatures are legally binding in the United States and many other countries because they meet the highest security standards.

What is the difference between digital and electronic signatures?

Electronic signatures, also known as e-signatures, are a collection of solutions that use an electronic process to approve a document or transaction that requires a signature. Businesses and consumers around the world have accepted the speed and convenience of electronic signatures as documents and communication become increasingly paperless. However, there are a variety of electronic signatures available, each of which allows users to sign documents digitally while also providing some level of identity authentication.

One of these electronic signature technologies is digital signatures, which are the most secure type available. By encrypting the signature’s binding to the document, digital signatures use PKI certificates from a trusted Certificate Authority (CA) to guarantee identity authentication and document integrity. Other, less secure electronic signature types may rely on common electronic authentication methods like an email address, a corporate username/ID, or a phone number/PIN to verify the signer’s identity. Electronic signatures vary in industry, geographic acceptance, and legal acceptance due to various technical and security requirements. Digital signatures meet the most stringent regulatory standards, such as the Federal ESIGN Act of the United States and other relevant international laws.

What Is a Digital Signature and How Does It Work?

Because the PKI certificate, which is software code, is at the heart of a digital signature, the digital signature is not intrinsically visible. Document platforms, on the other hand, may provide easily identifiable evidence that a document has been digitally signed. This representation, as well as the certificate details displayed, differs depending on the document type and processing platform. A digitally signed Adobe PDF, for example, has a seal icon and a blue ribbon across the top of the document that indicates the document signer’s name and the certificate issuer.

Digital signatures can also include an image of your physical signature, date, location, and official seal, and can appear on a document in the same way that physical signatures do. Although the digital certificate remains valid, digital signatures can be hidden. When a document, such as a photograph, does not normally display the image of a physical signature, invisible digital signatures are useful. Information about the digital certificate, the issuing CA, and an indication of the document’s authenticity and integrity may be revealed in the document’s properties. If a digital signature is invalid for any reason, the document will display a warning that it should not be trusted.

What Is the Importance of Digital Signatures?

Agreements and transactions that were once signed on paper and delivered physically are now being replaced with fully digital documents and workflows as more business is conducted online. Malicious actors who want to steal or manipulate data for their own gain are often present whenever precious or sensitive data is shared. To minimise the risk of document tampering by malicious parties, businesses must be able to check and authenticate that these critical business documents, data, and communications are trusted and delivered securely.

In addition to protecting sensitive online data, digital signatures do not impede the effectiveness of online document workflows; in fact, when compared to paper processes, they often help improve document management. When digital signatures are in place, signing a document becomes simple and can be done on any computer or mobile device. And, since the digital signature is embedded in the file, it can be used anywhere it is transmitted and on any device. By providing the status of all documents, determining whether or not they’ve been signed, and watching an audit trail, digitally signed documents are also simple to control and keep track of.

Of course, it’s critical that these digitally signed agreements are legally recognised. Digital signatures comply with key standards such as the ESIGN Act of the United States, GLBA, HIPAA/HITECH, PCI DSS, and the US-EU Safe Harbor.

Digital Signatures Are Frequently Used

Digital signatures are now widely used for a variety of online documents to increase the effectiveness and security of vital business transactions that are no longer conducted on paper, such as:

Digital signatures are legally binding in contracts and legal documents. As a result, they’re perfect for any legal document that requires an authenticated signature from one or more parties, as well as assurance that the document hasn’t been tampered with. Digitally signing contracts and sales agreements authenticates both the seller and the buyer’s identities, giving both parties peace of mind that the signatures are legally binding and that the agreement’s terms and conditions have not been changed.

Financial documents: Financial departments use digital signatures on invoices so that consumers know the payment request is coming from the right seller and not a bad actor attempting to dupe the buyer into sending money to a fake account.

Data privacy is extremely important in the healthcare industry, both for patient records and research data. When sensitive information is shared between consenting parties, digital signatures ensure that it is not tampered with.

Government forms: Compared to many private sector enterprises, government agencies at the federal, state, and local levels have tighter rules and regulations. From approving permits to clocking in on a timesheet, digital signatures will help you save time and money by ensuring that the right person is involved in the right approvals.

Shipping documents: Keeping cargo manifests or bills of lading up to date helps manufacturers avoid expensive shipping mistakes. Physical paperwork, on the other hand, is inconvenient, difficult to access in transit, and prone to loss. Shippers and receivers can easily access a file, verify that the signature is current, and ensure that no tampering has occurred by digitally signing shipping documents.

What Are Digital Signatures and How Do They Work?

Public key infrastructure (PKI) is used in digital signatures and is considered the gold standard for digital identity authentication and encryption. PKI encrypts and decrypts messages using powerful public key cryptographic algorithms by combining two linked keys, a public key and a private key, into a key pair. A digital signature is generated and encrypted using the signer’s private key, as well as a timestamp of when the document was signed using the key, using both public and private keys that are generated using a mathematical algorithm to provide the signer with their own digital identity. These keys are usually kept safe with the help of a reputable CA.

This is how a digital signature is sent:

  • In the document platform or application, the sender chooses the file to be digitally signed.
  • The sender’s computer calculates the file content’s unique hash value.
  • The digital signature is created by encrypting this hash value with the sender’s private key.
  • The receiver receives the original file as well as its digital signature.
  • The receiver opens the associated document application, which recognizes the digitally signed file.
  • The digital signature is then decrypted by the receiver’s computer using the sender’s public key.
  • After that, the receiver’s computer computes the hash of the original file and compares it to the now-decrypted hash of the sender’s file.

The process of creating a digital signature is simple and straightforward for both individuals and businesses. You’ll need a digital signing certificate first, which you can get from a reputable Certificate Authority. You simply use the digital signature function of the applicable document platform or application after downloading and installing the certificate. Most email applications, for example, have a “Digitally Sign” button that allows you to digitally sign your emails.

When a document is signed with a private key and sent to a recipient, the recipient obtains the signer’s public key, which can be used to decrypt the document. After the document has been decrypted, the receiving party will view the document as it was intended by the user.

If the receiving party is unable to decrypt the document using the public key, the document has been tampered with, or the signature does not belong to the original signer.

All parties involved in digital signature technology must trust that the person who created the signature was able to keep their private key secret. If someone else has access to the signer’s private key, they may use it to make fake digital signatures in the signer’s name.

What happens if the file is changed after it has been digitally signed by either the sender or the receiver? Any change to the file generates a new hash value because the hash value is unique. As a result, when the receiver’s computer compares the hash values to verify the data’s integrity, the difference in hash values reveals the file has been changed. As a result, the digital signature would be deemed invalid.

The Advantages of Digital Signatures

While digital signatures have piqued the interest of many corporate executives and executives, what exactly are they? A digital signature is simply your electronic fingerprint. It allows you to electronically sign a document and validates the signer. It is a mathematical code that authenticates the document from the sender and ensures that it is unaltered when it reaches the recipient.

Digital signature security concerns are understandable. It does, however, use a widely accepted format known as a Public Key Infrastructure, which provides a very high level of security and is difficult to replicate. Digital signatures make office paperwork far more efficient, but laws governing this technology differ from country to country. The benefits of digital signatures are causing more offices and businesses to jump on board in favour of e-signatures, resulting in a far more efficient and secure workplace, digitally.

Digital signatures are legal and have the same value as hand signatures in many parts of the world, including North America, the European Union, and Asia.

The Benefits of Digital Signatures

You no longer have to wait for your manager to return from a vacation or conference to get that signature. With documents and contracts signed off with the click of a button, digital signatures ensure that businesses save money and time. There are significant cost and time savings, especially when the person required to sign is located in a different geographical area. Documents can be signed almost instantly and from any location. Digital signatures, whether on a tablet, phone, or computer, can ensure that this otherwise time-consuming task is completed in minutes.

Savings on ink, paper, printing, scanning, shipping/delivery, and travel-related expenses- Many businesses save money on ink, paper, printing, scanning, shipping/delivery, and travel. Other indirect costs, such as filing, rekeying data, archiving, or tracking, are also reduced.

  • Workflow Efficiency

Workflow efficiency Document management and tracking is simplified, requiring less effort and time. Many features of digital signatures aid in the speeding up of the work process. Email notifications, for example, help remind the person to sign, while status tracking lets you know where the document is in the process.

  • Better customer experience

Better customer experience Salespeople are not required to wait for customers to arrive at the bank or office. Documents can be signed on the spot. This is ideal for providing improved and personalised services, particularly in remote areas and smaller townships. The customer can interact with a company from anywhere, making services and businesses far more convenient, quick, and user–friendly.

  • Security

Security Digital signatures reduce the possibility of document duplication or alteration. Signatures are verified, authenticated, and legitimate using digital signatures. Signers are given PINs, passwords, and codes that allow them to authenticate and verify their identities, as well as approve their signatures. Time stamping records the date and time of the signature, allowing you to keep track of the document and reduce the risk of tampering or fraud. Digital signature security features ensure that documents have not been altered without authorization.

  • Legal validity

Legal validity This is admissible in any court of law, just like any other signed paper document. Audit and compliance are improved and simplified by time stamping and the ability to track and easily archive documents.

  • Validity in the future

Digital signatures are also valid in the future. With its long term signature formats, ETSI PDF Advanced Signatures (PAdES) and its eIDAS requirements have long term validity. Even if there are significant technological changes, digital signatures will remain valid for the foreseeable future.

  • Environmental advantages

As corporations and businesses become more aware of their role in sustainability, digital signatures help them reduce waste and be more environmentally friendly.

  • Efficiency in business

When compared to the benefits, the costs of incorporating digital signatures into work processes are relatively low. Digital signatures are ideal for both small and large organizations due to their faster contract turnaround time and reduced workflow time.

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