Digital Signing:5 Types of Electronic Signatures

E-Signature

Astragraphia Document Solution - Digital IDs are changing the way we do business. Other countries are following suit to fully implement its national digital ID by 2024. Offering a suite of services that include an electronic Know-Your-Customer verification process and secure authentication driven by facial recognition technology, completing the entire process of reviewing, endorsing and sending important documents like contracts, insurance papers and loan applications online is fast becoming the norm.

This process of authenticating and acknowledging documents includes both the digital ID application so that the user’s identity can be verified as well as secure e-signature software such as DocuSign so the user can sign to confirm the agreement. After receiving a finalizing signature in under 5 minutes, the user would have successfully completed the process without leaving home or the office.

Despite e-signatures increasing popularity thanks to the ease, time-saving qualities and seamless functionality they provide, many of us that use them daily are still unclear about the details. What types of electronic signatures are available, and what is their legality? When is a simple “I accept” button enough and when is it necessary for verification to go along with digital signature signing? Different types of electronic signatures serve different purposes. Interested to find out more? Keep reading.

What is an e-signature and how does it differ from wet signatures?

A wet signature is understood as traditional ink-on-paper signing.

Defining an electronic signature however is more complicated. Many of us use the terms “digital signature” and “e-signature” synonymously, however as the industry continues to innovate and make new advancements (and new terms) for more secure, user-friendly ways of agreeing online, it is important that we understand how to define e–signatures.

Electronic signatures refer to the online version of an offline handwritten signature. The criteria it satisfies is that it is “attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”  Electronic signatures consist of a broad category that includes digital signatures. The different types of signatures serve a variety of purposes and come with unique technical implementations.

Types of electronic signatures

1. Watermarks

If you’re a professional photographer, you may be familiar with watermark signatures This type of electronic signature helps image owners and photographers ‘sign’ their images to prevent them from being used without authorisation. It indicates to others that the image is protected by copyright and if it is used without permission, photographers can easily identify the images as their own for further action to be taken. 

2. Standard E-signatures

This refers to the online version of an offline handwritten signature. The criteria it satisfies is that it is “attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” As companies everywhere start their Digital Transformation journey or continue ongoing efforts to move offline processes online, this type of signature is often required for signing digital paperwork over email or other web-based workflow platforms. It may not always be legally binding. It is used to streamline digital work processes e.g. you may need a manager’s electronic signature to approve a drafted pitch document before you move to the next step of sending it out. 

3. Click Wrap Signatures

Do you recall the last time you accepted the privacy policy of a new website or accepted the terms and conditions before making an online purchase? Chances are you accepted it using a click wrap signature. Otherwise known as a click-and-accept signature, click wrap signatures offer a convenient, fast and user-friendly way of legally gaining consent. Simple but powerful, this type of signature creates enforceable back-end records when implemented correctly. As more companies try to build their own click wrap solution3, implementation is a concern as it can result in hefty legal fees if done incorrectly.

Types of digital signatures

According to Microsoft, digital signatures can be defined as an electronic, encrypted, stamp of authentication on digital information. This specific type of electronic signature comes with enhanced security and protective features for both signers and service providers.

Digital signatures are similar to electronic signatures in that they’re an electronic representation of a signature. The major difference is the process used to create them and the security protocols surrounding them.

A digital signature uses what’s known as PKI (public key infrastructure) to encrypt data. The PKI is maintained by a certified digital certificate authority and the signer needs a digital certificate with a limited validity. A public key and private key are used together to encrypt the signature. If the keys don’t match then the signature is invalidated.

Of course, there are more nuances to the processes but it creates a much higher level of security. Digital signatures are required for different situations depending on the jurisdiction you find yourself.

1. Advanced Electronic Signatures

These electronic signatures require:

identity verification distinctive to the signer

a signature record that shows evidence of tampering

in the event the accompanying data has changed, the signature be deemed invalid

Here’s how it works:

A Public Key Infrastructure (PKI) is used to encrypt data

Each digital signature transaction includes both a private key – not shared and used only by the signer to sign online documents and a public key – available to all and used by those who must verify the signer’s e-signature.

Both these keys are used together to encrypt the signature.

If the keys don’t match then the signature is not verified.

With this type of signature, a lot more goes into ensuring security and protection. Usually, for advanced electronic signatures, the PKI is maintained and enforced by certified digital Certificate Authorities (CA), the software used to manage, renew and revoke keys and certificates. When signing these important documents, you need to be able to trust that the documents and keys are created securely and that valid keys are used and that’s where CAs come in. They ensure key security and provide the necessary digital certificates that can be tracked and audited.

2. Qualified Electronic Signatures

Every country sets their own rules when it comes to what is recognised as a legally binding e-signature (Singapore eSignature Legality4). The European Union law only considers Qualified Electronic Signatures as the equivalent of a handwritten signature. These electronic signatures have the highest level of security as they require face-to-face identity verification. They are used for high-value business contracts, to meet regulatory requirements for cross-border agreements. These e-signatures can only be created if it is backed by qualified certificates enforced by Qualified Trust Service Providers (TSP).

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