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e-Signature & e-Approval

e-Signatures & e-Approvals: A guide to selecting the right solution for your organizationDriven by the digitization of business processes across all industries, the use of electronic signatures to expedite workflow and minimize costs is on the rise. Not all e-signature & e-approval platforms are equal, however, with a wide discrepancy in security and functionality between providers. Given the growing cybersecurity threat, organizations should prioritize an e-signature solution with the maximum level of built-in security throughout all stages of the process. E-signature & e-approval platforms that prioritize authentication, non-repudiation, compliance, and comprehensive audit trails are recommended.

Industry snapshotWith the widespread adoption of cloud-based solutions, online commercial transactions, and mobile technology, business and commerce are becoming overwhelmingly digital. Consumers and companies alike are seeking faster, more convenient, and cost-effective business transactions with guarantees of accuracy, reliability, and transparency.

In line with an increased demand for security and workflow efficiency, the use of electronic signatures has surged. With increasing consumer confidence in e-signature technology, the global e-signature market is poised to grow at a compounded annual growth rate (CAGR) of 39% in terms of value during 2016-2020, according to P&S Market Research.

In North America, the e-signature market is being driven primarily by the increased adoption of e-commerce and the rising demand for faster banking and insurance processes and services. The increased need for greater security and risk management within the banking financial services and insurance (BFSI) sector is expected to further boost the growth of the e-signature market.1

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How e-signatures are usedE-signatures play a vital role in many industries, streamlining business processes while ensuring data integrity and security.

DIGITAL WORKFLOW ACROSS ALL INDUSTRIES• Facilitating automation of business approval processes (e.g., expense

reports, time sheets, vacation requests)

• Creating legally-enforceable electronically-signed agreements, NDAs and contracts

• Submitting tax, employment and insurance documents

• Digital onboarding for employees and customers

• Reducing the risk of regulatory non-compliance and legal implications

• Shortening project timelines and reducing environmental footprint with paperless document flow and storage

FINANCIAL SERVICES (BANKING/INSURANCE)• Signing loan disclosures, mortgage statements and contracts

• Opening accounts and filing tax documents

• Improving customer satisfaction with more transparent path to loan approval

• Shortening loan closing times

• Creating digital audit trail to prove a proper process was followed when handling customer complaints2

REAL ESTATE• Signing contracts and offers of sale

• Sending floor plans, blueprints, or images for approval

• Expediting processing of mortgage applications

• Eliminating unnecessary cost and wasted time printing, faxing and couriering documents

HEALTHCARE• Streamlining patient admission, registration and consent processes

• Automating and securing the exchange of sensitive medical records while ensuring HIPAA compliance

• E-approval of x-rays, medical reports and other documents

• Maintaining digital archives for efficient, cost-effective storage and retrieval of records

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The legal pictureIn addition to state-level regulations of the Uniform Electronic Transactions Act (UETA), e-signatures became legal when President Clinton signed (without a pen!) the Electronic Signatures in Global and National Commerce Act (ESIGN) on June 30, 2000. According to the Act, e-signatures, contracts, and other records relating to the electronic transaction “may not be denied legal effect, validity, or enforceability solely because it is in electronic form”. The bottom line is that electronic signatures and records are as valid and legal as their paper counterparts for both foreign and domestic commerce transactions.

Despite satisfying legal requirements, the ESIGN Act does not eliminate the risks related to e-signatures or e-documents. The Act simply provides the opportunity for organizations to adopt technologies and procedures that deliver the required attribution, data integrity, non-repudiation, and reliability.3

Security riskResearch from EMA found that 75% of organizations believe their risk of data loss or leakage is high or very high, while 50% of organizations believe they have regular confidential data leakage. Accordingly, 86% of companies are investing in a technology solution to address the threat. Finding a secure and expedient method for sharing and signing documents is a primary concern of forward-thinking organizations.

The level of security offered by e-signature platform providers varies across the industry. Many cloud-based platforms keep the document in the cloud while sending a link to the recipient. Because this unsecured link can be sent to anyone, the document is vulnerable to attack. To point, a major e-signature vendor was recently hacked.

Not all e-signature solutions can provide authentication or mitigate repudiation risks associated with digital transactions. In fact, in 2016 a California judge sanctioned a lawyer for using a well-known e-signature solution in bankruptcy filings because authenticity of the e-signatures could be not proven.

More advanced e-signature solutions offer built-in security features—such as document hashing, digital certificates, biometric authentication, time stamps, and Quick Response (QR) code readers—to address all security, authentication, compliance, admissibility, and repudiation requirements.

Research from EMA found that 75% of organizations believe their risk of data loss or leakage is high or very high, while 50% of organizations believe they have regular confidential data leakage. Accordingly, 86% of companies are investing in a technology solution to address the threat.

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Types of signatures There are four basic types of signatures—with varying levels of security risk, convenience, and usability— that are employed in business transactions.

1. WET SIGNATUREA wet signature is simply a manual pen-on-paper signature, or comparable mark, that indicates the person signing acknowledges and/or agrees with the contents of the document.

PRO | UBIQUITOUS

Signing documents by hand is a common occurrence and people are comfortable with the process.

CON | INEFFICIENT & UNSECURED

Gathering physical signatures on hard-copy documents creates a workflow bottleneck. Sensitive and confidential information is at risk for privacy violations and fraud when physical documents are shared externally, or even within an organization.

PRO | SIMPLE

Many apps on the market allow you to easily create a GIF or JPEG of your signature.

CON | UNSECURED

An image of your signature offers no security protection, with zero repudiation and no way of proving authenticity.

2. ELECTRONIC STAMPA stamp is a digital image (e.g., GIF) of a person’s signature or identifying mark.

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3. E-SIGNATURESE-signatures are legally-binding electronic versions of a signature.

4. DIGITALDigital signatures employ public key infrastructure (PKI) to “sign” documents with a digital footprint. Pairs of cryptographic public and private keys are used to encrypt and decrypt data.

PRO | EFFICIENT

Signing and approving documents with an e-signature is typically a simple, speedy process.

CON | SECURITY VARIES

Security is not equal across all e-signature applications. The security risk of e-signatures depends largely on the software used to sign and approve documents.

PRO | SECURE

Digital signatures provide a high level of security and repudiation.

CON | COMPLEXITY

Implementation and management of digital signatures is complicated. Assignment of public & private keys, hashing, and issuance and registration of digital certificates by certificate authorities (CA) and registration authorities (RA) are required.

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What is the difference between digital signatures & e-signatures?Although the terms are often used interchangeably, digital signatures and e-signatures are not the same. Initially used in the intelligence community and the banking sector, digital signatures use public key cryptography to encrypt and share data. With PKI, a message or document signed with the sender’s private key can only be opened by someone who has access to the sender’s public key.

Digital signatures also use a technique called hashing to maximize security. A hash (aka message digest) is a unique, fixed-length string of characters—essentially a fingerprint of the data—generated using an MD5 or SHA-1 algorithm. The sender generates a hash of the document and sends it along with the encrypted message. The recipient decrypts both the message and the hash and generates another hash of the received document. If the two hashes match, the recipient can be assured that the message and document are authentic and have arrived intact.

Implementation of a digital signature platform is often expensive, complicated, and requires expertise to manage. Digital signature solutions work well inter-nally but have limitations for sharing documents outside of the organization due to the complex navigation and authentication steps of digital certificates and public and private keys.

Electronic signatures, or e-signatures, are defined in ESIGN as “an electronic sound, symbol, or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.” In other words, e-signatures are a legally-binding way to sign digital documents and are as valid as their paper equivalents. Although fully legal, e-signatures are only as secure as the e-signature platform used to generate and exchange them.

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Benefits of e-signature solutionsDue to numerous shortcomings in the areas of security, workflow efficiency, and convenience, handwritten signatures on paper documents are being phased out of business transactions and replaced by e-signatures on digital records.4 The benefits of implementing e-signature solutions are numerous:

SAVE TIME • Increase efficiency by improving business workflow

• Reduce signature turnaround time by 80 percent vs. paper5

• Avoid time-consuming processes, such as scanning, faxing, and printing

INCREASE ACCURACY• Eliminate error-prone manual processes

• Automate signing processes and approval requests to reduce man-made errors

• Ensure consumers fill out forms completely and sign everywhere that is required

SAVE MONEY• Reduce document handling costs (postage, courier, fax) by up to

$20 per document6

• Increased workflow efficiency translates to bottom line

• Cut paper, printing and archiving costs

INCREASE SECURITY• Keep data secure by encrypting signatures and records

• Eliminate the paper trail

• Reduce fraud and improve compliance

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Risk factorsTo mitigate risk when deploying an e-signature solution, several factors should be evaluated:

AUTHENTICATIONAn e-signature solution should be able to authenticate the user, proving the document is actually signed by the person who claims to have signed it.

REPUDIATIONE-signature solutions should provide non-repudiation, enabling not only the identification of the sender but the ability to prove the document has not been altered since it was signed.

ADMISSIBILITYIn addition to verification of the user identity and document integrity, a detailed audit trail that captures all activity related to the execution of the e-signature transaction is required for e-signatures to hold up in court.

COMPLIANCEReputable e-signature solutions ensure compliance with e-signature laws (e.g., ESIGN in the US) and industry-specific requirements (e.g., HIPAA in healthcare).

IMPROVE THE EMPLOYEE EXPERIENCE• Automate routine approvals (e.g., expense reports, time sheets,

vacation requests)

• Offer fast, convenient and easy-to-use tools to optimize workflow

• Simplify HR onboarding for new hires and group benefits plans

IMPROVE THE CUSTOMER EXPERIENCE• Offer faster and more convenient service, increasing customer

loyalty by as much as five times over paper processes7

• Provide peace of mind with secure, confidential transactions

• Streamline customer onboarding

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Designing an e-signature solution: ConsiderationsWhen implementing an e-signature platform for your organization, examine the security features and e-signature/e-approval functionality judiciously to ensure the most secure, efficient, and cost-effective solution.

DOES THE SOLUTION SUPPORT E-SIGNATURES & E-APPROVALS?Many e-signature solutions enable the electronic signing of documents but do not provide a streamlined e-approval process for approving repetitive e-forms, such as expense reports, time sheets, or vacation requests.

CAN YOU ATTACH ANY KIND OF DOCUMENT?An effective e-signature solution enables you to attach any type of document, image, or video (e.g., PDF, MS Office files, MP4, JPG) for signing or approval—whether you’re signing blueprints or contracts, or approving expense reports or budgets.

DOES THE E-SIGNATURE APPLICATION WORK SEAMLESSLY WITHIN EXISTING EMAIL?A third-party e-signature application is cumbersome, adds extra cost, and may not delivery bank-grade security. E-signature solutions that work within your current email are seamless and secure.

DOES THE SOLUTION OFFER SSO (SINGLE SIGN-ON)?Signing and requesting documents for approval is simplified by creating a secure community with SSO authentication.

CAN YOU PROVE WHO SIGNED?E-signature solutions should provide authentication of the identity of the signing party.

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WHAT LEGAL & COMPLIANCE REQUIREMENTS APPLY?The e-signature platform should be compliant with regulations such as: ESIGN, UETA, GLBA, HIPAA and HITECH in the US; PIPEDA in Canada; and the Electronic Transactions Act in Australia.

DOES IT SUPPORT NON-REPUDIATION?Effective e-signature solutions should enable easy and undeniable verification of the user, signature, and documents.

IS THE SOLUTION MOBILE?The ability to sign or approve documents from a phone or tablet is a necessity in this mobile age.

DOES THE SOLUTION SUPPORT E-AUDIT & E-DISCOVERY?To mitigate admissibility risk, a detailed timeline of all activity related to the execution of the e-signature transaction creates a valuable audit trail.

ConclusionIn light of the burgeoning e-commerce marketplace and digitization of business processes across all industries, the use of e-signatures and e-approvals is becoming integral to driving efficient, cost-effective workflows. Forward-thinking companies are meeting the evolving market demands by implementing security-focused e-signature solutions to mitigate the risks of conducting transactions online.

With a sophisticated and secure e-signature and e-approval platform, organizations can ensure the authenticity, compliance, non-repudiation, and integrity of their business transactions. A complete solution includes e-approval functionality to streamline the approval process, plus detailed audit trails and support for third-party archiving to facilitate e-discovery and the legal hold process.

A comprehensive e-signature solution provides fast, simple, and secure e-signature and e-approval capabilities—without the added cost or complexity of additional encryption software—while offering complete control of and visibility into an organization’s business transactions.

1. Global E-Signature Market to Witness a Growth of 39.2% CAGR During 2016 - 2020: P&S Market Research – PR Newswire

2. E-Signature Approval – Independent Banker

3. Electronic Signatures in Global and National Commerce Act – ReedSmith

4. Why 2017 is the Year to Go Digital in Customer Onboarding – IT World Canada

5-7. Securing the New Digital Enterprise – DeliverySlip

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