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Digital Signature vs. Electronic Signature
What is the difference, and which one is the right choice for your business?
These days, more and more companies, businesses, and entrepreneurs are using and implementing electronic signatures into their daily operations. However, many people don’t know the difference between digital signatures and electronic signatures. It is easy to confuse these two seemingly similar technological processes, yet throughout this blog post, you will learn the differences, when to implement each one of them and how to start signing right away.
What is an electronic signature?
An electronic signature, also known as an E-signature, is an efficient way to digitally sign your documents. It is a legally viable method to get approval or consent on digital documents. An electronic signature can be used in any instance where your physical signature would be used and is the online equivalent of your signature. The formal definition of an electronic signature is “an electronic sound, symbol, or process attached to or logically associated with a record…adopted by a person with the intent to sign the record.”. This means that your digital signature holds the same legal authority as your physical signature as defined under the Electronic Signatures in Global and National Commerce Act (ESIGN).
What is a digital signature?
A digital signature, it is a specialized form of electronic signature that uses cryptographic techniques and Public Key Infrastructure (PKI), it is your version of an electronic fingerprint that is embedded into a document. The process incorporates an algorithm that encrypts the signature to generate a unique digital certificate. This certificate is a receipt that securely associates a signer with any interactions within the document and a signer must have this certificate in order to be associated with a specific document. This makes unwarranted tampering practically impossible and ensures the integrity and security of your digital documents.
What is the difference between digital signature and electronic signature?
Electronic Signatures
Sign UpDigital Signatures
Security
May offer basic security; not inherently tamper-evident.
Provides strong security with encryption, ensuring document integrity and tamper evidence.
Verification
Often relies on simpler verification methods (e.g., email confirmations, click-through agreements).
Uses digital certificates and PKI, ensuring robust and verifiable authentication of the signer's identity.
Legal Validity
Generally legally accepted, though its reliability may be challenged in high-risk or regulated transactions.
Often carries stronger legal weight due to non-repudiation and robust authentication, meeting stricter regulatory standards.
Implementation
Easier and faster to implement with minimal technical requirements.
Requires more technical infrastructure, including digital certificate management and specialized software for signing and verification.
Cost
Typically low cost or free to use, with minimal investment required.
May incur additional costs related to obtaining and managing digital certificates and maintaining the supporting infrastructure.
Use Cases
Best suited for everyday, low-risk transactions where ease and speed are prioritized.
Ideal for high-security, high-risk transactions such as in banking, legal, and government sectors where data integrity is critical.
Interoperability
Generally compatible with a wide range of platforms and devices without special software.
Requires compatible software and systems to verify the digital certificate and perform cryptographic validation, potentially limiting use.
Purpose
A digital signature is used with the intention of protecting a document and it is frequently used when digital documents need to adhere to regulatory requirements such as but not limited to evidence collection in court cases as well as litigation documents, medical research reports, or documents requiring professional seals. Electronic signatures on the other hand are used to verify a document and indicate consent on the behalf of the signer. They are typically used with less sensitive digital documents such as invoices and contracts.
Security
A digital signature is created and enforced by using cryptographic algorithms in the encryption and decryption of digital documents. The digital signature is regulated and verified by certification authorities, and for it to be verified, proof of identity needs to be provided. With the electronic signature, no algorithms are used, but with Sign.Plus we encrypt all documents at rest using 256-bit Advanced Encryption Standard (AES), with each user’s unique encryption key, offering Swiss-grade security even for electronic signatures.
How it is represented
With digital signatures, the “fingerprint” is embedded into the signed document with the creation of the digital certificate. An electronic signature can be represented in a myriad of ways, it is not limited to the electronic version of your handwritten signature, but a password, a pin code, or any other form of confirmation or consent.
Electronic Signature
Advantages
- Convenience & Speed: Allows signing from anywhere, anytime, streamlining business processes.
- Cost-Effective: Reduces costs related to printing, mailing, and storing paper documents.
- User-Friendly: Often simple to use with minimal technical requirements.
- Environmentally Friendly: Promotes a paperless workflow.
- Integration: Easily incorporated into existing digital workflows and systems.
Disadvantages
- Security Concerns: May not provide robust security unless combined with additional verification measures.
- Authentication Limitations: Can be less reliable in proving the signer's identity without proper verification.
- Legal Ambiguity: Although widely accepted, some industries or jurisdictions may still question their legal standing.
- Limited Tamper Evidence: Lacks inherent features to detect if the signed document has been altered after signing.
Digital Signature
Advantages
- Enhanced Security: Uses cryptographic methods to ensure document integrity and protect against tampering.
- Strong Authentication: Provides robust verification of the signer's identity through digital certificates.
- Non-Repudiation: Legally binds the signer, making it difficult to deny having signed the document.
- Compliance: Meets stringent legal and regulatory standards in many regions.
- Tamper-Evident: Any modifications to the document post-signing are easily detectable.
Disadvantages
- Complexity: Implementation requires a higher level of technical knowledge and infrastructure.
- Cost: Involves expenses related to acquiring, managing, and renewing digital certificates.
- Interoperability Issues: Requires compatible software and systems for verification, which can limit usability.
- User Adoption: The process may be seen as cumbersome by users unfamiliar with digital certificate management.
- Third-Party Dependence: Relies on Certificate Authorities (CAs), which introduces an external element of trust.
Digital signature vs electronic signature – Which one is right for you?
So, digital signature or electronic signature? should you implement a digital signature or an electronic signature? When it comes to dealing with everyday, straightforward contracts and forms, an eSignature solution will provide you with all the necessary tools to sign your documents efficiently and hassle-free. You can further request the signatures of others to streamline the signing of your outbound documents as well.If the digital documents which require your attention are more sensitive, or need to adhere and comply with data and privacy regulations, a digital signing solution is more suitable for your needs. This method requires some extra steps for the setup, but provides all the security measurements required to comply with privacy restrictions.
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Built with support from
Schweizerische Eidgenossenschaft
Confédération Suisse
Confederazione Svizzera
Confederaziun Svizra
Swiss Confederation
Innosuisse - Swiss Innovation Agency
Confédération Suisse
Confederazione Svizzera
Confederaziun Svizra
Swiss Confederation
Innosuisse - Swiss Innovation Agency
