Risks with electronic signing - Have we been getting it all wrong, all this time?
Despite electronic signing already being commonplace, the skepticism towards digitalizing “wet ink” signing is very much alive. I spoke with an expert and discovered that the sceptics might want to reconsider their stand.
“Are electronic signatures legal?”
“Is it safe?”
“Do they hold in court?”
“What does the law say about electronic signatures?”
We at Signicat get all these questions every day. And it’s no wonder: changing a long-trusted paper-based process should raise questions.
But after speaking with Samuli Kaijomaa, Nordea’s top expert on electronic signing, I’m left with a question: Are we - or the sceptics - focusing on the wrong thing?
“Risk management is specifically a key reason to digitalize signing,” says Kaijomaa.
Let that statement sink in.
Instead of speaking about the risks associated with electronic signing, Kaijomaa says we should focus on the risks with good old paper-based processes.
“Firstly, there are always risks associated with mailing and scanning documents: letters can be delivered to the wrong address, stolen from the mailbox and so on.”
“The second point, which is probably the most challenging with paper-based processes, is that you can never be sure who signed the document if it was signed and then mailed back. There is simply no verification of the signer’s identity.”
“Then there is lack of access control, meaning you can never be sure who opened or accessed the document before or after it was signed.”
“A paper document is also almost impossible to time stamp, unless a notary is used. So you can never be sure when the document was signed - and this is actually an important question in many cases.”
“The last one is that with a paper document, you can never be sure if the document was tampered with before or after it was signed. Document integrity is really important, especially when the document in question has been signed on paper and then scanned. In reality, the only way to ensure the document and the signatures are authentic, is to see the signing take place in front of you.”
Electronic signing on the other hand does help mitigate all these risks:
When using an eID, such as online banking credentials or Mobiilivarmenne in Finland, BankID in Sweden and Norway or MitID in Denmark, the signer’s identity is verified in a way that is compliant with the EU’s eIDAS regulation.
Similarly, electronically signed documents can be protected against unauthorized access also before the signing event, their integrity can be controlled and they can be protected against tampering - as well as time, because digital documents can be re-sealed to ensure the integrity of the contents in years or even decades to come.
Business benefits of electronic signing are measurable:
Cost efficiency - time savings
Environmental impact - paper and mailing documents is not a sustainable practice
Lead time to customer - even a significant agreement can be signed and finalized within minutes, instead of weeks
Process efficiency - when signing happens electronically, anyone can send documents to the customer for signing - for example back office - and customer advisors can spend their time on tasks that create more value
Shorter time to value to customer - when a contract is signed electronically, it's possible to deliver services faster, and the customer will have shorter time to value.
The best advise from Kaijomaa?
“Be proactive when it comes to electronic signing. Sooner or later, you will have to face the time of electronic signatures, so it’s best to be proactive and begin educating yourself and your organisation about the possibilities, risks and transforming your processes.”
Want to understand electronic signing better? Check out a recent webinar on electronic signing and how a major bank sees managing risks associated with it.
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