The Role of Digital Signatures in Modern Business

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Not all that long ago, signing documents meant using a pen and physically applying a signature to the document. It was a process that required people to meet face to face. Coordinating the grand signing event took a great deal of time and effort. If changes needed to be made to the paperwork after the fact, the process was drawn out even more. As is the case with so many tasks today, though, quite a few advancements have been made, allowing the process to be faster and more convenient.

The Rise of Electronic Document Signing

Nearly twenty years ago, technology made its way into the realm of document signing. From there, neither pen nor paper was required for putting signatures on paperwork. Instead, people began making marks on computer screens and electronic pads. Though this method of signing was legalized and considered perfectly valid on many platforms, extra measures were required for security and authentication purposes. That’s where digital signatures came into play. For businesses, their clients, and members of their supply chains, understanding digital signatures is essential.

Exploring Electronic Signatures

Before delving into the intricacies of digital signatures, we need to explore the concept of electronic signatures. These are basically the signatures people apply to documents via electronic means. When you sign paperwork via a computer, phone, or electronic pad, you’re applying an electronic signature.

These documents can include employment agreements, contracts for the provision of products or services, leases, and divorce papers to name a few. Electronic signatures extend to signing for packages and approving debit card transactions on POS terminals among other situations.

Moving on to Digital Signatures

People often believe electronic and digital signatures are one and the same. That’s not quite the case. Digital signatures can work in conjunction with electronic signing, but the two items aren’t interchangeable. Digital signatures are codes applied to documents upon their creation. They’re additional authentication measures used to confirm that the information in the documents is valid. Certificate authorities, special software, and other tools are needed to generate digital signatures.

Digital signatures provide extra layers of security for document creators and their signers. When a document is created, a special algorithm generates a code that is encrypted into the document. If unauthorized changes are made after the code is applied, those changes send up red flags to alert people of the alterations. Those changes can generate codes of their own that don’t match the originals, or they may simply bear timestamps that fall outside those of the digital signatures. 

These codes also require senders and recipients to have specific public and private keys that match the digital signatures of the documents in question. Otherwise, they can’t decrypt the documents and view their contents. All this serves to prevent fraud on numerous levels. It protects the best interests of the document creators and recipients, preventing unauthorized individuals from intercepting the paperwork, signing it without approval, and making changes without permission.

Keeping Security at the Forefront

Electronic signatures have given businesses and their clients far more convenience than what was available to them before such technological advancements came to pass. Of course, electronic paperwork transfers and signatures alone could leave ample room for fraud on the part of all parties involved. From there, digital signatures provide heightened security and peace of mind. These bits of code serve as authentication measures and lend credence to documents. In turn, they help prevent fraudulent activity and make documents and the signatures applied to them legally binding. 

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