How Secure Are Electronic Signatures? Security, Encryption & Compliance

Electronic signatures have changed the way we do business. Today, you can be halfway across the world – perhaps sitting in a coffee shop in Sharjah – and approve a contract on your mobile phone within minutes. This seemingly magical convenience also raises a very human question: How secure is this digital handshake? The act of sending out a sensitive document brings with it concern about the security of the document from tampering or interception. Customers and executives alike express concern about the daily security measures and regulations associated with encryption, and there seems to be a continuous barrage of data breaches in the news.

This blog is about maximizing the benefits of going “paperless” while minimizing the risk of leaking sensitive information. It will guide individuals and businesses in understanding the process of signing documents electronically and how to ensure that the signed documents are secure, encrypted, and comply with applicable laws.

An electronic signature, or e-signature, is an umbrella term that encompasses any electronic indication of the individual’s intent to sign the document electronically. The e-signature can be a simple click of the “I accept” box when submitting an online form, or it could involve creating a hand-drawn signature with a touchscreen device.

Digital signatures are useful for situations where a greater level of security is required for signing a document, or where there are laws or regulations concerning the signing of a document. Digital signatures utilise cryptographic technology (PKC) to authenticate the identity of the signer and to protect the document from modification and corruption.

Digital signatures use a pair of keys – a private key known only to the signer and a public key shared with recipients – to create a unique, tamper-evident fingerprint for each document. When an organisation advertises a secure e-signature solution, it usually uses digital signature technology under the hood.

Growth of the e-signature market and adoption trends

Electronic signatures aren’t just convenient – they have become a critical part of digital transformation strategies across industries. Market research firms note explosive growth:

• Precedence Research reports that the global digital signature market was US$ 8.65 billion in 2024 and estimates it at US$ 12.22 billion in 2025; it is expected to reach US$ 238.42 billion by 2034 with a compound annual growth rate (CAGR) of 39.3 %. This growth is driven by the need for secure digital transactions in banking, healthcare, manufacturing and government sectors.
• Fortune Business Insights places the 2024 market at US$ 7.13 billion and projects it to grow from US$ 9.85 billion in 2025 to US$ 104.49 billion by 2032 at a 40 % CAGR. According to their study, approximately 39 percent of the overall e-signature industry is accounted for by North America. Furthermore, they believe that integrating artificial intelligence and blockchain technology will result in improved client experiences.

Analysts agree that despite their differing evaluations, the growth of the e-signature market across the globe can be attributed to three main factors: legal recognition, cost savings associated with its implementation, and the movement towards remote working conditions.

Legal Frameworks: eIDAS, ESIGN, and UETA

U.S. Legal Frameworks: ESIGN and UETA

The use of electronic signatures in the United States is controlled primarily via the ESIGN Act of 2000 and the UETA. The ESIGN Act notes that a contract or signature “may not be denied legal effect… solely because it is in an electronic form”.UETA, adopted by most states, complements ESIGN by standardising electronic transactions at the state level. Together, they confirm that e-signatures have the same legal validity as handwritten signatures when the parties consent.

European Union: eIDAS and eIDAS 2.0

The European Union’s eIDAS Regulation (EU) No 910/2014 sets EU-wide rules for trust services. It defines three levels of electronic signatures:

Signature type Key characteristics Legal effect

Simple Electronic Signature (SES) Data attached to a document (e.g., typed name or tick box). Suitable for low-risk transactions. Admissible as evidence but may require additional proof to enforce.

• Advanced Electronic Signature (AES) is uniquely linked to the signer and created using electronic signature creation data under the signer’s sole control. Detects subsequent changes to the data. Higher evidential weight than SES; typically used for moderately sensitive transactions.
• Qualified Electronic Signature (QES) meets AES requirements and is created by a qualified trust service provider using a qualified device and certificate. Uniquely identifies the signer. Legally equivalent to a handwritten signature across the EU.
• Under eIDAS 2.0, adopted in May 2024 (Regulation EU 2024/1183), the EU introduces the European Digital Identity (EUDI) wallet. Member states must provide citizens with a digital identity wallet within 24 months after the adoption of implementing acts, with full rollout expected by late 2026. The EUDI wallet enables individuals and businesses to store digital identities and verifiable credentials, such as professional licenses or age verification, and use them for cross-border e-signing and authentication. Large online platforms and service providers will be legally required to accept the wallet by 2027, ensuring cross-border recognition.

Other compliance frameworks

Countries outside the EU and the US have their own laws; for example, India’s Information Technology Act 2000 recognizes digital signatures as legally valid. In regulated industries, additional laws apply. The Health Insurance Portability and Accountability Act (HIPAA) in the US requires encryption when handling electronic protected health information (ePHI).

How e-signatures work: encryption & tamper-evidence

Encryption basics

Modern electronic signature platforms rely on a combination of symmetric and asymmetric e-sign encryption to protect documents:

• Symmetric e-sign encryption uses a single secret key to encrypt and decrypt data. The industry standard is AES-256 (Advanced Encryption Standard with 256-bit keys) for data stored on servers. AES-256 is mandatory in updated HIPAA requirements and is widely regarded as unbreakable with current computing power. Some older systems still use AES-128, which is considered secure for many purposes but provides less margin against brute-force attacks.
• Asymmetric e-sign encryption (public-key cryptography) uses a pair of keys. The private key remains secret and is used to create a digital signature; the public key can be shared and used to verify that signature. Modern platforms employ RSA-2048 or elliptic-curve algorithms, with RSA-4096 recommended for future-proofing. Asymmetric encryption enables identity verification without exposing private keys.
• Transport e-sign encryption protects data in transit between the signer’s device and the service. Providers typically use TLS 1.2 or TLS 1.3, ensuring that network traffic is encrypted and cannot be read by intermediaries. HIPAA’s 2025 update requires TLS 1.3 as the baseline protocol.

Public Key Infrastructure (PKI) and digital certificates

Digital signatures use Public Key Infrastructure (PKI) to link a signer’s identity to their public key via a digital certificate issued by a trusted Certificate Authority (CA). When a signer completes a document, the platform:

1. Hashes the document contents using a one-way cryptographic hash (e.g., SHA-256). If any data in the document changes later, the hash will not match.
2. Encrypts the hash with the signer’s private key, creating a digital signature. The signature is embedded in the document and often time-stamped.
3. Includes the signer’s digital certificate, which contains their public key and is signed by the CA. When the document is viewed later, software can decrypt the signature using the public key, recompute the hash and compare it. If the hashes match, the document is verified as authentic and unaltered.

This process ensures that anyone can verify the signer’s identity and the document’s integrity without knowing the private key. For qualified electronic signatures under eIDAS, certificates and signature creation devices must be provided by a Qualified Trust Service Provider, ensuring stricter oversight.

Tamper-evident sealing and audit trails

Electronic signature platforms create a tamper-evident seal over completed documents. If someone alters the document after signing, the seal will break, and recipients are alerted. Major providers embed audit trails that log every action: when a document was sent, opened, viewed, signed and completed; from which IP addresses; and through what authentication methods. These logs provide non-repudiation and are often admissible in court. 

These technical safeguards are complemented by key management practices. HIPAA’s 2025 update stresses that keys should be managed using Hardware Security Modules (HSMs); keys must be rotated, stored under strict access controls and subject to role-based access.

Identity verification and authentication

Encryption protects data integrity, but identity verification ensures the person signing is who they claim to be. Leading platforms employ multi-layer verification that might include:

• Email or SMS verification to confirm the signer’s contact.
• Knowledge-based authentication (KBA), where signers answer personal questions generated from public records.
• Government-issued ID checks using passport or license scans.
• Biometric verification, such as facial recognition or fingerprint scanning. Advanced systems can compare selfie images with ID documents.

International standards guide these processes. The National Institute of Standards and Technology (NIST) Special Publication 800-63-4, finalised in July 2025, sets guidelines for digital identity proofing and authentication. It emphasises risk-based identity verification, secure enrollment, multi-factor authentication and lifecycle management. 

For example, NIST recommends using multi-factor authentication that combines something you know (password), something you have (security token) and something you are (biometrics) for high-risk transactions.

Best practices for secure document signing

To take full advantage of electronic signatures while minimizing risk, organizations and individuals should adopt the following best practices:

1. Choose a reputable provider with strong encryption and compliance certifications: Look for services that use AES-256 encryption at rest, TLS 1.2/1.3 encryption in transit and PKI-based digital signatures. Verify certifications such as ISO 27001, SOC 2, PCI DSS, HIPAA, and FedRAMP.  Wesignature meets many of these standards.
2. Enable multi-factor authentication (MFA) for all signers and administrators. MFA drastically reduces account takeover risk. Adopt authenticator apps or hardware tokens rather than relying solely on SMS, and use biometric verification when possible.
3. Implement robust identity proofing:  Follow NIST SP 800-63-4 guidelines for identity verification. For high-risk agreements, use government ID checks or biometric verification. In Europe, prepare for the EUDI wallet to streamline user-controlled identity sharing.
4. Maintain comprehensive audit trails: Ensure the platform records each step in the signing process, including timestamps, IP addresses, authentication methods and document versions. This helps resolve disputes and demonstrates compliance.
5. Manage encryption keys securely: Use Hardware Security Modules or trusted cloud key management to store and rotate keys. Follow HIPAA’s 2025 guidance to use RSA-2048 or stronger keys for asymmetric encryption and to rotate master keys regularly.
6. Educate employees and signers: Since social engineering and phishing cause the majority of breaches, train users to recognize suspicious emails, verify sending domains and avoid clicking unknown links. Encourage them to report suspicious activity. Regularly test staff with phishing simulations.
7. Assess third-party risks: Supply-chain breaches are rising. Evaluate the security posture of vendors and partners, and include contractual requirements for encryption and breach notification.
8. Keep software patched: Many breaches exploit unpatched vulnerabilities. Maintain up-to-date operating systems, web browsers, and e-signature applications. Use vulnerability scanning and intrusion detection tools.
9. Plan for incident response: Have a documented plan for responding to a breach involving signed documents. This should include notifying affected parties, revoking compromised certificates, rotating keys and preserving evidence for legal purposes.
10. Monitor regulatory changes: Data protection regulations evolve quickly. Keep abreast of updates such as HIPAA 2025 encryption mandates, eIDAS 2.0 implementation acts, and new standards from NIST and other bodies. Use legal counsel to update contracts and policies accordingly.

Concluding Thoughts

Electronic signatures have matured into a secure, efficient, and legally recognized method for signing documents. The combination of cryptographic encryption, PKI-based digital certificates, tamper-evident seals, and comprehensive audit trails provides strong protection for sensitive data. 

Legal frameworks such as ESIGN, UETA, eIDAS, and HIPAA ensure that electronic signatures are not only convenient but enforceable across jurisdictions. Regulatory developments in 2025–2026, including stricter HIPAA encryption mandates and the EU’s digital identity wallet, will further strengthen trust in digital transactions.

However, security isn’t just about technology; it’s also about people. Data breach statistics show that human factors drive most security incidents. No amount of encryption can protect you if an attacker convinces an employee to hand over a password or if you sign a document after clicking a phishing link. 

By following the best practices outlined above – choosing compliant vendors, enabling multi-factor authentication, verifying identities, training users and staying current with regulations – organizations can enjoy the productivity benefits of secure document signing while reducing the risk of compromise. In a world where business happens at digital speed, the question isn’t whether to adopt electronic signatures, but how to implement them safely. By understanding the technology and taking proactive measures, you can ensure that your electronic signature security remains as trustworthy as a handwritten signature on paper.