Electronic Signatures Risks: The use of electronic signatures has been becoming prevalent in recent times. Particularly after the impact of COVID-19 and the shift to working remotely, many organisations have made the move to create an online signature.
Even though it is certain that the use of online signatures enables business continuity and promotes efficiencies, they can also expose organisations to increased risks of fraud, unauthorized signing, and non-compliance.
That said, a comprehensive internal process accompanied by recognized signatory authority can reduce the electronic signature risks and increase the enforce ability of signed records.
What Do You Mean By Electronic Signature?
An electronic signature is essentially a signature in an electronic form used on a digital document or for communication. Some of the common electronic signatures include a name typed at the end of an email, a signature made with an online signature platform, a signature done on a screen using a stylus, a name typed at the end of an email.
Electronic signature technology is well known for its ease of use and implementation. Many businesses and government organisations see an instant ROI because of the net positive impact on the customer experience.
However, it is significant that business owners look way beyond front office requirements and engage with different office teams so that an adequate e-signature solution for small businesses can be implemented.
4 Common Electronic Signature Risks That You Need To Know
Given the benefits of electronic signatures, it must also be acknowledged that electronic signature solutions do not come without any risks. The businesses must be able to gain buy-in from stakeholders before choosing and implementing a solution.
Any individual or a business that is looking to purchase an electronic signature must take some time to complete due diligence. This will ensure that no electronic signature risks and extra costs are suffered in the long term.
More than anything, it is important to remember that customer experience is the most important driver for e-signature but since businesses complete most transactions remotely, they have a need to protect the digital customer experience. Extra costs should be limited without diminishing the experience and adoption.
That said, there are some common electronic signature risks that everyone must be mindful of while implementing this solution.
Electronic Signatures Risks:-
1. Organisation-Wide Risks
With the online signature market maturing and businesses moving beyond the initial set of use cases, the companies must be prepared for an e-signature enterprise strategy that supports inevitable business requests without any inconsistency, overlapping, and redundancy.
A common risk of using electronic signature is that the organisation-wide requirements get ignored. To avoid this, organisations should be clear about the use cases from all corners of the business while being in a position to evaluate the vendor’s ability in meeting those requirements.
The trick is to choose an electronic signature solution for small businesses that is expert in achieving digitization across different departments of an organisation. There must be excellence for delivering integrated applications with proper governance.
The customers should also be comfortable building once and scaling across all business lines and departments. This method is built on enterprise deployment and shared service implementation than any other product in the market.
2. Legal Compliance Risks
Choosing an e-signature solution hinges on vendors’ ability to meet diverse individual or corporate requirements. One of the common electronic signature risks is the inability of the solution provider to offer legal compliance.
Things such as multiple signature methods, verifying the identity of an unknown individual, authenticating customers, establishing detailed audit trails, and complying with applicable regulations are important. There are many industries worldwide where organizations do not disclose the identity of individuals such dating sites, pics and so on.
Electronic signature regulations offer robust frameworks for ensuring high assurance in the signing process.
However, choosing the right e-signature software provider is also important to take care of the compliance burden and reduce the legal risks.
Top e-signature software ensures legally binding, globally valid signatures, meeting all organizational needs effortlessly.
It also helps the customers to know other needs of digital identity verification and authentication. This helps in establishing trust for remote and faceless transactions.
3. Security Risks
Security is another electronic signature risk while choosing a suitable platform. It is an important factor during electronic signature evaluation and selection.
Organizations must prioritize secure technology solutions to verify signer identities during remote transactions.
It is important for the electronic signature solution to be chosen by some of the globally renowned security-conscious organisations. Moreover, the software should also be designed according to the best practices that can ensure security. The best regulatory, IT, and industry principles must be used for data protection and security.
This risk can be curbed easily by going beyond electronic signatures and enabling businesses to form trust in people’s identities. Devices and transactions must safeguard the digital customer experience comprehensively.
4. Unauthorized Signing Risks
Yet another common electronic signature risk is that there is a danger of unauthorized signing. All organisations must be able to ensure that all signatories are suitably authorized. Moreover, the signatories should also know what they are authorized to sign.
At present, there are e-signature technologies that allow organisations to efficiently and safely manage the signatory lists while being online. What’s more, there is a clear list of audit trails as well so that all the changes can be monitored.
Conclusion – Electronic Signatures Risks
The demand for electronic signature is soaring post-pandemic as businesses engage more with employees, customers, and stakeholders.
This reduces any necessity for businesses and people to meet personally and reduces the administrative burden during this challenging time.
Properly managed electronic signatures enable continued business operations and value creation during lockdowns.
