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 Signature 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
The process of selecting an electronic signature solution depends on the ability of the vendor to address the different requirements of an individual or a company. 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.
It is known that the electronic signature regulations provide a list of comprehensive frameworks for ensuring a high degree of assurance during the e-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.
The best electronic signature software is capable of meeting all requirements while making it easy for organisations to ensure legally binding signatures that are valid in all countries.
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.
With so many customers engaging in high-risk transactions during remote working, organisations must ensure that the technology solutions have sufficient levels of security and assurance about the identity of each signer.
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. The device used by people and the transactions that the devices carry out should be able to protect the digital customer experience in all ways.
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 signatures is at an all-time high because more individuals and businesses have started engaging with employees, customers, and stakeholders after the pandemic.
This reduces any necessity for businesses and people to meet personally and reduces the administrative burden during this challenging time.
If the electronic signature risks are managed properly then this technology can give people the ability to keep doing business and generate value even during the lockdown.