Are E-signatures Valid in the Financial Sector?

Electronic and digital signatures are becoming a fixture in today’s financial business institutions, replacing traditional signatures and accelerating processes and approvals. In this article, we’ll take you through the legality of e-signatures—an important aspect that simply can’t be overlooked.

First, let’s take a look at their benefits and how they’re used.

Benefits of E-signing & How It’s Used in Finance

 

Using a digital document and signing solution can speed up and streamline your work and help you take your business to the next level. Not only can using a digital signature solution reduce turnaround time by up to 80%, but, according to Finance Online, financial institutions can reduce scanning errors by 92% and cut down on missing files by 62%.

Many duties that were formally connected to the old processes are now being replaced by e-signing and digital document management. From signing contracts, forms, and agreements to creating accounts and keeping digital trails and copies of important documentation, receipts, and invoices.

How Legal Are Digital & Electronic Signatures?

 

EThe simple answer: A signature is a signature, meaning electronic and digital signatures are as legally binding as traditional, wet signatures. While these wet signatures were, and generally today still are, the most common form of signature, an increase in awareness of the legal acceptance of e-signatures and an increase in customers’ expectations for digital interactions have led to an uptake in the use of e-signatures in business.

However, it’s important to understand that signature legality can vary depending on industry, country, state, and legal governing bodies. While a regular purchasing order can usually easily be signed electronically, a limited few things do still require a wet signature, such as a will or official court documents. If unsure, always check with your local laws or with a legal professional. Also, if you have any international dealings, be sure to consider that laws differ and other countries may not have accepted electronic signatures as much as the U.S.

What About Security & Privacy?

 

Safety and security in the digital document management and e-signing software sectors have come a long way. As a matter of fact, electronic signing has opened the doors to many new security features: Your documents and paper trails are more secure digitally; digital signatures are verifiable and very difficult to tamper with; and cloud storage allows you superior document access control.

Digital e-signature solutions also offer a variety of security features. Smallpdf eSign, for example, is ISO/IEC 27001 certified and GDPR and eIDAS compliant. eSign also comes with timeline activity tracking, secure document storage, and Long-Term Validation (LTV) timestamping.

If you’re looking to try an e-signature software solution, you can electronically sign a document with eSign or, if you take advantage of our 7-day free trial to unlock all premium features, even digitally sign your contracts. To find out more about the differences between electronic and digital signing, have a look at our article: The Difference Between Digital & Electronic Signatures.