Understanding the difference between Digital and Electronic Signatures

Electronic and digital signatures are signing solutions applied to or associated with letters, contracts, financial documents, and any other digital record. The electronic process for accepting a document or transaction with a signature is legally enforceable in most business and personal transactions in almost every country in the world. Businesses and consumers throughout the world have embraced the speed and simplicity of electronic signatures as documents and communication become increasingly paperless.

The main distinction between a digital signature and an electronic signature is through the identification of businesses and signers. However, digital signatures differ from other types of electronic signatures in terms of purpose, technological implementation, geographic application, and legal recognition.

This article is the first of a five-part series that analyses the unique features, anatomy, and use of digital signatures.

Definitions

Any electronic process that signifies acceptance of an agreement or a document refers to an online signature, electronic signature, or eSignature. On the other hand, a digital signature is a type of eSignature based on a certificate. By cryptographically binding each signature to the document, digital signatures leverage certificate-based digital IDs from trusted service providers to validate signer identification and present proof of signing.

What is an Electronic Signature?

Electronic signatures commonly referred to as eSignatures refer to many different types of electronic signatures. Each type allows users to digitally sign documents while offering some degree of identity authentication. While both electronic signature and digital signature are equally capable of identifying a signer and capturing legal signatures, many consumers do not have a digital signature certificate, which implies they are unable to provide digital signatures. Consumers typically opt for the convenience and versatility of eSignature without having to incur additional costs of using digital certificates.

What is a Digital Signature?

A digital signature is the most secure type of electronic signatures. By encrypting the signature’s binding to the document, digital signatures use PKI certificates from a trusted Certificate Authority (CA) to provide identity authentication and document integrity.

A PKI is embedded in a digital signature signing process to identify both the party requesting a signature and the signer. A digital signature is a standard component used in financial transactions, software distribution, contract management, and other cases where forgery and tampering need to be prevented.

Other, less secure electronic signature types rely on standard electronic authentication mechanisms like an email address, phone number, or PIN to validate the signer’s identity. Electronic signatures vary in industry, geographic acceptance, and legal acceptance due to varying technical and security needs while the most stringent regulatory requirements are met via digital signatures.

Singapore Law

The Electronic Transactions Act, Cap 88 (ETA), and the Electronic Transactions (Certification Authority) Regulations 2010 govern the use of electronic and secure electronic signatures in Singapore. Personal data used in secure electronic signatures are likewise covered by the Personal Data Protection Act of 2012 (PDPA).

Electronic signatures and secure electronic signatures are both enforceable and accepted under the ETA. In proceedings involving a digital signature, the signature has the same enforceability presumption as a paper-based signature i.e., wet signature. This presumption does not apply if the electronic signature is not a secure electronic signature. Digital signatures based on digital certificates issued by qualified CAs are deemed trustworthy by default and are legally recognized.

The Secure Choice

KRIS Document Management System (DMS) employs the use of digital signatures to reduce the risk of alterations and duplication and increase compliance and security. Digitally signing your documents offers other benefits such as minimizing paper use, saving on time to get signatures, and improving operational efficiency.