Future Ready – Procurement Leader’s Quick Guide For Digital Signatures
The COVID-19 pandemic has made the digital ecosystem play a pivotal role in people’s lives across the world. The global digital signature market is projected to reach USD 14.1 billion by 2026, at a Compound Annual Growth Rate (CAGR) of 31.0%.
Digital signatures are like traditional handwritten signatures, except that they are less prone to fraud as compared to handwritten ones. This ensures the protection of data and provides a controlled and seamless workflow.
The chances of losing a digital file are less as compared to a paper-based document. Digital signature solutions transform business by automating the business processes. The government’s rules and regulations and therefore legal acceptance of digital signatures vary geographically. However, digital signatures are legally accepted and are becoming the norm.
Globally, governments are supporting the adoption of digital signature solutions because they create efficiency and security within the documentation processes. The Directive 1999/93/EC was implemented by the EU in 1999, and the U.S. passed the Global and National Commerce (E-Sign) Act in 2000 to grant such solutions legal validity.
Key Reasons Propelling the Expansion of the E-Signatures Market:
1. Government Initiatives
Governments across the world are framing regulations governing the usage of e-signatures, creating compliance requirements, creating an ecosystem that favors the usage of e-signatures.
Business processes are going digital and crossing borders. In such a scenario, waiting a week to receive signed paper contracts does not make sense to businesses.
The COVID-19 pandemic has transformed the way business is done. Digital is the new way of life and when all business processes have gone digital, so has the ability to send documents and receive signatures.
4. Demand for high-end security solutions
Electronic signatures provide archiving features and are tamper-proof – they protect both the sender and recipient against any fraudulent activity.
The COVID-19 pandemic has transformed every segment of society. It has created a dependency on online business, and industries like the BFSI, Government, Healthcare & Life Sciences, Legal, Real Estate, and others are increasingly going digital to provide consumers services. The internet ecosystem plays a pivotal role today all over the world.
Sectors Experiencing Maximum Growth in Digital Signatures:
1. Banking and Financial Services
BFSI organizations are witnessing digital transformation at every level with rapidly changing customer demands. Because these organizations house critical data and information, they have witnessed strong adoption of digital technologies in recent years.
Digital signatures help BFSI firms simplify complex business processes by offering enhanced security and improved cycle time for providing customer services. Hence we see an increase in the usage of digital signatures in the BFSI sector.
2. Software and Services
The software and associated services category will still dominate the digital signature market until 2030, on account of the advancements being made to such solutions, including encryption and public key infrastructure (PKI) services, which make the communication and sharing of digital documents secure.
Regulations concerning data privacy, secure information storage, and acceptable types of electronic documents and signatures are important within the healthcare industry. Electronic signatures that meet regulatory criteria can improve compliance, increase security and reduce paper waste. Managing contracts and signatures for doctors, patients, suppliers, partners, and employees is crucial.
4. Legal Services
Legal professionals belong to an industry loaded with paperwork and signature requirements. Employing a centralized system gives the users automatic access to updated files. Two-factor authentication strengthens security measures and validates the identity of the person signing the document.
5. Real Estate
Real estate agents must complete paperwork quickly. In such a situation, meeting a 24-hour deadline while relying on paper signatures typically means a lot of bottleneck in the business. Clients can use electronic signatures to sign and send from home, thereby reducing the documentation cycle-time.
Constituents usually complain about slow government processes. However, digital signatures employing a secure, cloud-based solution can help employees collect necessary approvals faster and without compromising security. Therefore, it will provide speedier services to citizens.
Regions Actively Adopting E-Signatures:
There is growing awareness about Digital Signatures in Europe, and robust regulations are governing the usage of Digital Signatures.
- Europe has captured the second-largest share within the digital signature market. The digital signature market in European countries is predicted to be driven by rising demand for security and an improved customer experience.
- In 2019, North America possessed the biggest share within the electronic signature market due to the growing usage of e-signatures in the BFSI and healthcare sectors and supportive legislations within the U.S. and Canada.
- Asia-Pacific (APAC) is projected to observe the fastest market advance during the forecast period, because the adoption of machine learning (ML) and artificial intelligence (AI), the popularity of digital payments, the presence of SMEs, and IT expenditure are increasing.
The Preference Towards Cloud-Based Solutions:
Cloud-based solutions offer benefits like cost-effectiveness, easy deployment, security, and a central management facility across all endpoints. Hence, businesses are deploying these cloud-based digital signature solutions as they have lower capital investment and less implementation time.
Digital signature solutions and services based in the cloud offer exceptional security. Additionally, cloud-based solutions offer smoother management and better security features. These solutions utilize a cloud-based signing key to authenticate documents.
This eliminates the need for installing on-premises hardware. Since the user’s key is located on the cloud, the document signing process can be completed over the internet from anywhere.
Organizations should look for ways to reduce costs, improve workflow processes, and reduce waste. Therefore, using signatures is an economical and secure alternative to traditional contract signatures. Read this article that outlines Zycus’ 5 Tips for Effective Source-to-Contract during Crisis.
What does this mean for Procurement?
Make Procurement Safer!
Digital Signatures make your office paperless and protect confidential documents because they are all stored in an electronic format. Think of multiple authentication methods making the system safe and secure.
By authorizing the signer’s identity, digital signatures also safeguard you against forgery. Also, detailed audit logs ensure non-repudiation in a court of law.
Hence, there is a reason why the world is jumping on the digital signatures bandwagon.
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