Difference Between Electronic and Digital Signature

The difference between an electronic signature and a digital signature is subtle to anyone who is sending or signing a document. However, they’re not so subtle to auditors, compliance officers, judges and regulators. An e signature is a generic term for any signature transmitted electronically–whether it’s a digitally-written signature on a document or a signature generated through an electronic document signing service such as DocuSign. Digital signatures are a kind of electronic signature with advanced features that keep them compliant and secure.

What Is an Electronic Signature?

An electronic signature is a digital representation of a person’s intent to sign or authenticate a document, contract, or communication electronically. It serves as the electronic equivalent of a handwritten signature on a physical document.

Electronic signatures are used to indicate the signer’s agreement, approval, or consent to the content of the document. They provide a convenient and secure way to conduct business transactions, sign legal documents, and exchange information in digital form.

An electronic signature is usually created using digital technology and can take various forms, such as a scanned image of a handwritten signature, a typed name, a unique code, a biometric feature (like a fingerprint), or even a simple click of a “Sign” button on a computer or mobile device.

To ensure the authenticity of the signature and the signer’s identity, electronic signatures often employ various security measures, such as encryption and digital certificates. These measures help verify that the signature belongs to the intended signer and that the signed content has not been tampered with.

The legal validity of electronic signatures varies by jurisdiction. Many countries have enacted laws and regulations to recognize the legal enforceability of electronic signatures as long as they meet certain criteria. These criteria include proving the identity of the signer, demonstrating their intention to sign, and maintaining the integrity of the signed document.

Different Types of Electronic Signatures

• Simple Electronic Signatures: These are basic forms of electronic signatures, such as a scanned image of a handwritten signature or a typed name. They provide a level of authentication but may not be as secure as more advanced methods.
• Advanced Electronic Signatures (AES): These are more secure and reliable forms of electronic signatures. They often require the use of unique authentication factors, such as a PIN or a one-time password, and can provide a higher level of assurance regarding the signer’s identity.
• Qualified Electronic Signatures (QES): This is the highest level of electronic signature and is based on a qualified digital certificate issued by a certified authority. QES is considered equivalent to a handwritten signature in many legal contexts.

What is a digital signature?

A digital signature is a cryptographic technique used to ensure the authenticity, integrity, and non-repudiation of digital documents, messages, or transactions. It goes beyond the concept of an electronic signature by providing a higher level of security and assurance. A digital signature is based on public key cryptography and involves the use of digital certificates to verify the identity of the signer.

Key components and processes involved in a digital signature

Public Key Cryptography (Asymmetric Cryptography)

Digital signatures rely on asymmetric cryptography, which involves a pair of cryptographic keys: a public key and a private key. The private key is kept secret by the signer and is used to generate the digital signature. The public key is shared openly and is used to verify the digital signature.

Digital Certificate

A digital certificate is a secure digital document issued by a trusted Certificate Authority (CA) that binds a public key to the identity of the certificate holder (signer). The certificate provides assurance that the public key belongs to the claimed signer and hasn’t been tampered with.

Digital certificates include information about the owner, the public key, the CA’s digital signature, and the certificate’s validity period.

Signing Process

To create a digital signature, the signer’s private key is used to generate a unique mathematical value based on the content of the document being signed. This mathematical value, also known as the hash or digest, is then encrypted using the private key to create the digital signature. The digital signature is attached to the document, along with the signer’s public key and digital certificate.

Verification Process

When someone receives a digitally signed document, they can use the signer’s public key, which is embedded in the digital certificate, to decrypt and verify the digital signature. The recipient calculates the hash of the received document and then decrypts the digital signature using the signer’s public key. If the calculated hash matches the decrypted hash from the digital signature, and the digital certificate is valid, the signature is considered authentic and the document is deemed unaltered.

Non-Repudiation

A key aspect of digital signatures is non-repudiation, which means that the signer cannot deny having signed the document. Because the digital signature is unique to the signer’s private key, the signer cannot later claim that they didn’t sign the document, as the verification process confirms their identity.

In many regions, including parts of North America, the European Union, and APAC, digital signatures are considered legally binding and hold the same value as traditional document signatures.

Other than digital document signing, they are also used for secure email communication, digital contracts, legal documents, financial transactions, and software distribution; and areas where the authenticity and integrity of digital communications are crucial.

Electronic Signature vs Digital Signature: Key Differences

Description

• An electronic signature is simply known to be a digitized form of an inked signature for indicating consent or approval in an electronic form.
• A digital signature is a specific type of electronic signature that uses cryptographic techniques to provide higher security and authentication.

Authentication

• Electronic Signature provides a basic level of authentication and is often based on simple verification methods like a scanned image of a handwritten signature.
• Digital Signature offers a higher level of authentication and security due to the use of cryptographic algorithms that link the signature to the signer’s identity and the content of the document.

Security

• Electronic Signature is generally less secure than digital signatures as they may rely on easily forgeable elements.
• Digital Signature utilizes encryption and hash functions to ensure the integrity, authenticity, and non-repudiation of the signed document.

Legal Validity

• Electronic Signature is legally valid in many jurisdictions, but the level of validity may vary.
• Digital Signature carries a higher level of legal validity due to its enhanced security features.

Technology Used

• Electronic Signature can be created using various technologies, including typed names, scanned signatures, or even a simple click on an “I Agree” button.
• Digital Signature relies on asymmetric encryption and hashing algorithms to create a unique cryptographic signature.

Encryption

• Electronic Signature may or may not involve encryption of the document.
• Digital Signature involves encryption to create a secure link between the signature and the document content.

Verification Process

• Electronic Signature verification process may vary and can be as simple as visual comparison.
• Digital Signature verification involves complex cryptographic processes to ensure the authenticity and integrity of the signed document.

Non-Repudiation

• Electronic Signature offers limited non-repudiation, as it may be easier for signers to deny their involvement.
• Digital Signature provides strong non-repudiation since the cryptographic mechanisms ensure that the signer cannot deny their involvement.

Storage and Retrieval

• Electronic Signature can be relatively easier to store and retrieve due to their simpler nature.
• Digital Signature requires a more careful approach to storage and retrieval due to the complex cryptographic keys involved.

Cost and Complexity

• Electronic Signature generally simpler and less expensive to implement.
• Digital Signature more complex to implement due to the cryptographic infrastructure, and it may involve higher costs.

Use Cases

• Electronic Signature is suitable for less critical documents and scenarios where security and legal implications are not the primary concern.
• Digital Signature is preferred for important contracts, legal documents, financial transactions, and situations where high security and legal validity are required.

Compliance and Regulations

• Electronic Signature compliance requirements may be less stringent than those for digital signatures.
• Digital Signature is subject to more stringent regulations, especially in sectors where security and authenticity are paramount.

Electronic Signature vs Digital Signature: Key Takeaways

Benefits of Digital Signatures

• High level of security and assurance compared to electronic signatures.
• Enhanced protection against tampering and forgery.
• Non-repudiation ensures accountability and prevents denial of signatures.
• Trusted third-party Certificate Authorities provide verification of identities.

Benefits of Electronics Signatures

• Time and cost savings by eliminating the need for physical presence or paper-based processes
• Faster document processing and turnaround times
• Enhanced security through encryption and authentication measures
• Improved audit trails and recordkeeping.