The digital revolution has increased the pace of business forever. A global website and social media presence enable any business to effectively be global from birth.
This obviously has advantages and disadvantages. One of the key benefits is being able to access international opportunities quickly. At the same time, businesses often find it challenging to scale up quickly enough, causing significant “growing pains”. Furthermore, issues such as language barriers, different legal and regulatory systems and local business customs can all challenge businesses to take advantage of international opportunities.
New opportunities from digital
Without a doubt, digital platforms and services exponentially change business, rewriting entire industries and displacing market leaders faster than ever before. One of the first industries to recognise this was the music industry’s battle against piracy in the early 2000s. Since then just about every industry and business has been impacted by digital, with several industries being completely disrupted. Those that have not been so far, will be in the future; such is the impact on productivity of well-designed and executed digital platforms and applications. Businesses that understand we have perhaps only seen 10 per cent of the impact that digital will deliver are best placed to win in new and existing markets.
e-signature: a new way to interact
Paper-based interactions are being replaced by digital in every area of life and business.
You would perhaps expect the last bastion of paper to be contracts. How can digital replicate the physical act of signing a contract? In fact, businesses across the world are using e-signature platforms to reduce bureaucracy, reduce time to market and deliver a more intuitive and effective way of formalising relationships between businesses and people.
The primary benefit of e-signature contracts is speed of delivery. Contracts are often created as a result of a long series of negotiations. Once all parties are content that an agreement has been reached, it is in everyone’s interests to get the contract signed as quickly as possible. Waiting days for contracts to be manually typed and posted for signature may have been acceptable in the pre-digital era but when most negotiations take place via Skype, email or even WhatsApp, it makes sense to base contracts in the digital world too.
Speed of creation and sharing also enables all parties to quickly and effectively review documentation. In the past, by the time a contract was prepared and shared, parties may well have forgotten salient points. e-signature contracts remove this risk, enabling faster and more accurate representation of what has been agreed. e-signature based contracts are also quicker and simpler to review. Parties can simply search for relevant terms within the contract to double check validity and accuracy. This saves further time.
One of the issues with traditional paper contracts was storage. Contracts could easily be mislaid. In the event of a significant event (such as a fire or flood) contracts might be lost forever, causing significant administrative issues for the parties involved. In the case of e-signature contracts, businesses can save copies on cloud-based storage with multiple backup and recovery.
Finally, in an era where businesses are being encouraged to consider the impact of their activities in the environment, e-signature contracts offer a greener, more carbon neutral approach to management of contracts. Combined these benefits deliver a faster, simpler, more transparent, less risky and greener approach to the management of contracts.
A matter of law
The validity of e-signatures is beyond debate. e-signatures have been legally binding in the US for almost 20 years. The European Union (EU) created EU-wide regulation for e-signatures under the eIDAS regulation in 2014, consolidating individual country laws from across the EU that dated back to the early 2000s. In fact, almost every country in the world now recognises the validity of e-signatures, including many of the fastest growing economies in the world.
Relevant markets for e-signature
Clearly e-signature agreements are highly relevant for businesses looking to grow internationally, since they turbo charge the process of getting business done and enable businesses to quickly and effectively formalise the results of business discussions. However, e-signatures are also relevant to many other industries.
e-signature contracts are particularly helpful in the financial services sector, not least because people often want banking, financial services or insurance products to begin as soon as possible. e-signatures enable immediate confirmation that a contract has been signed. Increasingly real estate agents are also turning to e-signatures to enable both renters and purchasers of property to manage contracts more efficiently and effectively.
Many businesses now manage standard employment contracts electronically, enabling staff to review contracts and sign quickly. Days spent waiting for a contract to arrive through the post are coming to an end.
How to choose an e-signature partner
There are several considerations when choosing an e-signature partner. These include whether the provider has a process for approvals where more than one signature is required. This can significantly reduce administration and increase approvals speed. Additionally, companies should consider the benefits of being able to sign contracts on any device including mobile devices and tablets.
Strong authentication for each customer signature, timestamped proof of signature and secure and safe storage of all documentation are prerequisites for e-signature providers. In the EU there is stringent regulation about third parties that offer e-signature services and companies need to know the provider complies with these.
A final consideration for businesses may be where contracts are stored electronically. The US Patriot Act provides widespread powers to the US government to access information stored on US-based servers. Many non-US companies are concerned about the potential compromise of their data and may prefer to consider a company based outside of the US.
As international trade makes up a bigger opportunity for business around the globe, e-signature contracts are the glue that enables businesses to develop quickly and effectively. E-signatures provide a fast, simple and effective means to formalise business agreements across the globe. Companies benefit from the ability to create and review contracts faster and with more accuracy, enabling business to take place anywhere in the world and be formalised on any device.
Luc Pallavidino, CEO & co-founder, Yousign