Professional investment vehicles’ management teams are confronted with the need to sign different legal documents on at least a weekly (if not daily) basis. We know this administrative requirement ourselves and are also aware of all the different business models out there having to do the same. With this in mind we took the time to dive into the current state of digitization of signatures. Final destination: After our journey we ended up investing in one visionary company tackling this vertical.
Choosing the right travel companion
The opportunity costs of not going down the digital road with a service provider for eSignatures are becoming too high. A digitized signature process offers benefits on several levels:
- Helps save time and therefore money
- Improves user and customer experience
- Offers increased security and documentation
- Reduces administrative chaos through integrated archiving solutions
Current circumstances have led to additional extrinsic factors motivating market participants to digitize the process of closing deals, contracts, and other commitments in the most efficient way – remote and digitally – in almost any industry:
The COVID pandemic certainly tested the digitalization of companies’ business models. Some organizations found themselves in remote environments without personal contact. As a result companies had to find alternative ways to serve their stakeholders. Some industries have already been ahead of the “digital first” trend. Others had to catch up with lockdowns providing the perfect extrinsic pressure to do so.
Transferring passengers from physical to digital
Several providers offer the same service – talking “face to face” online. Given that transferring meetings from physical to digital was a relatively easy task. Choosing the right provider to sign digitally for closing contracts after successful Zoom or Teams sessions on the contrary is more complex. The aspect of legal compliance for different types or levels of eSignatures is for sure more specific. This is particularly true when signing across different nations.
Globalization blurs borders when it comes to the movement of goods and services, capital and labour. Therefore the need for common cross-border legislation for compliant digital signatures becomes more and more obvious. Unquestionably signing contracts is an essential part of economic interaction. One might imagine being forced to sign a B2B SaaS agreement in a foreign country via printing and scanning. So that means trading a digital product but not being able without engaging physically (with paper and ink). The reasons for this lie in potential compliance issues and uncertainty or not being able to verify oneself in the foreign country’s legislation.
EU framework as a trustworthy roadmap
That’s where eIDAS comes in – the EU regulation for electronic Identification, Authentication and Trust Services. The eIDAS regulation set up a framework as an answer to uncertainty about legal compliance of cross-border digital signatures within the EU. Most importantly, it regulates the process and need for “qualified electronic signatures”. That is the only type of eSignature that is truly on the same legal level as a physical, “wet” signature (ink on paper). Any qualified digital signature requires identification with a specific EU-listed “trust provider” through a KYC process. After identification and verification, most services then offer a 2FA process to sign documents in a fully legally compliant way quickly and efficiently.
Companies often want to keep the complete signature process within their chosen providers’ workflow. That offers a maximum of security but at the same time might lead to some inconveniences. The number of trust providers across the European Union is constantly rising. Imagine that a potential customer might already be verified for qualified electronic signatures by a trust provider in his EU member state. In that case he potentially has to run through the same hassle of verification again and again, just because the digital signature provider he used doesn’t have the integration to recognize his or her trust provider. This is not complicated. But most certainly it is annoying, time-consuming and cuts the positive efficiency effects of digital signatures.
Meet your tour guide through the signature jungle
This is where sproof comes into play. Given these points they recently announced Europe’s first centralised interface for digital signatures including qualified electronic signatures across Europe. This becomes possible by enabling the direct usage of existing identification from any valid listed trust provider.
Author: David Teufel