What Is A Digital Signature and How Does It Work?

It wasn’t all that long ago that “signing on the dotted line” meant wet ink on dry paper. However, in the digital age, paper-based contracts and other legal documents no longer provide the necessary efficiency and security for organisations to conduct business, close sales and onboard customers at the speed required to remain competitive. Digital signatures, on the other hand, provide efficiency gains at every step of the legal document process – from remote approvals to Know Your Customer (KYC), distribution, storage, security and retrieval.


Cut Out Inefficiencies with Digital Signature Solutions

“Inefficiency” and “paper agreements” are two terms that go hand in hand. Why? Because, first, paper-based documents either have to be sent by post or by courier for signature, or one of the two (or more) parties will have to travel to see that they are signed in person. This process causes delays – the last thing a business wants when a customer is about to sign a contract. More delays can then materialise if there’s a mistake on the document or adjustments need to be made. The document then has to be edited, re-printed and re-checked, all before it’s re-sent for ratification. The business then has to file the documents away in physical cabinets or archives, which are neither secure nor practical in terms of retrieval – you can’t keyword search a paper document on your computer. And then, of course, there’s the risk of fire, flood, and other dangers that could see the documents destroyed.

All of these inefficiencies come with costs – time costs, opportunity costs, and monetary costs – which is why more and more organisations around the globe are turning to digital signature solutions.


Rapid Growth in Digital Signature Market

Digital signature solutions enable organisations – both commercial and governmental – to incorporate simple and secure electronic signatures into their contractual documents. They offer a whole host of benefits – including increased efficiency, reduced turnover time, lower costs and enhanced security – when compared to the pen-and-paper processes of old. They also ensure enhanced data integrity, scalability, and customer satisfaction – all of which is propelling digital signature market growth.

According to the latest figures from Research and Markets, the global digital signature market is expected to reach USD 3.4 billion by 2023. A separate study from Markets and Markets puts the figure even higher. It finds that the global digital signature market is expected to grow from USD 1.2 billion in 2018 to USD 5.5 billion by 2023, with a CAGR of 36.7% during the forecast period. The report cites rising investments in electronic documents by governments and enterprises, and improved security with a controlled and seamless workflow as key drivers of the expected growth.

The need to curb fraudulent activities in the banking, financial services and insurance (BFSI) sector is also a key growth driver of the digital signature market, according to the Research and Markets report.

“The increasing acceptance of biometric components based on this technology in the BFSI sector is bolstering the growth of digital signature market. Use of this technology in biometric systems is one of the most secure methods for the identification and authentication procedures, due to its unique characteristics of the user’s signature. Moreover, advancement in encryption-based security eliminates possibility of duplication. These innovative and advanced applications of the signatures based on this technology in BFSI sector are driving the growth of the digital signature market.”


Digital Signature Solutions from TOC Biometrics

Digital Signature from TOC Biometrics is an innovative new cloud-based service that can be integrated into an organisation’s existing systems quickly and easily. Our Digital Signature tools utilise advanced facial biometrics and public key infrastructure (PKI) technology to bring together the document to be signed, and the personal authentication information required to ensure approval and acceptance of the relevant commercial and legal terms.

Like handwritten signatures, digital signatures are unique to each signer – though are inherently more secure, and designed specifically to solve the problem of tampering and impersonation in digital transactions. Using PKI, two keys are generated for each digital signature transaction – a private key and a public key. These keys are mathematically linked. The individual who is creating the digital signature uses their own private key to encrypt signature-related data – and it’s this encrypted data itself that forms the digital signature. The only way to decrypt that data is with the signer’s public key. If the public key can’t decrypt the digital signature, the signature is considered invalid.

If both keys match, however, then a secure transaction is authorised. The documents are digitally signed, and a cryptographic stamp certificate is issued. The signer stamps the document digitally with the certificate, and the individual’s data – along with a photograph of the individual’s face for biometric authentication – are captured on the document. In addition, TOC Biometrics generates a log for each digital signature, which identifies the signer, the integrator, and the timestamp associated with the digital certificate. This allows administrators to know with absolute certainty the precise time and date of the signature, and also enables traceability.

(Video source: youtube.com)


With over 8 years’ experience, more than 5 million identity verification and digital transactions per month, and an accuracy rate greater than 99%, TOC Biometrics is a leading provider of Digital Signature and biometric authentication solutions. Discover what our Digital Signature tools can do for your business, road-test our API, and explore our system’s capabilities with our live demo apps by registering for an account today. Get in touch to find out more.