A signature of the times

CHANGE: Some organisations still insist on original signed hard copies. But given the time-saving benefits of electronic signatures, more and more organisations can be expected to make the switch. Picture: Shutterstock.com
CHANGE: Some organisations still insist on original signed hard copies. But given the time-saving benefits of electronic signatures, more and more organisations can be expected to make the switch. Picture: Shutterstock.com

I was asked recently to sign a document electronically or sign and email back a scanned copy of the document. I wonder how this works in terms of legalities and security. Is this where things are headed, and if so, what can you tell me to put my mind at ease that these systems are legitimate?

Believe it or not, laws have been in place for some time to allow more modern ways of authorising documents, but it has taken us a while to catch up with what is legally acceptable. This is partly due to resistance to change from businesses and consumers, however as momentum continues to build we will only see more change in this area.

The most sophisticated electronic signatures essentially use complex encryption to allow only the recipient to “sign” a document.

Exactly how this is done varies depending on the software used, but often involves creating a secure version of your signature by either uploading an image or creating a digital signature from a specific font. This is the approach taken by DocuSign, which is one of the market leaders servicing some of Australia’s largest companies including a number of the big banks.

A more common form of electronic signature that most people have seen is the portable terminal used by a parcel courier. While this system sees the recipient “signing” on the screen using a stylus, with no paper document ever existing, it still requires someone to make out the shape of the original signature so isn’t a great leap from what most people are used to already.

If both of the above approaches seem foreign to you, you may be more comfortable with the most basic version of an electronic signature, which simply involves signing a paper document in the traditional way before emailing it through in electronic (i.e. scanned) form. 

While all of the above methods are typically viewed as being legally acceptable, it can still be difficult to prove the intended recipient was the one who actually signed the document.

Due to this uncertainty, some organisations still insist on original signed hard copies. However, with the time-saving benefits of electronic signatures, we can expect even more organisations to make the change in the future.

For more on electronic signatures and how they can be introduced in your business, email your Crowe Horwath adviser at albury@crowehorwath.com.au

It has taken us a while to catch up with what is legally acceptable.