The article “Sign on the Digitally Dotted Line” talks about the ever-increasing demand for and practicality of software for electronic authentication and e-signatures. The still-prevalent requirement of a physical signature on a physical page in important transactions is probably the last frontier that needs to be overcome before we can fully digitalize our business lives. However, while we as individuals can readily benefit from the convenience and security provided by such software, financial institutions may be facing a double-edged sword when it comes to e-signatures.
The article mentions that conservative financial institutions such as banks and securities markets are as usual being slow in the adoption of so-called “miracle solutions”. Nevertheless, there are undoubtedly major benefits in such software products, especially when they are adopted on a “first-mover” basis. For example, current market trends show unequivocally that in a competitive market, the business that offers the simplest, most hassle-free and least time-consuming method of completing a transaction will gain tremendous market share (as was the case of Amazon.com in online book sales a few years ago). For the financial institution that adopts software enabling said transactions, this would result in a competitive advantage that draws in more customers away from other businesses that still require written documents as proof of consent. Securities markets as a whole will also enjoy increased transaction volume from individuals who might have previously thought of the start-up process as too tedious. Finally, according to software providers such as ArticSoft and DocuSign, the possibility of fraud, identity theft and other security issues are minimized with the encryption and digital marking that accompanies e-signatures.
However, in my opinion there are some major downsides to all-out adoption of digital signatures, especially for securities markets and financial institutions. First and foremost, eliminating the need of physical interaction while signing a contract or completing a transaction could be paving the way towards the full automation of trading, possibly to a point where brokers and middle-men become obsolete. Another threat by such over-digitalization is that individuals might become more prone to making imprudent decisions due to their perceived lack of need for personal contact and consulting. “Rogue traders” seem more likely to emerge in front of a computer screen at home than on the phone with their brokers. Finally, there is the issue that in the initial stages of adoption, people might not take electronic signatures as seriously as they do physical ones – the article mentions that there have already been cases in which someone e-signed a document and simply did not do what the contract ordered them.
Whether or not this technology is coming is not the question – digital signatures have been growing in popularity ever since the Electronic Signature Act was passed in 2000. The issue at hand is whether we’re prepared to start eliminating personal contacts in business as we are eliminating physical paper.
Main Article: Sign on the Digitally Dotted Line
Author: McClure, Marji
Source: EContent; May 2008, Vol. 31 Issue 4, p40-44, 5p
Company/Entity: GARTNER Inc. DUNS Number: 097220180
ISSN: 15252531
Database: Academic Search Premier
(the article can be located by logging into Aladin and searching "Sign on the Digitally Dotted Line" in Academic Search Premier EBSCO)
Also cited:
http://www.articsoft.com/finance_security.htm
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5 comments:
I think you make a great point in saying that an e-signature is less meaningful than one where actual ink is involved. All too often do I find myself clicking "I Agree" at the bottom in a rush to get to the next step. If this same "I Agree" is taken to the next level where it replaces the traditional ink signature I think contracts will loose the meaning that they currently have and create problems for businesses and transactions in the future.
I agree with the idea that electronic signatures are much less personal. They definitely eliminate the need for a middle man. Although, I see how this is more cost efficient, I don't think society is ready to completely convert to digital signatures. I think having a middle man looking over your shoulder is sometimes helpful; especially in situations where you have questions. I don't think many people will take the time to email someone and wait for a response before signing a contract. I think people will sign on the line or click through in order to avoid the hassle. This summer, a large portion of my HR paperwork required a digital signature, and I did have a couple questions that I would have liked to gone over with an HR representative; however, I felt it was easier to just sign.
In today’s fast-paced environment, it is necessary to be able to as efficient as possible. Being able to sign on the “digital dotted line” makes much more sense than sorting through paper work. For efficiency purposes, the signature saves people time from having to go from page to page to initial and keep all the documents in order. It is compatible in today’s market since most parcel carriers require a signature when they deliver a package. It eliminates the paper trail that is involved and makes managing documents and storage more economical and effective. While there are drawbacks for integrity purposes, that should not be the only road block from continuing to press forward into new technology.
I see no harm in moving to solely digital signatures on long documents that require multiple signings. It would eliminate the chance of missing a signature and having to go back and get that person to sign in, thus saving lots of time. However, to move to only digital signatures, even for single page documents, would be something I would be opposed to. I'm not going to repeat the reasons you guys talked about, but another thing I would like to add is that there isn't a lot of fraud in digital signatures because they aren't used very much (considering the number of contracts signed). Maybe if they were more common people would try to develop software to copy signatures etc.
I also agree with your point that online signatures can potentially make it too easy to bind oneself to a contract. Companies know that to be successful, they need to provide an efficient, quick way for customers to get what they are looking for. Consumers, after all, are online in the first place in order to maximize their time. The technology behind e-signatures should evolve to a more universal technique so the consumer can get things done quickly while ensuring security.
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