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January 18, 2017

E-Signature Adoption Takes Big Step Forward With New California Law

Electronic signatures (e-signatures) have been around for a couple of decades, but significant barriers are just now being torn down in many industries and regions of the country. Most recently, a monumental barrier in the state of California was overtaken, thanks in large part to a bill signed by Governor Jerry Brown.

New California Law is a Positive Signal

The use of e-signatures isn’t something new. Federal statutes have existed in the U.S. since the turn of the century and trillions of dollars worth of digital transactions have relied upon e-signatures in some form or fashion. But for some reason, convoluted politics and slow processes have put a bureaucratic weight upon the issue in many areas of the country.

So, when Governor Brown recently signed California Assembly Bill 2296 into action, there was reason to celebrate. His signature on the bill simplifies much of the confusing rules surrounding the statutes on how government entities accept signatures on documents electronically – which includes both electronic and digital signatures.

“While the two terms are often interchangeable, each term carries a distinct set of defining features and functions,” explains Rahim Kaba of eSignLive, a leading provider of e-signature solutions. “The broader category of e-signatures – first and foremost a legal concept – often includes digital signatures, which is a specific type of technology used to implement electronic signatures and ensure a secure and trusted transaction.”

California Assembly Bill 2296 aims to clarify the many confusing and misleading aspects of legislation that were passed by lawmakers in 1995, as well as the 1999 Uniform Electronic Transactions Act (UETA) that was originally designed to outline the validity of e-signatures so that both private and public sectors could utilize them more efficiently. And it appears that the final divisive roadblocks between mass adoption and acceptance of electronic signatures are here.

“California is now poised to broadly accept e-signatures and move to paperless processes across the state,” Kaba points out. “The state’s commitment to clarifying the laws around electronic records and signatures is timely, as governments and businesses race to ditch paper and digitize transactional processes.”

The Why Behind e-Signatures

Why do e-signatures matter? It may seem strange to outsiders that the Governor of California would get directly involved in something as seemingly minor as how documents are signed, but this is no trivial issue. Here are a few specific reasons why they matter:

  • Security. One of the initial complaints surrounding e-signatures was the belief that they weren’t as secure or enforceable as standard pen and paper. This is actually a misconception, though. When a signature is performed digitally, there’s ample information provided about who accessed and signed the document. Signatures are also encrypted, which makes online storage more secure.
  • Efficiency. Consider for a moment how inefficient standard approval processes are. Getting multiple signatures on the same document often requires emailing, printing, scanning, faxing, and a long list of other tasks. But with e-signatures, everything happens quickly and securely over the Internet.
  • Standardization. Whether it’s government institutions or private businesses, having standardized processes in place greatly enhances output and removes unnecessary points of friction. e-Signatures are a step in the right direction.

As you can see, the adoption of e-signatures is something that matters both to the private and public sectors. Governor Brown got involved in this issue because it holds far-reaching consequences for the future of business, commerce, and contractual integrity.

What Does the Future Hold?

“Digital signatures will someday give us the ability to routinely transact official business between government and the public over computer network,” digital tech expert Todd Sander predicted all the way back in the fall of 1999. “Unfortunately, the political, legal and technical infrastructure necessary to support widespread implementation of such an open public-key infrastructure (PKI) seems to be several years away.”

Sander would have no way of knowing just how true his words would ring and how long it would take to actually make some progress in this area. While digital signatures have been used for many years, the newly approved California bill is just another sign that widespread adoption and acceptance are imminent. 

From a purely business IT perspective, it’ll be interesting to watch how things continue to unfold. Much of the onus will fall upon organizations as they’re encouraged to adopt the right software and establish secure environments for digital signatures to thrive. Because e-signatures aren’t new, and most businesses already have some familiarity with this technology, the learning curve shouldn’t be very steep.

While California’s new law may not directly impact very many organizations or individuals right now, the fact that the Governor of California made it a priority to eliminate barriers to digital signature adoption and implementation is a positive sign for the industry as a whole. 




Edited by Alicia Young
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