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eIDAS: The Catalyst for Making Digital Signatures Mainstream

The arrival of the European Union’s electronic Identification, Authentication, and trust Services 2.0 (eIDAS 2.0) regulation marks a pronounced shift in the fintech sector, enabling a new era of digitalized financial services.

Its impact on electronic signatures, identity verification, and regulatory compliance is profound, offering both challenges and immense opportunities. As the industry progresses towards a more digital future, understanding and adapting to the nuances of eIDAS 2.0 will become crucial to anyone wishing to stay at the forefront of the industry.

Electronic Signatures are a large and complex topic, so let’s start by defining the different types of signatures that will be discussed in this article.

The definition and differences between an Electronic and Digital Signature

An electronic signature is a digital representation of an individual’s intention to sign a document or agreement. The use of electronic signatures has become increasingly common in various industries due to its efficiency, convenience, and the ability to streamline document workflows. It’s important to note that while electronic signatures provide a digital alternative to traditional signatures, the level of security and legal recognition may vary depending on the type of electronic signature used as well as the applicable laws and regulations in each jurisdiction.

Then you have digital signatures, a specific type of electronic signature that employs cryptographic technology to create a digital certificate, offering proof of identity. Valid digital signatures offer an assurance that the document remains unaltered and originates from a distinct individual, thus strengthening the trustworthiness of electronic transactions.

Digital signatures are widely used for secure and authenticated communication, especially in situations where the authenticity and integrity of the signed document are critical. Furthermore, the involvement of a Certificate Authority (CA) enhances the trustworthiness of the digital signature by providing a reliable third-party verification of the signer’s identity.

“The future is bright for electronic signatures. They’re becoming cheaper, faster, and more secure. Efforts like eIDAS 2.0 will soon make electronic signatures the norm, echoing the successes seen in countries like Estonia which has seen electronic signature savings to be about 2% of their GDP! That is huge!”

Roni Oescher, CEO at Skribble

Different types of Digital Signatures

Further typologies of digital signatures provide an increase in security and assurance. “Advanced Electronic Signatures (AES) and Qualified Electronic Signatures (QES) are digital signatures, which are backed with cryptography and provide security assurance of varying levels,” states Arvid Vermote, CISO at GlobalSign, a leading provider of identity and security solutions. Advanced and Qualified signatures necessitate the ability to uniquely identify the signing party, ensuring a transparent link between the signature and the individual behind it.

The criteria for establishing this identity in an advanced signature are more lenient compared to a qualified one. In the case of a QES, every aspect related to the identification and the secure storage of identity information is tightly regulated. QES is the only standard recognized as a full replacement for a handwritten signature, even in cases where the law mandates a written form requirement.

Join the webinar: Building Trust with eIDAS 2.0 and Digital Signatures,
by GlobalSign 

However, “Qualified Electronic Signatures are far more than just digital renditions of traditional signatures,” states Roni Oeschger, CEO and co-founder at Skribble, a Swiss Electronic signature software provider. “They are sophisticated legal constructs comprising of a digital signature, an electronic identification (eID), and a supporting legal framework like eIDAS,” he adds. This intricate combination ensures both the authenticity and integrity of signed documents.

In contrast, Advanced Electronic Signatures (AES) offer a more streamlined approach to identification. For instance, Skribble in collaboration with GlobalSign provides a convenient option for businesses to promptly enable all their employees to use AES for signing without the need for extensive identification processes. This is made possible by leveraging the existing identification data the company maintains for its employees, in conjunction with their official email addresses.

The Future of Digital Signing

Digital signatures are at the forefront of the financial industry’s ongoing evolution, unlocking a world of innovation and authenticity. Their ability to streamline processes brings with it a host of benefits, including enhanced convenience, heightened security, and significant cost savings.

In finance, where speed and accuracy are essential, digital signatures enable individuals and businesses to sign contracts, agreements, and transactions remotely, reducing the need for in-person interactions and paper documentation. This not only improves the overall customer experience but also helps fintech companies and financial institutions accelerate onboarding, loan approvals, and other financial transactions, ultimately boosting their competitiveness and ensuring compliance with regulatory requirements.

“Advanced Electronic Signatures (AES) and Qualified Electronic Signatures (QES) are digital signatures, which are backed with cryptography and provide security assurance of varying levels,”

Arvid Vermote, CISO at GlobalSign

Game Changing Utility

The utility of digital signatures lies in their ability to solve several critical problems in the digital age. Firstly, they significantly streamline the process of signing and validating documents, eliminating the need for physical presence and paper-based processes. This shift not only accelerates the pace of transactions but also cuts down on costs and administrative burdens associated with paper documentation.

For users, digital signatures open new levels of convenience and efficiency. They can now execute legally binding agreements remotely, ensuring continuity in business operations regardless of geographical barriers. This technological advancement empowers users to conduct secure, efficient, and legally compliant transactions in a fully digital environment, something that was not feasible with traditional signing methods.

AATL and EUTL in the Trust Model

The trust model underpins the entire digital signature ecosystem, establishing the credibility and legal validity of digital signatures through identity verification, secure certificate storage, and trusted certificate authorities. In essence, it instills confidence in the legality and trustworthiness of digitally signed documents.

Two components in the Trust Model play an integral role. The AATL (Adobe Approved Trust List) and EUTL (European Union Trust List) each serve a distinct purpose in the realm of digital signatures and electronic documents.

Join the webinar: Building Trust with eIDAS 2.0 and Digital Signatures,
by GlobalSign 

AATL, curated by Adobe, features trusted digital certificates from approved CAs, creating a standardized trust framework for confident use of electronic documents and digital signatures in Adobe products.

EUTL, tailored to the EU, catalogs trusted CAs and certificates compliant with EU regulations, such as eIDAS. Its goal: standardized, secure digital signatures and trust services, promoting cross-border interoperability and legal recognition across EU states.

Understanding AATL and EUTL is crucial in establishing trust in digital signatures. Oeschger explains, “AATL helps verify the trustworthiness of electronically signed documents. However, it doesn’t reflect the eIDAS standards.” Vermote adds, “EUTL, on the other hand, is an eIDAS-centric list, playing a pivotal role in the EU and EEA, setting a model for other countries.”

Tremendous Opportunity for Growth

Despite its many benefits, the technology has not yet become the predominant way of signing in Europe. “The slow adoption is astonishing, since electronic signatures bring many advantages like being cheaper, faster and even more secure,” says Oeschger. He continues “With efforts like eIDAS 2.0, electronic signatures will soon become predominant.” Vermote elaborates, “eIDAS 2.0 introduces the European Digital Identity Wallet and expands the scope of qualified services requiring QES. There’s also a stronger emphasis on privacy, aligning with GDPR.”

With efforts like eIDAS 2.0 it is only a matter of time until every European citizen will have access to an eID that can be used to sign QES. Once this happens, electronic signatures will become the norm. Oeschger continues: “eIDAS is laying the foundation for legal electronic signatures across Europe, facilitating cross-border digital contracting, a game changer for international commerce.” The involvement of a Qualified Trust Service Provider like GlobalSign is crucial for issuing the qualified digital certificates required for QES, indicating compliance with legal standards and regulations.

Join the webinar: Building Trust with eIDAS 2.0 and Digital Signatures,
by GlobalSign 

The ongoing trajectory for electronic signatures and digital identities is set for expansion observes Vermote. “There’s a growing need for systems that transcend geographical and regulatory boundaries, offering interoperable solutions.” For global enterprises, navigating the complex web of international regulations poses a significant challenge. “Different countries have varying regulations and quality standards. It requires intricate knowledge to understand which signature type to use and ensure its legal validity across regions,” Vermote points out.

“The future is bright for electronic signatures. They’re becoming cheaper, faster, and more secure. Efforts like eIDAS 2.0 will soon make electronic signatures the norm, echoing the successes seen in countries like Estonia which has seen electronic signature savings to be about 2% of their GDP! That is huge!” Oeschger concludes.

NFM Publishing Team
NFM Publishing Team
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