An e-signature, aka electronic signature, is a legal and valid way of signing and authenticating electronic documents such as annual reports, employment contracts, lease agreements, etc.

Just like its handwritten counterpart, an e-signature binds the signer to the content of the signed documents.

Types of electronic signatures
Creating an e-signature with Penneo
What are the benefits of electronic signatures?
Electronic signatures use cases
Choosing the best e-signing software


Types of electronic signatures

Based on their level of security, the eIDAS regulation defines three types of e-signatures:


1. Standard electronic signatures

A standard electronic signature is the least secure type of e-signature since it doesn’t require signer authentication.

Examples of standard e-signatures are:

  • adding a picture of your signature to a document
  • drawing or typing your signature via an online signature maker that doesn’t require a user account or any other authentication method

In most cases, standard e-signatures are not admissible in court since they can’t verify the identity of the signer nor the integrity of the signed document.

Someone can simply type their initials on an electronic contract and then deny having signed it. Without any authentication, there is no way to prove that the person is the actual signer of the document. Therefore, the signature is not valid.


2. Advanced electronic signatures (AES)

Advanced electronic signatures, aka digital signatures, are a much more secure type of e-signatures.

According to eIDAS, an advanced electronic signature must be:

  • uniquely linked to the signer
  • capable of identifying the signer
  • connected to the signed documents so that any subsequent changes can be detected
  • created using electronic signature creation data that is under the sole control of the signer

In most cases, advanced electronic signatures are admissible in court since they authenticate the signer and ensure the integrity of the signed document.

Most digital signing solutions rely on public-key encryption and hashing algorithms to create advanced electronic signatures.

A signer can create advanced electronic signatures using their national eID.

The digital signing solution uses a hashing algorithm to generate a unique hash value representing the document at the time of signing.

Next, the signer uses their eID to encrypt the hash value. The advanced electronic signature is the encrypted hash.

To validate the signature, the recipient runs the document through the same hashing algorithm. This outputs the hash value of the data after being signed.

They also use the public key of the signer to decrypt the signature. This outputs the hash value of the document at the time of signing.

The signer needs to compare the two hash values. If the hashes are identical, the document has not been tampered with after signing.

An advanced electronic signature is valid when the signer’s public key can decrypt it and the two hash values match.

Digitally signing with an eID ensures:

• Signer authentication

A national eID is unique to its owner and can be used to prove a person’s identity.

Data encrypted with a person’s eID can only be decrypted using that eID’s corresponding public key.

• Content integrity

Digital signing solutions use hashing algorithms to create a unique hash value for each document.

Any subsequent change in a signed document will generate a different hash value at the time of validation.

• Non-repudiation

The signer is the only one who has access to their eID, so they can’t deny having signed the document.

A digital signature can’t be repudiated when the signer signs via eID and the content of the document is intact.

Besides eIDs, you can also use the following methods to create digital signatures:

  • two-factor authentication
  • creating and logging in to a verified user account


3. Qualified electronic signatures (QES)

Qualified electronic signatures are the most secure type of e-signatures.

eIDAS defines qualified electronic signatures are advanced electronic signatures that are:

Under eIDAS, qualified electronic signatures have the same legal effect as a handwritten signatures.


Creating an e-signature with Penneo

E-signing one or several documents with Penneo is secure, fast, and simple. Watch how it works.


What are the benefits of electronic signatures?

E-signatures make life easier for businesses and their customers. Some of the main benefits of electronic signatures are:

• Productivity: When it comes to contract signing, employees spend a lot of valuable time on manual tasks. E-signatures help automate manual processes and save time.

• Cost savings: By digitizing signing processes, companies can reduce the costs associated with paper, printers, scanners, and postage.

• Customer experience: E-signatures eliminate the hassle of printing and mailing documents. Customers can sign documents electronically no matter where they are or what device they use.


Electronic signature use cases

Nowadays, e-signatures help numerous businesses streamline their processes and increase efficiency. Examples of documents that can be signed using e-signatures are:

  • Employment contracts
  • Audit reports
  • Annual reports
  • Meeting minutes
  • Engagement letters
  • Insurance contracts
  • Loan agreements
  • Sales contracts
  • Rental agreements
  • Letters of representation
  • Deeds
  • Diversity policies
  • Tax policies
  • Stakeholder policies
  • KYC forms
  • Car lease agreements


Choosing the best e-signing software

Here are three tips for choosing the best e-signing solution for your business.

  1. Choose an e-signing software that offers either advanced or qualified electronic signatures.
  2. Invest in software that uses automation rules to reduce manual work and speed up signing processes.
  3. Find an e-signing solution that handles sensitive data in a GDPR-compliant way.

If you’re in the market for a secure digital signing solution, why not explore Penneo with a 21-day free trial?