Digital signature + Blockchain | Our answer to your digital journey | Article – HSBC VisionGo

When does it feel right to implement digital signatures? How can blockchain improve the current digital signature solution?
Technology  ·    ·  4 mins read

The market size of digital signature is projected to reach US$ 14.8 billion by 2026 with an average growth rate of 31%. The Covid 19 has accelerated the world’s adoption of digital signature and the trend will continue in the post-Covid world. The US is leading in the practice of digital signature but other countries and regions are rapidly following suit.

A digital signature can be implemented at speed with great flexibility. Investment is limited but the gain is great. In the Covid-19 hit world, remote work has become part of life; travel restrictions only compounded the problem. The digital signature solution can reduce completely the dependence on paperwork. It is an integrated infrastructure to adapt to the new normal in work-life.

The solution is simple, yet no time is more suitable than now to implement it.

We understand that you may already use digital signatures or use a work-around to achieve the same goal. And you probably come across some easy and smart signature solutions. Doing it once or twice is ok, but you cannot rely on these systems for heavier workloads.

Some solutions are as simple as a drawing pad with no encryption or authentication. Some solutions cannot detect whether a signature is signed by the correct personnel. Some solutions just help users to cut and paste a picture of their signature and call it the day. These are convenient ways people do digital signatures, but should not be recommended when dealing with important documents, especially legally binding documents.

What can be achieved when using digital signatures?

Covid-19 has taught us a lesson of having a digital alternative of doing and keeping things is important for resilient businesses. With the help of digital signature, countless firms have already benefited. AstraZeneca, a vaccine producer adopts a digital signature solution and reported a vast gain of efficiencies. 85% of its agreements now take less than one day to finish. LinkedIn, by adopting digital signature solutions, gets 80% time saved in invoicing and thus improves its credit cycle. Unilever, a conglomerate, reduces 50% contract completion time. Implementing a simple technology such as a digital signature, can boost the efficiency of the company as a whole, boost sales, save costs and improve working capital in unimagined ways.

When does it feel right to use a digital signature?

When you are dealing with clients who want quick delivery, or you have nightmares that some important documents may be lost in the way.

Or you had a bad experience of many rounds of revisions, eventually, after countless emails, the signature is signed on the wrong version.

Or you just want to run your company anywhere you want but find yourself from time to time finding a pen, paper, and scanner to complete the final step.

Start small, achieve marvel, A digital signature is intuitively the next best thing you can do.

Now, the mainstream solution provider uses a cloud-based central management platform, which is great and efficient but also means that you have to rely on a third party to handle your sensitive documents. And it also means that all your signing parties have to use the same platform to get things done. And what if anything goes wrong, will the platform be held responsible? Can the platform provide you with digital records to serve evidence? Many of the centrally managed cloud platforms that brag about their digital signature solution cannot even encrypt your signature, let alone your agreements properly.

Who will in the end pay the price if this system is compromised and a serious data leak happens?

Already hackers are creating phishing emails using logos and templates of Docusign to trick signatures from innocent people. And other embarrassing security breaches of PDF documents pose potential threats in today’s E-Signature business.

It is necessary to apply the highest security standards when handling important documents, especially signatures. Thinking about a trustworthy infrastructure, a blockchain is that ideal candidate.

Blockchain implements an irreversible timeline of data, each block is time-stamped when added to the blockchain, each new information is chained onto the previous block and the blockchain is stored. Blockchain’s security is guarded by two designs:

1) cryptographic fingerprint unique to each block, called hash, altering the block will generate a new hash; what is recorded cannot be changed.

2) consensus protocol, all nodes in the blockchain have to agree to a shared history.

Suppose you are using a blockchain-based digital signature solution with your counterparties. The design of blockchain will allow you to have four unique additional features from a centralized digital signature solution.

How could blockchain significantly improve the security level and user experience?

1) All documents uploaded to the blockchain cannot be altered, so no information can be wronged. It is impossible to revise the documents after it has been signed or do any backward adjustments. In other words, blockchain “sealed” your agreement and serves as a transparent locker. Every party can see what is inside but no one can alter it.

2) Documents and signatures are stored, not on a central server, but on the decentralized nodes. For centralized databases that grant authority to users in a yes/no fashion, the decision must be 100% correct or the database may be compromised. Instead of a single point of weakness in a centralized platform, only when 51% of the nodes are hacked at the same time, will the documents be corrupted.

3) Every document on the blockchain is the “one true original copy”. You will not have party A referring to his version on his cloud account and party B referring to another version on another cloud account miscommunicating with each other. You will not have the headache of choosing which version or cloud environment should I sign, this complication has been solved once for good.

4) Every party that participates in the blockchain is equal. It is not a myth that if you use a centralized cloud platform, it would be better to be the initiator rather than the signer. Ownership of documents matters if you are running on a centralized platform. There is inequality among the signing parties. If you are a document receiver or a signer, you can only claim ownership of your document after you download that PDF document. And if you don’t do so, you put yourself at a big disadvantage. However, in blockchain, you will never need to worry about losing your document, it is always there, stored in blockchain.

5) Full timeline tracking of the signing process. The natural advantage of blockchain is that all data is recorded in time order. There will not be confusion over which agreement is the latest one. And for any document on the blockchain, all changes are recorded within a timeline. Full traceability of your document is ensured.

6) Admissible evidence. Already, the court in China has allowed legal evidence to be submitted to the court through blockchain. This is a recognition of the trustworthiness of blockchain technology. It is foreseeable that in the future, the blockchain stored documents will be better recognized in court. And with court exploring blockchain technology, it is possible that a blockchain-based digital signature solution can have better interoperability with other blockchain platforms, together to form a trusted ecosystem.

We have already developed great blockchain products solving problems in the supply chain. But it is just part of the equation for a truly digital-proof company. We believe through the digital signature module, we have found the other half of the equation. And it is Awesome.

D-Engraver
D-Engraver