What is Digital Signature?

  • December 2, 2021
  • Reading Time: 4 minutes
Reading Time: 4 minutes

The digital transformation era is here, which heavily promotes the ease of use, convenience, and the opportunity to eliminate manual errors and efforts. Organizations of the 21st century are not only adaptive to continuous changes like technological advancements, changing regulations, new consumer trends, etc., but they also understand the value of digitizing the business processes.
In today’s age of digital-led technology, digital signature is one such name that has become a hot topic across various public and private organizations.
Before diving deep into the topic, let’s understand the basic terms associated with the digital signature.

What is Digital Signature?

Digital signature is a type of electronic signature that verifies the authenticity and integrity of digital messages and documents using encryption and decryption.
Digital signature provides the following three features:

Authentication – Digital signature is electronic verification of the sender of the digital message. Because the ownership of a digital signature key is tied to a single person, a verified signature determines that the user transmitted the message.

Integrity – Digital signature with the use of cryptographic message digest functions assures that the message does not tamper during the transit.

Non-repudiation – Digital signatures guarantee that the sender who signed the document cannot deny the responsibility of sending the message. If any such denial occurs in the future, the receiver can use the digital signature to prove the origin of the message.

How does a Digital Signature work?

Digital signatures are generated using public-key cryptography. A pair of cryptographic keys, a public and a private key is included in each digital signature transaction. The person who creates the digital signature uses a private key to encrypt signature-related data, which can only be decrypted using the signer’s public key.

Is Digital Signature legally binding?

Digital signatures are equivalent to traditional document signatures in terms of value and are significantly more secure than any other type of electronic signature.Digital signatures are valid and accepted in most countries. In the United States, digital signatures are protected by the Uniform Electronic Transactions Act (UETA) of 1999 and the Signatures in Global and National Commerce Act (ESIGN Act) of 2000. In the European Union, it is governed by the eIDAS (electronic Identification Authentication and trust services).It is legally recognized in India under the Information Technology Act of 2000. Under the same act, the Controller of Certifying Authorities (CCA) grants Certifying Authorities (CAs) permission to issue Digital Signature Certificates (DSC).

What is Digital Signature Certificate?

A Digital Signature Certificate is a secure digital key that verifies and confirms the certificate holder’s identity. Trusted certifying authority typically issues digital certificates that are valid for a set amount of time. The certificate authority serves as the process’s guarantor.

Types of Digital Signature Certificate

The two types of digital signature certificates legally recognized in India are:

Class 2 Certificates

It is employed in transactions where there’s a high danger of fraud. Most of it is used for e-filing tasks such as ITR filing, ROC filing, P.F, company registration, etc.

Class 3 Certificates

It is considered one of the most secure and safest of all the certificates and is used in high security and safety such as e-filing, online trading, and e-commerce.

Validity of DSC

DSCs are commonly provided with a one-year or two-year validity period. These are renewable on the expiry of the period of the initial issue.

What is Certification Authority?

certification authority (CA) is a trusted third party that will authenticate the identity of entities and their relationship to a particular key and then issue certificates confirming that identity. It ensures key security and digital certificates.

Industry Use Cases of Digital Signature

Legal services

  • Confidentiality agreements
  • Partnership agreements
  • Shareholder’s agreements
  • A Memorandum of Understanding (MoU)

Banking and finance

  • Account opening and maintenance
  • Disclosures
  • Credit Reports
  • Mortgage Applications
  • Compliance Processes
  • Loan applications


  • Policy Applications
  • Proposals and NDAs
  • Insurance Certificates
  • Claim processing documents

Retail sales

  • Licensing agreements
  • Sales/purchase orders and invoices
  • Company/End-User agreements

Human Resources

  • Employee onboarding
  • Payroll Records
  • Agreements, NDA’s, Contracts
  • Tax forms


  • Computer-Aided Design (CAD)
  • ECOs (Engineering Change Orders)
  • Non-Disclosure Agreements (NDAs)


  • Patient consent forms
  • Health records/reports
  • Prescription for drugs
  • Clinical orders
  • Lab reports


  • Contract with subcontractors
  • Purchase orders
  • Non-Disclosure Agreements (NDAs)

Quality control

  • Policies,
  • Standard Operating Procedures,
  • Test Procedures
  • Field Service, Maintenance, and Calibrations Reports

Are Digital Signature secure?

Documents with digital signatures have an additional layer of protection. Paper documents are easily misplaced and can fall into the wrong hands, while digital signatures eliminate this risk by storing documents on the cloud. When a document is signed with a digital signature, it is automatically turned into an encrypted file. The encrypted file contains information about the file’s creator, such as the sharing medium, the sender’s IP address, and the transaction’s timing, among other things. All this information protects the document and simplifies file validation. The receiver can easily check the document’s validity after decryption. Any changes to the document are visible to the receiver.

Why should you adopt a Digital Signature?

Apart from the security factor, there are several other benefits of digital signature. Some of them are:

1. Saves time and money: Signing multiple documents with a digital signature takes only a few seconds. It also saves money on paper and mailing supplies for businesses, as well as the time of resources that were earlier involved in physical paperwork.

2. Enhanced employee productivity: Digital signature helps companies by enabling staff to focus more on other productive duties rather than wasting time on manual paper processes.

3. Enhanced customer experience: When compared to paper-based processes, digital signatures deliver a better user experience. It not only provides customers with a seamless experience of signing documents from any location, but it also saves their time and efforts of printing, signing, and mailing paper documents.

4. Environment friendly: As the signing procedure is digital, it drastically reduces paper usage, making it environment friendly.
Would you like to leverage the power and benefit from the advantages of a digital signature? We’d be delighted to assist and advise you with the deployment of digital signatures in your organization.

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