--- description: What is a digital signature? Are they legally binding? And how do they differ from e-signatures? Learn more about how to create a digital signature here. image: https://gdm-localsites-assets-gfprod.imgix.net/images/capterra/og_logo-e5a8c001ed0bd1bb922639230fcea71a.png?auto=format%2Cenhance%2Ccompress title: What is a digital signature, and how to create one? --- # What is a digital signature, and how can you create one? Canonical: https://www.capterra.co.uk/blog/1660/what-is-and-creating-a-digital-signature Published on 02/02/2023 | Written by Sonia Navarrete, Eduardo Garcia. ![What is a digital signature, and how can you create one?](https://images.ctfassets.net/63bmaubptoky/X-rMOk4QBjAE2MI9ogCsm09YcE-J1ob3Jnak45LBTcg/a8c3288ffffb45b62c03880dec3f6309/creating-a-digital-signature.jpg) > This article was originally published on 07/08/2020 Digital signatures have been around for some time. Still, the COVID-19 pandemic accelerated the need for both large and small companies to conduct business matters remotely and from computers or mobile devices. This included using digital signatures to seal and verify documents like contracts, reports or crucial business procurement. But what is a digital signature? How does a digital signature work, and what are its legal and procedural requirements?  ----- ## Article Content This article was originally published on 07/08/2020Digital signatures have been around for some time. Still, the COVID-19 pandemic accelerated the need for both large and small companies to conduct business matters remotely and from computers or mobile devices. This included using digital signatures to seal and verify documents like contracts, reports or crucial business procurement. But what is a digital signature? How does a digital signature work, and what are its legal and procedural requirements? In this articleWhat is a digital signature?Which industries use digital signatures?What is the difference between a digital signature and an electronic signature?How do I create a digital signature?Which is the best digital signature software for businesses?Business processes regularly require signing and approving documents. These can vary from reports, contracts, leases, mergers and acquisitions and other business agreements and clauses. Gathering all the relevant parties to formalise a deal can take some time, but with technology, procuring a court-admissable signature and document can take a few seconds. How? With digital signature software.But what is a digital signature? How do they work, and how can digital signature software help businesses streamline administrative procedures? This article will provide the necessary information on the use of digital signatures and electronic signatures.What is a digital signature?A digital signature is a method for verifying and ensuring the integrity of a digital document. These signatures are the unique electronic “fingerprints” of a document. They are also a specific type of electronic signature (e-signature) backed by a digital certificate. A guide to digital signature softwareHow do digital signatures work?Digital signatures work in the form of coded messages that secure and associate a signer with a document. Digital signatures use a standard, accepted format called Public Key Infrastructure (PKI), which involves using digital certificates for identity verification that are cryptographically bound to the signed document and secured with a tamper-evident seal. This seal indicates that no one has altered the original document and that it isn’t a forgery. For extra security, various authenticating systems exist when using modern digital signature technology. These might rely, for example, on e-mail verifications or two-factor authentication with a pin code sent to a mobile phone.Additionally, digital signatures ensure more efficient workflows for processes such as client sign-ups because no paperwork needs to be printed or posted. They can be added to point-of-use sections (with a signature field or a signature line) on forms or contracts and even automated to make them simpler to use when multiple signatures are required on a document.Which industries use digital signatures?The COVID pandemic saw how businesses had to continue their administrative duties from a distance. With businesses incorporating remote and hybrid work, digital signatures can help businesses from multiple sectors carry out processes like signing leases, contracts and reports without waiting for employees, customers or partners to sign documents in person. Digital signatures can help businesses across many industries streamline processes and protect the integrity of their documents. Here are five industries that can benefit from the use of digital signatures. Human Resources: HR professionals can use digital signatures to speed up processes which may include signing employee contracts, onboarding documents, and legal and non-disclosure agreements. Human resources can integrate digital signatures with other useful applications, such as HR software, to help them in their daily tasks.Financial Services: Banks, insurance companies and other financial institutions can use digital signatures for almost all transactions. Digital signatures can streamline processes and provide timestamps and audit log capabilities to record processes of sensitive documents. Financial institutions can use digital signatures for loan applications, mortgage assistance, opening account requests and other transactions.  Government: Due to their security, digital signatures are a valuable tool for governments. Government offices can use digital signatures to securely manage and send sensitive information like new bills, tax returns, contracts and agreements with a reduced risk of unwanted leaks. Healthcare: Doctors, physicians and other healthcare professionals can use digital signatures to sign and process patient records and medical forms. GPs can sign documents and prescriptions that comply with the data protection act, accelerating workflows between doctors and patients. Legal: Lawyers and legal firms handle very sensitive documents and contracts. These documents often require several revisions and new signatures. Legal organisations can use digital signatures to sign and execute legal agreements, contracts and settlements securely and remotely while reducing labour and paper costs. Real Estate: Many real estate contracts need to be signed swiftly and promptly to meet deadlines. Digital signatures allow customers to sign and send documents remotely. Real estate agents can securely sign and process property documents, contracts and deeds, reclaim their time travelling between locations, and use it to attract new clients.  Digital signatures can also be used in industries as varied as the military to education or technology companies. Overall, these signatures are helpful in any industry that requires secure, efficient and legally-binding documents.What is the difference between a digital signature and an electronic signature?When talking about digital signatures, it is common to hear about electronic signatures. Digital signatures and electronic signatures are related but distinct conceptsDigital signatures are secure, electronic methods of verifying the authenticity of a document or message. These are special types of electronic signatures that contain added security features. Digital signatures use cryptography and public key infrastructure (PKI) to ensure that the signature is unique to the signer and cannot be forged. The signer receives a certificate-based digital ID, and the date is encrypted as a hash when the document is signed. When a digital certificate is applied, it comes with a qualified timestamp which tracks the time the document was signed. This way, the document cannot be modified, ensuring the document’s authenticity. Digital signatures provide a high level of security and are often used for sensitive transactions in multiple industries. They are easy to verify if a document is challenged, and the digital certificate reduces the risk of forgeries. On the other hand, electronic signatures, commonly known as e-Signatures, refer to any electronic mark or process used to sign an electronic document or message. These are electronic copies of physical signatures that provide a visual confirmation of agreements of a document.Electronic signatures can be signed by hand-writing a signature with a mouse, typing a name as text, or a more secure digital signature. The choice of method can depend on the level of security and authenticity required, as well as the legal requirements of the agreement being signed. An electronic signature does not necessarily provide the same level of security and authenticity as a digital signature, but it can still be legally binding in many cases. Overall, while both digital and electronic signatures serve the same purpose of allowing documents to be signed electronically, digital signatures provide a higher level of authentication and security due to the use of PKI and cryptography. Are digital signatures legally binding? Digital signatures comply with regulations around the world and provide a high level of identity assurance when dealing with and managing digital documents.The EU passed the EU Directive for Electronic Signatures in 1999, and the United States passed the Electronic Signatures in Global and National Commerce Act (ESIGN) in 2000. Both acts made electronically signed contracts and documents legally binding. Most countries have followed suit, and country and industry-specific regulations are continuously evolving. More recently, the Electronic identification and trust service (eiDAS) regulation has been adopted in the EU.The UK eiDAS largely mirrors the EU one, with minor changes. Article 25 of the UK eiDAS states that an electronic signature cannot be denied legal effectiveness solely because of its electronic nature. The same statute provides that electronic signatures are admissible as evidence in legal proceedings. How do I create a digital signature? Creating your own proprietary digital signature software can be expensive and time-consuming for SMEs and even larger companies. This is even more so when you consider all the relevant security measures businesses should take into account.  Thankfully, there are plenty of high-quality digital signature software packages specifically developed as turnkey solutions for enterprises that want to take advantage of them.Which is the best digital signature software for businesses?Another question is choosing which e-signature app will be best for your organisation. Helpfully, the Capterra digital signature software guide contains a list of all the relevant software packages with ratings for each. Here, you will find e-signature and digital signature software packages such as DocuSign, Adobe Acrobat and Dropbox sign\*, among others. Whether you want an app that is appropriate for legal documentation within a certain jurisdiction, a cloud-based app or one that offers customisation options, you will find it here.Bear in mind that not all businesses will have the same requirements when adopting a digital signature software system. Some will only need a few e-signatories within the enterprise while others in the business-to-consumer sector may need to handle multiple digital signatures from the public every hour of the day. The packages on offer cater to all sorts of business needs with pricing structures to match. Look out for those with free trial periods if you are not yet sure how you will use this technology since it allows you to try them out before committing.Looking for digital signature software? Check our catalogue. ## Disclaimer > \*Note: The software selected in this article is chosen by the following criteria:The highest number of reviews on Capterra.co.ukRated 4.7+ on Capterra.co.uk ## About the authors ### Sonia Navarrete Sonia is a Senior Content Analyst at Capterra, helping SMEs choose the best software. She published in Raconteur, Computer Weekly and IT Pro. Journalist and PR. ### Eduardo Garcia Eduardo is a Content Analyst for the UK. Providing research and digital tech tips for SMBs. MA in Journalism and in Diplomatic Studies. 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