Digital signature software converts a message or electronic document into a string of letters and digits with an arbitrary length. It utilizes the private key of the creator of the digital signature to decrypt the result. The recipient’s app for documents decrypts the hash whenever the document is signed and compares it to the original hash supplied by the sender. If the documents are the same and the recipient can be assured that they are genuine and not altered with.
Digitally signed documents are also traceable, making them useful to verify the authenticity of a variety of documents, such as tax filings, banking, mortgages and medical records. This feature also allows companies to save money by eliminating the need for paper, which can reduce the costs associated with storing and transporting documents. It also reduces the environmental impact of handling and destruction of paper documents.
The legal validity of digital signatures is contingent upon the rules and regulations that are in place in the sector or country where they are utilized. For example, numerous financial institutions and banks require more secure and robust eSignature standards, such as FIPS 140-2 Level 3 and FIPS Certification 201 to ensure the authenticity of the signature.
Additionally, most countries require a dedicated eSignature application to be used for official documents such as contracts and agreements. These apps are set up to comply with the standards set by the local authority, so the company can prove they are using a legally legitimate eSignature.