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It's been nearly 18 years since the federal Electronic Signatures in Global and National Commerce Act was passed, legalizing electronic signatures. Since then, e-signature software has infiltrated nearly all aspects of business and daily life. It's used by large enterprises to share information with employees, as well as customers at point-of-sale terminals in grocery stores, malls and gas stations.
"E-signatures makes distribution simpler," said Aaron Walker, research lead at G2 Crowd, a Chicago-based peer-to-peer business software review platform. "It's a lot easier to send documents in an email to your entire company than hand out, collect and organize paper documents."
Electronically signed documents can also be securely backed up to reliable cloud or on-premises databases to take up less physical space and be available for easier retrieval.
Naturally, as electronic signature technology has surged, so has the number of e-signature software options available to organizations and users. G2 Crowd tracks the leaders in the industry, as well as the features offered by each provider.
E-signature software companies cater to users in human resources, financial services, legal, real estate and anyone working with sensitive documents. The tools -- which are also frequently available as apps for mobile devices -- can be used by virtually anyone, from insurance brokers and financial managers to healthcare providers looking to comply with privacy regulations or architects finalizing deals with their clients. A number of e-signature tools are also emerging to cater to specific industries, like real estate, insurance, education and government.
The e-signature software industry is not dominated by a just a few players. With already approximately 71 products to date, the market will only continue to grow. P&S Market Research predicted more than 20% growth in the U.S. digital signature market from 2017 to 2023, with the market value reaching more than $1 billion. DocuSign leads on market presence, with nine other tools attracting more than 100 reviews on G2 Crowd.
"Cloud-based document storage is the way of the future, so they're not going away anytime soon," Walker said.
Last year, Adobe Sign became the first in the e-signature software industry to become equipped with an entirely cloud-based functionality. Walker called moving to the cloud more intuitive for e-signature software than blockchain-based systems -- a continuously growing list of records, called blocks, which are linked and secured using cryptography. The encrypted, anonymous nature of blockchain can be a roadblock for e-signature use within blockchain transaction systems, Walker explained.
On the other hand, smart contracts validate transactions anonymously and automatically. "It's kind of the antithesis of e-signature, but could work hand-in-hand in a more centralized cryptocurrency system like Ripple," Walker said. "In the long run, I could see blockchain-based smart contracts chipping away at the digital signature market, but that's a long way down the road."
While very few companies or thought leaders are telling business professionals not to use e-signature tools -- and no state has ever banned its use -- some experts do harbor concerns about security of the tools. And some of their arguments are valid, according to Walker. "The lack of global standards is an issue. International financial transactions or real estate deals won't always look the same or require the same levels of authentication," he said.
Labeling anything a "secure document" makes it a target for hackers, so some legal experts have insisted on establishing validation and security requirements. The first step in reducing the threat is establishing compliance norms. "People shouldn't be afraid to talk about how to make digital signature solutions more secure," Walker said.