In the era of digitalisation, electronic signatures are becoming increasingly important. They enable us to digitally sign documents quickly and securely without having to rely on paper and pen. One of the most efficient forms of electronic signatures is the advanced electronic signature (FeS). In principle, PACTA offers all three variants of electronic signatures. However, most users opt for the advanced electronic signature. In this article, we will explain why and take a closer look at this type of signature, how it works, how it differs from other types of signatures and how it is legally effective.

Pen and paper die out

Traditional paper mail is being used less and less. According to the Bitkom Digital Office Index 2020 , by 2019 71 percent of German companies were still using mail frequently or very frequently, but by 2020 it was only just under half.

Experts predict that the market for digital signatures will grow by an average of 29.2 percent annually from 2021 to 2030. The use of contract management software makes the use of e-signatures so secure and simple that even former sceptics are increasingly supporting the introduction of electronic signatures.

The advanced electronic signature - what exactly is that?

The advanced electronic signature is a form of electronic signature regulated in Art. 26 of the European eIDAS Regulation. It ensures the security, authenticity, integrity and confidentiality of electronically signed documents to a high degree. An advanced electronic signature must meet the following requirements:

(a) It is uniquely associated with the signatory;

b) It allows the identification of the signatory;

c) It is created using electronic signature-creation data that the signatory can use with a high degree of confidence under his sole control;

d) It is linked to the data so signed in such a way that subsequent alteration of the data can be detected.

The eIDAS Regulation distinguishes three types of electronic signatures: the simple electronic signature, the advanced electronic signature and the qualified electronic signature.

The simple electronic signature is the most basic form of electronic signature. It can be easily created, e.g. by entering a name or attaching an image. However, this type of signature does not provide a high level of security or binding force and is often considered insufficient, especially for legal or business purposes.

The advanced electronic signature (FeS) offers a higher level of security compared to the simple signature. It is linked to the identity of the signatory and allows the integrity of the document to be verified. The advanced electronic signature already meets most legal requirements. Only for transactions with special formal requirements it may not be sufficient. Fortunately, the law of the European Member States does not provide for such special formal requirements for more than 80% of B2B contracts.

The qualified electronic signature (QeS) is the strictest and most secure form of electronic signature. It is issued by a qualified trust service provider and is based on an advanced electronic signature. The QES meets the highest requirements for authenticity and legal bindingness and is legally equivalent to the written form in many countries. The disadvantage of the QES, however, is the legally required identification procedure (often Video-Ident procedure or SmartCard procedure). These procedures are expensive and cause a high initial effort for all authorised signatories of the contracting parties. Not everyone wants to go through the same effort as opening an account in order to sign the next supply contract with a long-term business partner.

How exactly does the advanced electronic signature work?

The advanced electronic signature is based on cryptographic techniques. It uses an individual key pair consisting of a public and a private key. The private key is only assigned to the signatory and must be kept secure. The public key is used to verify the signature.

When using an advanced electronic signature, the electronic document is signed using the private key. The signature is then transmitted together with the document. The recipient can then verify the signature using the signer's public key and establish the authenticity and integrity of the document.

PACTA handles the entire process of creating and sending the authentication elements for you and additionally stores relevant signature data on a blockchain. All contracting parties and signatories thus have a high degree of certainty that the document is reproduced unchanged and the signature is not forged. It is practically impossible to change the data afterwards. Here you can find more information about our signature process.

Advantages of advanced electronic signatures

The advanced electronic signature has the perfect cost-benefit ratio for the vast majority of contract types in the everyday business world:

Efficiency: concluding a contract with advanced electronic signatures is quick, easy and convenient with just a few mouse clicks within seconds.

Cost savings: Electronic signatures make it possible to sign documents quickly and efficiently online without having to send physical copies and sign them in person or resort to expensive identification procedures.

Legal binding effect: The advanced electronic signature is recognised as legally binding in most European countries for all types of contracts without any special formal requirements.

Security and integrity: By using cryptographic techniques, the advanced signature ensures the authenticity and integrity of documents. This ensures that the signed document has not been tampered with.

Environmental friendliness: By avoiding paper and using digital signatures, the consumption of resources is reduced and a contribution is made to sustainability.

The modern and uncomplicated way of closing deals

The advanced electronic signature offers a secure and efficient way to sign documents online. With its high security standards and legally binding effect, the FeS helps to fully exploit the benefits of digitisation. While advanced electronic signatures continue to proliferate, it is important to be aware of the legal requirements in different countries to ensure that the type of signature chosen meets the relevant requirements.

When do you use the benefits of digital signatures in ai-driven contract lifecycle management?

If you too would like to extract and manage your contract data automatically, contact our sales department and arrange a free demo without obligation.