How would you like a paperless office that will enable you to have at any time an overview of all outstanding signatures within your company – and to work from home as easily as if you were in the office. Electronic signatures (“eSignatures”) make your signing process significantly more efficient – and will surprise you even beyond saving resources, money, and raw materials at the same time. In the video, Jörg Ackermann, Partner at PwC Luxembourg, and Khaled Lachiheb, Director, will tell you why.

The digital transformation was already a constant in almost every aspect of our working lives before the COVID-19 pandemic started and it has disrupted several standardised processes - including the legally binding signing of key documents. Not only since then, most consumers have become used to online payment options or online banking services, even having taken these services and smoothly working online shopping for granted. This means that, in most cases, the first direct contact with a customer will take place electronically.

Nowadays, when it comes to legally binding handwritten signatures on contracts, in the banking and investment sector, most of the time the status quo consists of a real hybrid setup that mixies online and analogue processes. This level of process interventions and bureaucracy often creates frustration for both clients and many financial institutions themselves and results in decreased customer satisfaction. Sometimes this leads also to a high level of legal uncertainty and even unnoticed risk.

Did you know? Using a scanned copy of a manual signature is a widespread practice, but it is not legally binding and could create serious issues for both customers and businesses in the event of a dispute. 

Implementing eSignatures within financial institutions means making the online signing process advantageous, straightforward, and legally secure. Smartly implemented, this not only unlocks significant synergies within company groups, but it can also help companies to save time, money, and resources. At the same time using eSignatures is also highly convenient for customers as even important contracts can be signed electronically and remotely from anywhere.

In Luxembourg in particular, several centres of excellence have been focusing on objectives that go beyond technology-related considerations. Using an online signing process means significant savings on paper, printer toner and shipping costs. As a result, companies using eSignatures have a considerable competitive edge, as they are on one hand making use of their financial and human resources much more efficiently while decreasing risk exposure on the other hand.

eSignature solutions, when correctly implemented and properly used, help businesses to spend minimum 70% less time dealing with a single proposal, substantially due to savings in printing, scanning and setup.

The legislation behind eSignatures

Beside the EU electronic identification and trust services (eIDAS) 2.0 that intends to extend and promote trusted digital identities for all Europeans and that is currently in the process of being transposed on the level of EU member states, a detailed and comprehensive framework on digital operational resilience (DORA) for financial institutions is currently being set up in the EU creating a regulatory framework on digital operational resilience, whereby all firms must ensure they can withstand, respond to and recover from all types of ICT-related disruptions and threats.

Also, a new draft law regarding the use of digital tools and processes was published especially on the introduction of the digitalisation of the notarial profession enabling the establishment of companies online and without the need to appear in person anymore.

When it comes to regulatory requirements and the distinction by type of eSignature it can present a significant challenge, since there is no single regulation across the various EU Member States. While the eIDAS regulation provides a good overall European framework, individual Member States also have additional regulatory requirements to be considered and met. This means that regulatory requirements may vary from one country to the other – representing a particular challenge in a cross-border operating model.

A central challenge consists in the strategic decision to identify the provider who will be best placed to implement their individual processes most efficiently – bearing in mind that providers generally are specialised on different industries but also on geographical areas.

A company’s IT infrastructure should meet certain prerequisites to smoothly use eSignatures based on requirements regarding IT security, archiving systems, eIdentification procedure (which will be impacted by the eID Wallet introduced by the EU in September 2023) as well as the necessary cloud infrastructure.