Chances are, the last time you engaged in a real estate transaction in the United States you used DocuSign. The last time you bought something online from Walmart, you might have used Adobe Sign. Electronic signatures have facilitated transactions for millions of consumers in the United States and around the world. Harking back to real estate, for instance, it is quite common nowadays for parties to settle transactions without having to appear in person as this blog explains. This represents a major change in how things are done and one that most consumers and businesspeople welcome.
That’s why it is important to support trade deals such as the United States Mexico Canada Agreement (USMCA) that encourage the use of e-signatures. It is also why it is critical to support legislation that potentially increases the use of e-signatures even further. An example of such legislation is the proposed “Creating Advanced Streamlined Electronic Services for Constituents Act of 2019,” the CASES Act. The legislation would allow members of the public to sign off on privacy act consent forms electronically when requesting services from their member of Congress.
An additional example can be seen in the 21st Century Integrated Digital Experience Act (IDEA), which was signed into law (Public Law No. 115-336) on December 20, 2018. This landmark digital government bill digitizes the delivery of critical federal citizen services and helps to improve customer experience. One section of the act requires agencies to submit a report to the Office of Management and Budget detailing how they intend to utilize electronic signatures; and furthermore, strongly encourages federal agencies to digitize manual processes and accelerate the adoption of electronic signatures. Opportunities for cost savings exist at the state level as well. Hawaii, for instance, saved $5 million in two and a half years using e-signatures.
North America leads the way so far
North America accounted for 40% of the e-signature market in 2017 according to the firm, Prescient & Strategic Intelligence. In the United States, due to legislation at the state and federal level, 47 of the 50 states have adopted the Uniform Electronic Transactions Act (UETA), and in 2000, the U.S. passed the Electronic Signatures in Global and National Commerce Act (E-SIGN). These laws permit the use of electronic signatures for nearly every type of transaction.
Exponential growth forecast for the sector – Europe and Asia-Pacific set to start catching up
The market for e-signatures is set to grow exponentially. According to MarketsandMarkets, the electronic signature market will grow from USD 1.2 billion in in 2018 to USD 5.5 billion by 2023. This growth will come from increased use in all sectors and functions including human resources; education, research; financial services; government, defense; healthcare and life sciences; legal; real estate; manufacturing and engineering. The MarketsandMarkets report suggests that Europe will see the fastest growth, suggesting that a possible U.S.-EU trade deal should include language encouraging e-signatures.
US firms in the ascendancy
CISION PR Newswire characterizes the state of competition in this sector as “moderate.” MarketsandMarkets profiles the following companies, ten out of 16 of which are American: Adobe (US), OneSpan (US), Gemalto (Netherlands), Ascertia (UK), DocuSign (US), Entrust Datacard (US), SIGNiX (UK), Secured Signing (New Zealand), Identrust (US), and Kofax (US), RPost Technologies (US), HelloSign (US), MultiCert (Lisbon), GlobalSign (US), RightSignature (US), and Zoho Corp (India).
So, pass the USMCA
The USMCA’s Chapter 19.6 says, among other things, that parties may not deny the validity of electronic submissions (with some exceptions) and that each party should include the use of interoperable electronic authentication. Much of the language is hortatory, but it is nonetheless worthwhile for North America. This is just one more reason to encourage the Congress to pass USMCA as soon as possible.
And pass the CASES Act as well
The CASES Act would enable congressional constituents to request services from Members of Congress using an electronic signature for privacy act waiver purposes. The Bill also requires the Office of Management and Budget (OMB) to issue guidance on electronic consent forms, specifically on how constituents will authenticate themselves when seeking constituent services. Ultimately, if the legislation passes and when OMB issues the guidance, members of the public will be able to use their mobile phones to request services. This will be an enormous advantage during natural disasters, when people often do not have access to scanners, faxes, and other devices that are needed for today’s cumbersome application process. Very often the only devices that works during a natural disaster is a mobile phone. Because the bill now contains language requiring the use of authentication, there is now executive branch support for the proposed legislation.
The e-signature market has an ability to have an outsize positive effect for consumers and businesses in facilitating transactions. It is a sector where US firms lead and therefore, we should do what we can to encourage this sector.