Definition, functionality and practical examples
Digital signature:
The guide for your business
Inhaltsverzeichnis
What is a digital signature?
A digital signature is a cryptographic method based on a key pair (private/public) that ensures the authenticity and integrity of electronic data.
It works in a similar way to a handwritten signature, but is based on mathematical algorithms. A digital signature makes it possible to prove that a message or file originates from the stated sender and that it has not been altered during transmission.
The technology behind is easy to explain: first, a unique hash value – a kind of digital fingerprint – is generated from the data to be signed. This hash value is then encrypted using the sender’s private key. The result is the digital signature. The recipient can verify the signature using the sender’s public key. If the values match, the authenticity and integrity of the data are confirmed.
It works in a similar way to a handwritten signature, but is based on mathematical algorithms. A digital signature makes it possible to prove that a message or file originates from the stated sender and that it has not been altered during transmission.
The technology behind is easy to explain: first, a unique hash value – a kind of digital fingerprint – is generated from the data to be signed. This hash value is then encrypted using the sender’s private key. The result is the digital signature. The recipient can verify the signature using the sender’s public key. If the values match, the authenticity and integrity of the data are confirmed.
Origin/
Authenticity
The digital signature confirms the identity of the sender.
Authenticity/
Integrity
The digital signature guarantees that the content has not been tampered with.
Essential terminology related to digital signatures
Digital signatures are a core component of secure online communication and legally binding digital processes. However, there are many terms around this topic that are easily confused with one another – ranging from “electronic signature” to “digital seal”.
The following overview explains the most important technical terms and shows how they are related.
The following overview explains the most important technical terms and shows how they are related.
| Term | Type / Context | Exact meaning | Comment |
|---|---|---|---|
| Digital Signature | Technical (cryptography) | Cryptographic method for ensuring authenticity and integrity. | Always asymmetric cryptography; not a legal term. |
| Electronic signature | Legal (see eIDAS) | Umbrella term for electronic procedures that link a person's identity to a document. Has three levels: SES, AES, QES. | Legal effect depends on the level. |
| Digital seal | Legal and technical | Equivalent to an electronic signature, but for legal entities (organisations rather than individuals). Proves authenticity and integrity. | Not a declaration of intent, but proof of origin and authenticity. |
Use cases for digital signatures
Digital signatures provide the security foundation for modern IT systems.
They protect data from tampering, verify the identity of senders and ensure that business processes are verifiable and trustworthy. Whether it is signing documents, securing software or protecting sensitive communication – digital signatures are used wherever integrity and authenticity are essential.
To understand how this technology comprehensively safeguards our digital everyday life, it is worth taking a look at the key areas in which digital signatures play a central role today:
They protect data from tampering, verify the identity of senders and ensure that business processes are verifiable and trustworthy. Whether it is signing documents, securing software or protecting sensitive communication – digital signatures are used wherever integrity and authenticity are essential.
To understand how this technology comprehensively safeguards our digital everyday life, it is worth taking a look at the key areas in which digital signatures play a central role today:
-
Software development (code and package signing)
Digital signatures ensure that software, updates and packages come exactly from the original developer and have not been tampered with. They protect users and businesses from malware and supply chain attacks. -
Blockchain & cryptocurrencies
Every transaction on a blockchain is digitally signed. This provides clear proof of who owns digital assets and who has authorised a transaction. -
Encrypted data transmission for websites and emails
Digital signatures are central to HTTPS certificates and signed emails. They ensure that websites are genuine, connections are securely established, and messages cannot be altered without being noticed. -
Authentication & access control
Modern login methods such as smart cards, FIDO2 or enterprise SSO use digital signatures to securely verify identities and prevent unauthorized access – without traditional passwords. -
Document signing (electronic signature)
Digital signatures enable legally binding electronic signatures, ensuring that documents cannot be altered unnoticed and that the signer can be clearly identified.
A major area of digital signatures is the electronic signature, which involves not only the technical but also the legal aspects.
The legal basis for the electronic signature is provided by eIDAS, the “electronic IDentification, Authentication and trust Services” regulation.
The legal basis for the electronic signature is provided by eIDAS, the “electronic IDentification, Authentication and trust Services” regulation.
eIDAS – the legal basis for the electronic signature
EU-wide legal certainty thanks to eIDAS
Before eIDAS (electronic IDentification, Authentication and trust Services), there was no uniform framework for electronic signatures in the EU. This caused issues, as electronic signatures from one country were often not recognised in another.
The eIDAS regulation provides the legal framework for electronic identification and trust services in the EU and governs the use of trusted services such as certificates, seals and timestamps.
Regarding the electronic signature, eIDAS distinguishes three types of signatures, which are used depending on the level of security and legal effect.
The eIDAS regulation provides the legal framework for electronic identification and trust services in the EU and governs the use of trusted services such as certificates, seals and timestamps.
Regarding the electronic signature, eIDAS distinguishes three types of signatures, which are used depending on the level of security and legal effect.
Simple electronic signature (SES)
The simple electronic signature (SES) refers to any electronic form of signing, such as a scanned signature or a click-to-accept confirmation.
It is used when quick and straightforward declarations of intent are sufficient without identity verification.
Example: internal approvals
Advanced electronic signature (AES)
The advanced electronic signature (AES) is designed technically so that it can be clearly linked to a specific person, allows their identification, and makes any subsequent changes to the document detectable.
It is used when a higher level of security and authenticity is required.
Example: B2B or B2C contract agreements
Qualified electronic signature (QES)
The qualified electronic signature (QES) represents the highest level: it is based on a qualified certificate and is legally equivalent to a handwritten signature.
It is used when compliance with the legal written form is required.
Example: employee temporary staff contracts
In short:
Without eIDAS, the use of electronic signatures would be uncertain and country-specific. With eIDAS, businesses can work digitally, sign contracts legally, and operate across the EU without worrying about legal recognition.
Advantages of digital signatures
Digital signatures offer many advantages for businesses: they save time and costs, enhance security and transparency, and promote sustainability through paperless workflows.
Time and cost savings
Using digital signatures significantly reduces processing times. Documents no longer need to be printed, mailed, or scanned. The digital signing process can be completed in just a few clicks. Signatures can be collected regardless of location or time. Mandatory fields prevent missing returns, and reminders are sent automatically.
Companies save valuable time, reduce delays, and simultaneously lower costs for paper, printing, and postage.
Greater security and transparency
The security level of a digital signature is significantly higher than that of a handwritten signature. Modern technologies allow the identity of the signer to be verified. In addition, all changes to the document can be fully tracked. Professional signing solutions protect signed documents from alterations, ensuring that tampering is impossible.
Sustainability through paperless workflows
For a standard ream of copy paper (500 sheets, A4, 2.3 kg), a total of 7.5 kilograms of wood, 130 litres of water, and 26.8 kilowatt-hours of energy are consumed! Companies that consistently adopt digital processes reduce their ecological footprint and actively contribute to environmental protection. At the same time, their corporate image improves with customers and partners who increasingly value sustainable practices.
Software for digital signatures
To use digital signatures efficiently in your business, you need electronic signature software.
Here’s what to consider when choosing one:
Software producer
- Data protection: Is it a European company that can guarantee compliance with GDPR?
- Data processing: Where is the data stored and by which service provider? Where are the subcontractors located?
- Certifications and standards: Is the company ISO 27001 certified, or only the data centre? Is there an audit according to C5 criteria?
- Customer support: Is there a dedicated contact person?
Product
- Operation: Is the solution GDPR-compliant? Are on-premises or SaaS options available? Is data sovereignty ensured (e.g. Cloud Act)?
- Flexible licensing models: Can the software be used stand-alone and integrated? Is it customisable?
- Connectivity: Is there an API? Are integrations with existing systems available? Which trust service providers (TSP) are available for qualified electronic signatures?
- Ongoing development/updates: Is the signing solution continuously improved?
- Certifications and standards: Is the signature eIDAS and ZertES-compliant and based on PAdES? Is the software also fully accessible?
- Market presence/reputation: Is it a proven and reliable solution? How are the reviews on Google, Capterra, OMR Reviews, etc.?
- User experience: How easy and intuitive is the software to use?
Sign documents digitally: real-life use cases for businesses
By using digital signatures, companies can sign legally binding contracts digitally and make their processes more efficient.
Whether in HR, contract management or the finance department, digital signatures allow documents to be signed securely, legally and without media disruption across all business areas.
With digital signatures, companies save time, reduce errors, and ensure that documents are protected from tampering. This accelerates workflows, lowers administrative costs, and at the same time creates transparency and traceability.
Whether in HR, contract management or the finance department, digital signatures allow documents to be signed securely, legally and without media disruption across all business areas.
With digital signatures, companies save time, reduce errors, and ensure that documents are protected from tampering. This accelerates workflows, lowers administrative costs, and at the same time creates transparency and traceability.
| Sector | Examples | USE |
|---|---|---|
| Contract management | Employment contracts, supplier contracts, NDAs | Faster processing without media discontinuity |
| Sales | Quotations, order confirmations, framework agreements | Faster deals, shorter sales cycles |
| Human resources (HR) | Onboarding, home office agreements, holiday requests | Paperless personnel files, simple approval processes |
| Finance | Invoice approvals, tax documents, internal authorisations | Transparency, audit trails |
| Purchasing & Procurement | Orders, supplier contracts | More efficient workflows |
| IT & Compliance | Approval of data protection policies, security policies | Verifiable consent |
| Customer communication | Contracts, declarations of consent | Digital customer experience |
FAQ: Frequently asked questions about digital signatures
A digital signature is generally understood as the electronic equivalent of a handwritten signature on a document. Its purpose is to verify identity (authenticity) and protect the document from alterations (integrity).
The terms “digital signature” and “electronic signature” are often used interchangeably when referring to signing digital documents such as PDFs or Word files. However, a “digital signature” is a term from computer science describing the cryptographic method, while an “electronic signature” is a legal term defined in the eIDAS regulation.
There are various tools for signing contracts digitally: free online tools, professional software as a cloud-based web application, or integrated into your own software. For business processes, professional signing solutions such as inSign are recommended.
Still hungry for more?
Here you will find further specialist articles that may be of interest to you.
How to digitally sign PDF documents
The most important information about the eIDAS Regulation
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