The development of the digital economy is currently a new phenomenon in global economic governance, both in developed and developing countries. The role of digital signatures within this new digital economy is increasingly being felt.
According to a recent Jakarta Globe article, instant document signing has led to a quite dramatic increase in national income from the digital sector, which reached USD 44 billion in 2020, an increase of 11 percent over the previous year’s figure of USD 40 billion.
As you can imagine, the formal signing process using a wet signature takes a lot of time and money. This leads to an indirect reduction in state revenue as a whole across various economic sectors of national importance. With digital signatures, unnecessary costs can be cut by up to 50 percent. This leads to increased income from the digital sector, which will have a significant positive impact on the national economy.
So what are the advantages, opportunities and challenges of digital signatures and their impact on the digital economy? Here's the review.
Advantages of electronic signatures for the Digital Economy
The use of digital signatures and digital identities provides benefits for those working in the digital economy, including consumers, or providers of goods and services. A study by the McKinsey Global Institute lists six advantages of digital signatures:
1. Increased consumer security
Consumers will feel the impact of digital signatures and digital identities, especially in terms of payment transactions. All transaction processes will be more secure because the system can only be accessed by the owner and is secured with encryption features. This makes the authentication process faster and more accurate, and can protect against malicious acts such as spoofing and scamming.
2. Increased employee productivity
Digital signatures can also increase employee productivity, with an easier, faster coordination process between sellers and buyers. Employees will also serve buyers faster than usual, meaning increased efficiency. Digital signatures are also used to verify buyers automatically so that they can be used to create faster, safer, more practical payroll services than using time-consuming conventional methods.
3. Access to MSME Digitization
The digital economy has also opened up opportunities for MSMEs. However, to get easy digital access and assistance for business actors, MSMEs must register their businesses. Digital signatures can help efficiency and ensure the accuracy of MSME actors during the registration process. Similarly, contract signing and insurance matters can be completed without incurring high costs, thereby saving time so that businesses can further develop their business.
4. Digitizing Public Services
The increasingly rapid digital economy has also had an impact on the digitization of public services to support the needs of the community more quickly; for example, for business administration and tax management. Digital signatures can be integrated into reports. Tax payments can be made through the company's digital services.
5. Acceleration of Policy Realization
Digital signatures also provide an opportunity to accelerate the realization of policies in government institutions. Digital signatures can be used to enter into cooperation or capacity-building agreements, as well as for administrative verification processes supporting agencies that require new policies.
6. Facilitating Business Asset Ownership
Digital signatures make it easier to own business assets. Entrepreneurs are able to secure business more easily with deals that occur digitally and remotely. Without the need for face-to-face transactions, deals can be finalized in a shorter time. Digital signatures also lead to enhanced corporate agility, which means that companies have no difficulty in making various buying or selling decisions.
Digital Signature Opportunities and Challenges in the Digital Economy Era
Digital signatures pose challenges and opportunities that must be considered by all parties. Here are some ways that digital signatures can be used in the digital economy:
Digital signatures can be used by companies and government agencies to mitigate digital economic risks, and prevent cyber crime.
Digital signatures are a potential source of increased customer satisfaction. If done well, they will help show to consumers that your company is fully attentive to their needs. This in turn will lead to increased brand loyalty.
Digital signatures accelerate economic equity, because they can be used anywhere and any time when supported by appropriate internet infrastructure.
Challenges to implementation of digital signatures include:
Sub-optimal digital infrastructure: Although the digital economy is designed to make it easier for people to transact, it requires adequate infrastructure. Remote areas find it difficult to get the reliable internet connection needed to enable digital signatures.
Government regulations or regulations: Currently, there are indeed regulations governing the use of digital signatures. However, this regulation needs to be properly communicated so that the public understands that digital signatures are legal and recognized by the government and the law. This effort should be jointly undertaken by companies, governments, and the digital-signature service provider itself.
This is an overview of digital signatures and their role in creating new opportunities for companies and governments as well as individuals in the era of the digital economy. If your company requires information and services for digital signatures and other digital identities, consider making PT Indonesia Digital Identity a partner for your corporate development.