Throughout history, acts of forgery have been committed for as long as the alphabet has been around. Laws to discourage these crimes are traceable all the way back to 80 B.C. This is when the Romans prohibited the falsification of documents that transferred land to heirs. Forgery comes in various forms as a way to deceive another party for personal gain. In the particular case of signatures, it has long been the only way to authenticate a person’s identity. A simple signature has become so symbolic that it has become a sworn declaration of someone’s intention. Signatures have not always been hand written because literacy has not always been as prevalent as it is today. Historically, people have used everything from a simple cross to a seal created with a wax seal.

Today, transactions and the exchange of contracts are often electronic. For many, it is still a very new and scary concept. After all, it was not that long ago that we were still using dial up to connect to the internet. Many might think of the seemingly new concept of the electronic signatures as the unknown territory of the wild web. Well, it is not a new concept at all and in fact, it started in the Wild West.

Electronic Signatures in Morse Code

Long before the use of electronic signatures, businesses were using dotted communications of Morse Code to sign contracts. Furthermore, courts were implementing laws to protect these documents. The 1869 case of Howley v. Whipple is a great example of this. “It makes no difference whether the operator writes with a steel pen an inch long attached to an ordinary penholder. It also doesn’t matter whether his pen be a copper wire a thousand miles long. Nor does it make any difference that in one case common record ink is used, while in another case a more subtle fluid, known as electricity, performs the same office.”

Just like we accommodated business practices long ago, we also need to accommodate business practices by way of electronic signatures. Laws were created as the demand for efficiency increased because of the explosion of the internet. By June 2000, the U.S. created two acts for this. To protect and meet the needs of the changing business landscape, these acts needed to be put in place. There are two Electronic Signature acts. The first is the Global and National Commerce Act (E-Sign Act). The second is the Uniform Electronic Transactions Act (UETA). Both of these laws satisfy a signature requirement when the parties involved in a transaction have agreed to proceed electronically. An electronic signature is defined as electronic proof of a person’s identity involving the use of encryption. Electronic signatures also authenticate documents.

In Review

While many might think of electronic signatures as just another way, financial institutions are accommodating the millennial generation. It goes beyond mere convenience. It has the potential to increase connections and open up financial avenues that may not have been attainable otherwise. Each new advancement is met with challenges, but the necessary adaptations are made in the process. As Steve Jobs once said, “We always overestimate the change that will occur in the next two years. We also underestimate the change that will happen in the next ten. Don’t let yourself be lulled into inaction.”

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