fbpx
asset-1

Digital Signatures: Definition, How Does it Work, and Regulations

cara kerja digital signature

Every digital document we use at work requires a signature before being sent to business partners or customers. Thanks to technological advances, you can use digital signatures without the need to print documents and sign them manually. Some technologies also make digital signatures more secure so that their authenticity can be guaranteed. So, how does this digital signature work? Read the explanation in this article.

Definition

A digital signature is a digital document authentication method that uses cryptographic technology to verify the authenticity of a document.

This signature can be used to identify the sender of the document and ensure that the document has not been altered by an unauthorized party.

The process of creating this signature involves the use of a private key and a public key in a cryptographic algorithm. The private key is only known to the owner of the signature, while the public key can be accessed by anyone.

The signature creates a unique code that is attached to the document, ensuring the authenticity of the source and the integrity of the document.

Read also: e-Meterai: Functions and Its Uses in Different Industries

Regulations in Indonesia

sign stamps

Does a digital signature have the same legal force as a wet signature? The answer is yes because there are several rules governing digital signatures used in Indonesia.

First, Law Number 11 of 2008 concerning Electronic Information and Transactions (ITE Law). Article 11, Paragraph 1 of the law states that electronic or digital legal signatures have valid legal force as long as they meet the following conditions:

  • Electronic Signature creation data is related only to the signer
  • Electronic Signature creation data at the time of the electronic signing process is only in the power of the signatory
  • Any changes to the Electronic Signature that occur after the signing time can be known
  • Any changes to the Electronic Information related to the Electronic Signature after the signing time can be known
  • There is a certain method used to identify who the signer is
  • There is a certain way to show that the signer has approved the related electronic information.

The Financial Services Authority (OJK) itself has allowed the use of electronic signatures in signing loan or credit service agreements. This has been regulated in OJK Regulation Number 77 of 2016 concerning Information Technology-Based Lending and Borrowing Services.

Read also: How to Make a Digital Signature (7 Steps)

How it Works

The security of a digital signature cannot be separated from the way it works, which involves cryptography technology and the use of private and public keys. To understand how it works, you can see the procedure below:

1. Key Creation

The signature creation process involves creating a pair of keys, namely the private key and the public key. The private key is known only to the owner of the signature, while the public key can be accessed by anyone.

2. Encryption Process

When someone creates an electronic signature, the signed document is then encrypted using the private key. This encryption produces a unique code called a hash or digest.

3. Public Key Usage

The resulting hash can then be verified by anyone with a public key. The public key is used to ensure that the electronic signature comes from the rightful owner of the private key.

4. Document Authentication

Document authentication proves any changes to the document since it was signed. If the document is altered, the electronic signature does not match the resulting hash and is therefore considered invalid.

5. Digital Certificates

Digital certificates are used to validate the public key associated with an electronic signature. These certificates are issued by an authority and can be accessed to ensure the validity of the signature.

6. Signature Verification

The recipient of the document uses the associated public key to verify the electronic signature. If the signature matches the hash of the document, then the document is considered valid and nothing has been changed.

7. Cryptography Algorithm Usage

This signature uses cryptographic algorithms to ensure the security of the encryption and decryption process. Cryptography keeps the signature safe from attempts at forgery or unauthorized changes.

Read also: How to Sign Stamps Based on Stamp Duty Regulations

Benefits for Work

Digital signature has become an innovative solution in supporting the security and validity of electronic documents. Here are the advantages of this signature:

1. Higher Security in Signing Digital Documents

These signatures use cryptographic technology that makes signatures difficult to forge. By involving a private key and a public key, the encryption process ensures that only the authorized owner of the private key can create an electronic signature.

2. Strong Authentication

The authentication process through digital certificates provides a high level of certainty regarding the identity of the signature owner. Digital certificates are issued by authorities, increasing legal validity and identifying the parties involved in the signing process.

3. Maintained Document Integrity

An electronic signature not only marks the authenticity of a document but also ensures its integrity. By creating a unique hash or digest for each document, electronic signatures ensure easy verification against unauthorized changes or manipulation. The document remains intact from the moment it is signed, so its contents remain secure.

4. Business Process Efficiency and Speed

The use of electronic signatures speeds up business processes because you don’t need to print and mail physical documents. Electronic signatures can be done quickly, cutting down on the time it takes to get conventional approvals or signatures.

5. Economic and Environmentally-friendly

Electronic signatures not only save time and money but also have a positive impact on the environment. The reduction in paper usage and energy required for the transportation of physical documents results in a positive impact on environmental sustainability.

In addition, e-signatures provide a more economical solution in the long run, reducing costs that are usually incurred in traditional processes.

Read also: Easy Steps to Buy Online e-Meterai for Your Various Needs

Examples in Industries

Digital signatures have become an effective solution for managing electronic documents. Here are examples of successful e-signature usage in various industries.

1. Finance

In the finance industry, electronic signatures can speed up the transaction process and increase document security. Examples include the use of electronic signatures in bank account opening, loan applications, or stock transactions.

2. Health

In healthcare, electronic signatures are used on medical documents and patient forms. For example, doctors and patients use electronic signatures to electronically approve treatment agreements, insurance forms, or drug prescriptions.

3. Legal

In the legal industry, e-signatures speed up legal processes to make them more efficient. Contracts, agreements, and other legal documents can be signed electronically, shortening the time and reducing the cost of sending physical documents.

Benefits of Signatures from eendigo

Meterai Elektronik

Nowadays, many systems are available to help you create a digital signature. However, there is only one superior choice that is reliable for your business, the eendigo digital signature app. There are three advantages that you can experience by using eendigo:

1. Making Geographical Limitations Redundant

eendigo eliminates geographical limitations in the document signing process, no matter where your partners or customers are located. They can sign documents only through devices used in their respective locations without having to travel.

2. Relieving Work Burden for Similar Tasks

One of the advantages of eendigo is its ability to reduce the workload associated with repetitive tasks. Tasks that previously required significant time and effort can now be addressed quickly and seamlessly so that you and other employees can focus more on more complex tasks.

3. Integrated with the e-Meterai Solution

In addition to signatures, e-Meterai is also needed when you take care of documents that require stamps. The good news is that eendigo is already integrated with the e-Meterai solution so you don’t have to switch applications in document attestation.

There is no doubt that digital signature is the solution you should use to make your daily work more efficient and effective. Contact us to try the demo version of the eendigo digital signature and experience the benefits!