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Jun 14, 2023

Digital Signatures Hold Potential for New Opportunities in the Digital Economy

The development of the digital economy is currently a new phenomenon in global economic governance, both in developed and developing countri

Digital signatures and identities benefit those working in the digital economy, including consumers or providers of goods and services.
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 dramatic increase in national income from the digital sector, reaching 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 across various economic sectors of national importance. With digital signatures, unnecessary costs can be cut by up to 50 percent. This increases income from the digital industry, significantly impacting 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
Digital signatures and identities benefit 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 identities, especially regarding payment transactions. All transaction processes will be more secure because the owner can only access the system, which 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 a more straightforward, faster coordination 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 more quickly, safer, and 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, MSMEs must register their businesses for easy digital access and assistance for business actors. Digital signatures can help efficiency and ensure the accuracy of MSME actors during registration. 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 impacted the digitization of public services to support the community's needs more quickly, such as 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 and for administrative verification processes supporting agencies that require new approaches.

6. Facilitating Business Asset Ownership
Digital signatures make it easier to own business assets. Entrepreneurs can secure business more efficiently with deals that occur digitally and remotely. Without face-to-face transactions, arrangements can be finalized in a shorter time. Digital signatures also enhance corporate agility, meaning that companies have no difficulty making various buying or selling decisions.

Digital Signature Opportunities and Challenges in the Digital Economy Era
Digital signatures pose challenges and opportunities that all parties must consider. Here are some ways that digital signatures can be used in the digital economy:

Companies and government agencies can use digital signatures to mitigate digital economic risks and prevent cybercrime.

Digital signatures are a potential source of increased customer satisfaction. If done well, they will help show 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 anytime when supported by appropriate internet infrastructure.

Challenges to the 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 getting a reliable internet connection to enable digital signatures challenging.

Government regulations or regulations: Currently, there are indeed regulations governing the use of digital signatures. However, this regulation must be communicated appropriately so the public understands that digital signatures are legal and recognized by the government and the law. Companies, governments, and the digital-signature service provider should undertake this effort jointly.

This is an overview of digital signatures and their role in creating new opportunities for companies, 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.

Click here for more information about VIDA Sign.

VIDA - Verified Identity for All. VIDA provides a trusted digital identity platform.

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