Digital code wins signing power

Handwritten signatures could be on the way out. imagepoint

Since the beginning of 2005, the electronic signature in Switzerland has had the same status as a handwritten signature for contracts and business transactions.

This content was published on February 20, 2005 - 18:56

Experts say the latest advance on the digital front could also boost the purchase of goods over the internet and increase the use of online government services.

Since computers, fax machines, mobile phones and electronic diaries invaded our lives, signatures are one of the few things that people still write by hand.

But now even this precious symbol of personal identity seems destined to disappear, replaced by numerical codes and digital sequences.

On January 1 of this year, new legal provisions came into force which effectively give virtual signatures equal status with handwritten ones.

"For the purposes of administrative law, a few legal adjustments still have to be made," said Jean-Maurice Geiser, a lawyer at the Federal Communications Office.

"Where civil law is concerned [governing individuals and companies], an electronic signature can now be used for almost all contracts and transactions", he added.

Certificate needed

To be legal however, a digital signature must be approved by a firm authorised to provide certification services. Three firms have so far applied to have their certificates officially approved.

"By the middle of the year, companies and individuals should be using electronic signatures", said Reto Grubenmann, the manager responsible for the certification service at KPMG Switzerland.

His company has been appointed by the federal authorities to grant approval to firms intending to offer certification services. Its task is to assess the conformity and reliability of the firms’ security systems.

One of the purposes of the new legislation governing digital signatures is to simplify and speed up many administrative transactions between individuals, companies and the state.

Being able to sign contracts or official documents in just a few seconds, irrespective of distance, will also facilitate relations between Switzerland and the Swiss community abroad.

It is also expected to boost electronic commerce, which until now - despite considerable growth - has primarily been restricted by the issue of security.

Greater security

Experts are sceptical about the reliability of current practices, based mainly on the transmission of credit card and bank account data.

"It all depends very much on individuals’ expectations about security," said Grubenmann.

"Some people are prepared to let anyone have their credit card details via the internet or over the phone. Others, like myself, will do so only if they are given adequate guarantees," he told swissinfo.

Electronic signatures are based on an asymmetric coding technique, whereby the key used to decipher the data is different from that used to codify it.

Users therefore have two complementary keys: a private one, to be jealously guarded, and a public one, which can be disclosed to third parties.

The technology, regarded as extremely secure, is not new. In some countries – in particular, Finland, the Netherlands and Austria – the system has been up and running for some time.

Banks in Switzerland have also used it for several years to enable their customers to conduct banking or stock-exchange transactions.

"But each bank has its own system. An electronic signature, on the other hand, enables the user to certify his identity at any time with any bank, company or government office", said Grubenmann.

Costs as yet unknown

Electronic signatures will be used mainly in the business-to-business sector, which at present account for 95 per cent of world electronic commerce.

The providers of certification services are also targeting ordinary consumers. Depending on the numbers of customers they attract, the charge for the service should initially be around SFr100 ($84.5) a year.

"Whether or not electronic signatures are a success will depend on the degree of trust the systems inspire among consumers", said Communications Office expert Geiser.

He called on the federal authorities to play a key role in creating trust, by introducing e-government and e-voting – thereby getting people used to the new digital procedures.

Swiss lagging behind

Compared with other European countries Switzerland’s government administration has been slow in introducing electronic services.

The Swiss federal system, which gives the country’s 26 cantons a high degree of autonomy, and public spending cuts are just two reasons for the delay.

It could also hamper plans to introduce an electronic identity card, fitted with a microchip which is capable of verifying the holder’s electronic signature.

In Finland, Sweden and Belgium, this new document, designed to simplify many administrative and private services, is already a fact of life for the majority of the population.


Key facts

On 1 January 2005, a new law came into force which gives electronic signatures equal status with handwritten ones.
This new form of proof of personal identity has already been introduced in Finland, the Netherlands and Austria.
Electronic signatures are based on an asymmetrical coding system, which makes it possible to identify the sender and at the same time verify the integrity of the message.

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In brief

In 2003, according to data published by the United Nations Conference on Trade and Development, electronic commerce accounted for SFr2,000 billion ($1,689 billion )worth of business.

95% of the operations concerned were business-to-business transactions.

Where private consumption is concerned, the electronic market is worth more than SFr30 billion in EU countries (representing 1% of all retail trade) and SFr50 billion in the US (1.6%).

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