Fundamentals of Digital Transaction Management

Michael Laurie is one of the founders of ESRA. At the time, about 10 years ago, he was with Silanis. They had a number of companies involved with e-signatures, the industry was evolving, and we had a number of experts on the legal and compliance side of things who were involved in UETA and the ESIGN Act. They had all been involved with the Electronic Financial Services Council.

“A set of guidelines had come out of that involving e-signatures and e-records, and some of the folks involved, such as Jerry Buckley and Margo Tank, approached us,” he told us in an ESRA-exclusive interview. “They, along with a number of other vendors, wanted to see if we were interested in forming an association. We got together and came up with the rules of the road, and ESRA was born out of that.

“At Silanis, we had been involved with everything to do with e-signatures going back to the early 1990s. And we knew Jerry and Margo and David Whitaker back in the 2001 timeframe, so it made sense for us to get involved with ESRA at that point. That was in 2006.”

Silanis’s Status as a Canadian Company

“eSignLive, which used to be Silanis, is today part of a company called VASCO that’s headquartered out of Chicago.” he described. “When we started, we were focused on US laws. I had been involved in several initiatives before ESRA, such as New York ESRA (not the same ESRA), HIPAA, and the FTC. We had been involved in several initiatives at federal, state, and local governments. Everyone was concerned about the legality of e-signatures and we felt it was important to get involved with that.

“Internationally, at the same time this was happening in the US, other countries were implementing their own laws. The impetus for that had come from initiatives at the United Nations. The US, Canada, and Australia were among the early leaders, and now over 90 countries have laws around e-signatures.

“Back then, there were only two or three different ways to do e-signatures. The US law was good because it was technology neutral, which helped adoption in the US. Different companies were pushing various kinds of technology, but there were only a few ways to do this that were being adopted around the world. Working with folks in ESRA who understood that situation was beneficial for us and the whole industry. It helped get people to recognize that you didn’t need the most complex technologies or methods to have a legally enforceable transactions.”

“Today, the US has the highest rate of adoption, but the rest of the world is catching up. The US was the first to achieve a lot of breakthroughs with e-signatures.”

The Most Interesting Changes in ESRA

“The organization’s goal has always been the same, which is education around e-signatures and e-records and helping governments and organizations understand what they can do. People think there are a lot of restrictions around it, but in reality, there aren’t that many. You can use e-signatures in many types of transactions.

“We started with meetings and conferences with our members and people outside our organization. The scope of our annual conference expands every year. We started with the basics of the law and now it’s become how it impacts the industry and new technologies, as well as electronic identity, its impact on block chain technology, and other topics.

“The legaility of e-signatures is much less of an issue now. It’s more about how business transactions can become more digital now, and how banks, insurance companies, and other regulated industries can interact with government and make the transactions easier.

“Regulations are still important. They’re evolving. Today, a big part of what ESRA is doing revolves around public policy initiatives beyond e-signatures and how we can move that forward so that mortgage, auto finance, insurance, and other industries can be electronic.

What Digital Transaction Management Means

“I tend to focus more on the term “digital transaction” because the general population needs to better understand the move to a digital world. For a long time we’ve talked about e-signatures, e-records, and e-commerce, but now we’re shifting away from “e-“ to “digital.”

“When I started with Silanis in 1992, everyone perceived e-signatures as a way to take paper-based processes and make them electronic. Today, a lot of people aren’t even thinking about paper in the first place. Many transactions start purely digital today. Looking at different generations, younger people are less inclined to worry about electronic transactions because they haven’t had to convert from paper, as opposed to a member of the older generation.

“Yes, there are people still moving paper into the digital world, but we need to think about digital transactions, with all the data and records being digital. A digital transaction is a necessary part of the digital economy., which is moving forward with things like Bitcoin.

“Software and cloud-based services are a big part of managing digital transactions as we go through them. People are trying to create standards around them, but the general folks out there using phones, tablets, and computers to do business online are focused on digital transactions.

“The market is starting to understand that online business is digital and it needs the services to support that. That’s what we’re all working toward.”

Ways to Make Life Easier With the Large Amount of Digital Transactions Today

“The other big aspect of this digital marketplace is the concept of digital trust and the whole consumer issue around people saying, “What have I done?” They’re, for example, using a cab and getting a receipt by email, doing online banking, and so forth, and worrying about keeping their identities secured.

“We need to know we can trust what we’re doing online and we’re not putting our assets and identities at risk. We see three big things around that.”

1. Trusted identities – “We’re not sure how they’ll evolve. Some countries have issued trusted IDs to consumers, where government plays a big role. In the US, we’re reluctant to go down that path, even though the government has played a big role in paper-based IDs in the past. I don’t know if North America will at some point suffer some serious incidents that will cause consumers to decide they need a proper set of digital identities issued by trusted sources like the government.”

2. The devices we’re using – “There’s a great opportunity there because of the rise of smartphones and how much people care about them. They care about those devices more than their wallets. But we need trusted channels for who we do business with through those devices. There needs to be a stronger infrastructure in place so we know a website or app is trusted when we conduct business. A lot of services are competing to become the infrastructure that will allow us to have a trusted channel between ourselves and who we interact with online.”

3. Trusted transactions – “We need to know that the audit data in a digital transaction is attributed to us, not someone else. The availability and integrity of the data is important. You need access to the data to verify your transaction, such as receiving a receipt by email. That applies to everything we do online.”

How to Properly Align Resources With Digital Transaction Security

“Companies that are providing services and products digitally, whether it’s a digital service or a tangible product you’re receiving, need to get involved and make sure everything they have in place is going to provide digital trust to their customers. For consumers, they need to know they can trust who they’re doing business with, whether it’s a company or a government.

“Standards for security are evolving, and that will help those organizations gain trust with their customers. We all know security is not where it needs to be at this point. Some of the things happening shouldn’t be happening because the technology to prevent those hacks is out there.

“Any online digital business needs an internal organization to monitor what’s happening with the company’s systems and third party systems, and reacting to digital threats out there. Nearly every business has a website, but they need to have secured transactions, a privacy policy, and standards for how they act. It’s not just your website – it’s third party services too.

“Those are the biggest things that companies and governments need to think about. And we all need to make sure we’re subscribing to the same level of trust.”

Government’s Place in Digital Transactions

“Government needs to take a leadership position. They don’t do enough of that. They’re lagging behind, and government gets lost in the politics of the digital economy. Many laws prevent adoption by government agencies of digital transactions. For example, many areas of DMV transactions are off-limits to digital transactions because of out-of-date regulations that conflict with existing laws.

“We run into these issues at the local, state, and federal levels. We’re hopeful that leaders in government will become more sensitive to the fact that this situation needs to change so it’s easier for everyone to adopt digital transactions. It can create a digital gap in the economy because for some people, they don’t have to worry about digital, whereas for others, they can get a lot more done if they can do things online.

“Government has to work toward that end and make it a priority. There are several areas where things aren’t aligned yet.

“The other aspect is government adopting a leadership role with trusted identities and working with the industry to facilitate that. And they need to cater to the right things for consumers in the marketplace. Sometimes certain types of things with security have to be based on standards. That applies to individuals and companies.

“That’s something ESRA can help with.”

Goals For ESRA in 2017

“ESRA has a great role to play with industry in driving the idea of digital transactions forward, and with the idea of digital trusts as well. One of my responsibilities is with the annual conference and how we can reflect digital transactions and how the industry is evolving. We want to focus on overcoming barriers to adoption in the industry while promoting the technologies that will help that happen and getting industries like banking, mortgages, and others to get involved with the new technologies coming along next, like digital identities and blockchain.

“We all need to feel safe when conducting digital transactions in the online world. ESRA needs to push forward with public policy issues that address what government should be doing to give people access to digital transactions and conduct them in a safe and trustworthy fashion.”