The world will definitely be going paperless before it goes cashless, and there’s nothing like a pandemic to serve as a huge catalyst for a company like DocuSign--one of the primary beneficiaries of what is now one of the hottest growing industries to ride the tailwinds of COVID-19.
Signing documents online has, of course, long been accepted as a luxurious convenience, but it hadn’t caught on like wildfire due to some overriding fears of fraud, forgery and the like.
Social distancing has changed all of that and electronic signatures that were rather slow to be adopted are now becoming the new norm, especially with companies mandating or encouraging employees to work from home.
DocuSign, a company that CNN called “once-boring”, has now been transformed into a $37-billion tech darling.
The company controls about 70% of the e-signature market, with Adobe’s Sign solution being the primary competitor.
Last fall, for $219 million DocuSign acquired contract and document management company SpringCM, which at that time had more than 600 customers. Currently, DocuSign is used by more than 500,000 customers and hundreds of millions of users worldwide.
The stock has certainly loved it.
The company added more customers in the first six months this year than in all of 2019, with shares skyrocketing more than 170% YTD.
And there appears to be more room to grow here.
According to a recent report by P&S Intelligence, the digital signature market will exhibit a CAGR of 28.6% from 2020 to 2030.
It’s all being helped along with the fact that local and federal authorities are aware of the need to let this trend broaden and have moved to enact various regulations to make it easier for customers and companies to sign official documents digitally. Prior to the COVID-19 pandemic, only a handful of states permitted remote notarization of documents.
In March, bipartisan legislation called the “Securing and Enabling Commerce Using Remote Electronic (SECURE) Notarization Act of 2020” was introduced to Congress. The bill permits nationwide use of remote online notarizations, a type of electronic notarization where a notary and signer are in different physical locations.
The bill hasn’t passed yet, though. Until it does, federal agencies are implementing relief on a case-by-case basis. If the SECURE Act becomes law in its current form, it would authorize every notary in the country to perform remote online notarizations (RON). Currently, there are 27 states that have enacted some form of RON.
Since April, several states’ governors have also issued executive orders easing the requirement for in-person notarizations by permitting the use of remote or electronic notarization. Even the IRS has temporarily allowed digital signatures on several forms.
So what happens when the pandemic is declared “over”. Will it negatively impact companies like DocuSign? Probably not.
Despite the fact that many businesses are re-opening, many companies, especially in the tech industry, are planning to keep their workers at home, and once you let the e-sign cat out of the bag, it will be very difficult to cram it back in.
Many large corporations are expecting to have more than half of their employees back to offices by the end of the year and some extended their policies even into next summer. On the other side, major tech companies are allowing remote work permanently.
Beyond that, a recent survey by Cybersecurity Insiders found that 33% of U.S. companies anticipate some positions moving to permanent remote work and over half plan to increase their budget for secure remote work.
By Michael Kern for Safehaven.com