The nationwide lockdown to stem the flow of coronavirus has brought almost all business activity to a standstill. Most people are working remotely and it is causing problems across verticals--from vendor onboarding, hiring new employees, drawing up contracts to even getting approvals from top bosses.
Digital signature and electronic documentation startups are looking to leverage these disruptions. Companies have gone remote for more than a week now and are using Slack, Zoom and Hangout to stay connected, but signatures and approvals continue to be a challenge.
“It was very difficult to convince companies to go paperless and use digital signatures for contracts and deals, what Covid19 has done is forced even the most traditional companies to think along these lines,” said Krupesh Bhat, co-founder of Legaldesk, referring to the respiratory illness caused by the coronavirus.
Legaldesk and SignDesk are two products of Bengaluru-based startup Desk Nine, which offers digital signatures to more than 40 large enterprises. Food delivery platforms are using it to onboard restaurants, housing aggregators for landlords and fintechs for customers.
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Like Desk Nine, startups such as Leegality, eMudhra and Digio offer digital signatures, electronic stamping, paperless documentation and other services to corporates in India and even outside.
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While a large chunk of startups and few non-banking financial companies (NBFCs) adopted these solutions, public sector enterprises and large corporates were hesitant. The virus outbreak could change that.
“We are seeing around 25 to 30 inbound inquiries every week now compared to four to five under normal circumstances,” said Kaushik Srinivasan, head of strategy and analytics at eMudhra. The Bengaluru- based company offers emSigner, citizen electronic signatures and paperless office solutions.
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While these queries hold a promise, the startups have also lost a lot of business as consumption slows down. With discretionary spending almost down to zero, loans are hardly getting processed. These startups relied on NBFCs and fintechs for a large chunk of their business.
Digital signatures are recognised as per the Information Technology Act as a valid instrument for enforcing contracts. These signatures can be done through crypto-tokens, Aadhaar or video-based verifications.
These are valid in a court of law but companies still prefer “wet signatures” on paper by taking print outs and scanning them for digital safe-keeping.
Now that couriers or office staff cannot run around to get the signatures on paper, digital options seem to be an obvious choice.
A few days back, Gurugram-based Leegality helped an acquisition to get completed by managing the paperwork digitally.
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Cofounder Sapan Parekh said the process had bankers, advisers, the acquiring entity and the company that was to be acquired. All the documentation and signatures were done digitally through Leegality’s software solution within a few hours. Usually, the process takes days.
If not for Covid19, such a deal would never have been accomplished remotely, he said.
“Technology once used can bring in the wow factor, we have already seen a jump of ten times in terms of the number of queries,” said Parekh.
Even Bhat of Legaldesk said he received queries from multiple companies stuck in various stages of deal signing with suppliers and vendors. A private airport in one of the biggest cities in the country has held talks to adopt Legaldesk products for onboarding contractors.
They are all looking at digital signatures to finish the paperwork so that they can get started once the restrictions are lifted.
“Contract execution is a key area where companies are looking to deploy solutions like ours,” said Bhat. “What is starting now as an emergency measure, we expect, will soon get adopted in the normal workforce.”
Even hiring can be streamlined through digital paperwork and signatures.
A founder of a fintech startup in Bengaluru said since his house and office were closeby, someone from the administration team would come to get his signatures. But he was relying on DocuSign whenever he could to sign digitally. DocuSign is an American company that helps businesses manage paperwork electronically.
“Slowly, I see a lot of legal heads also relying on digital signatures, which was not the case before, therefore the mindset is changing,” he said.Besides workflow automation, it also helps in reducing operational costs. Most companies have been doing it for decades and have never built in these costs into their accounts, but now they may start looking at it, say industry insiders.