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SignTime October 2024 newsletter: E-Signature adoption in Japan: The hybrid nature of digital transformation

Hello from the SignTime team and welcome back to our regular newsletter! 

It is uncommon for two companies’ competing in a marketplace to cite one another, but at SignTime our view is we want to help people understand and adopt digital transformation, consistent with our Corporate Mission of bringing all paper workflows online.

In August this year, market researcher Professional Tech Research Institute published an interesting market study on behalf of CloudSign, a subsidiary of Bengo4.com highlighting that Japan is a hybrid market with a mixed paper and electronic approach, even for those companies using e-signatures and similar products.  We have always had a large amount of respect for CloudSign, as one of the innovators in the e-signature space in Japan. We believe their findings are insightful and give an interesting snapshot of the state of digital transformation in Japan as a whole.

The survey found that among the CloudSign customers polled, a whopping 85% of respondents said that they had used a physical seal (hanko) on an external business document in the past year. Internal business documents, theoretically the easiest to gain adoption, still had a 70% response rate of physical seal usage.

The survey had some other interesting gems as well:

  • Contracts were the number one document type requiring a “hanko” with a physical signature.
  • “Business practices and preferences of counterparties” was the number one reason given (65%) for continuing to use paper.
  • 70% of those polled said that hankos should be eliminated for internal documents altogether.

This survey shows some of the realities of digital transformation within Japanese corporations, particularly as it relates to that digital last mile, the e-signature. Read more on the survey and some additional insights… 

Now for the Good News!

At SignTime, we also see a hybrid approach to DX in some parts of our customer base, particularly with respect to documents and contracts between unrelated parties.  SignTime has always focused on enabling ease of use and eliminating friction from the back office. That sometimes means recognizing that there are many documents that are not ‘contracts’ but still require a signature or a recorded authorization.  We also think the translation of ‘e-signature’ to denshi keiyaku 電子契約 (literally electronic contract) may have inhibited the growth of the industry in its early days as a contract requires a degree of diligence and preparation that is materially different from a signature of assent.

Lowering Barriers to e-signature Adoption

In SignTime’s case, we’ve focused on being the fastest and easiest to use, with our internal data showing that a typical SignTime contract sent via SMS for e-signature is signed in 28 minutes.  Our platform has also been implemented in a fashion that does not require an external cost (timestamp or long term signature, Japanese link) for every document, but instead allows the sender to choose to use when it’s appropriate.

One of the other things that we have spent a fair amount of time and effort on is having the best hanko experience for a Japanese back office. This means enabling printing in portrait or landscape mode, allowing a user to insert spaces if entering via a keyboard, or, alternatively, uploading his own hanko. 

Happily, the pictures in some parts of the market are much brighter still, as firms in real estate, restaurant/hospitality, technology, education and embedded SaaS products are much further along the adoption curve. 

Application Updates (September-October 2024):

Over the past month and a half or so, we’ve focused on a few customer-facing developments, one of our favorites being the “Alert” (or reminder) feature. As anyone working with agreements can tell you, being reminded about them before they expire, auto-renew or require additional payment can be hugely valuable. We are currently working on but have not yet released improved internal approvals, where multiple internal approvals are supported before sending, instead of single stage only. So for those of you with sales quotes approved by sales managers approved by the CEO, and then sent to the client – well, this will hopefully do the trick.

There have been a few things under the hood as well: One of the key items has been a better display and tracking of utilization for our white-label/OEM partners (which have multiple customers underneath them) so it is easier to manage and monitor activity. That “Partner Portal Phase One” will be available for partners later in October, with larger clients seeing some of the benefits later in the year.

We have also been doing some work to get our JIIMA certification, which ties in to the Japan Electronic Bookkeeping Act (link in Japanese). It’s not very exciting (what certification ever is?) but it is important.

As always, if you want to speak further about how we can help your business on its DX journey? Book a time or send us an email.

That’s all for this edition and if you or your team have any questions on DX or any other e-signature or electronic contracting issues, get in touch!

Best regards,

Jim

Co-Founder and CEO

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