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Importance of Digital Signature and Certification in Financial Institutions

Author: Abovethefoldwriter Mumbai
by Abovethefoldwriter Mumbai
Posted: Aug 26, 2022

It is difficult or next to impossible to forge documents and messages that are digitally signed. Digital signatures differ from their electronic counterparts. They comprise of a large string of numerals that are impossible to decipher, they are accompanied by the encrypted document called digest or hash value. The digitally signed documents or messages are encrypted using cryptography, and they can be accessed or opened only by using a public key sent to the receiver.

Digital Signature is not like hand written or electronic equivalent. The electronic version of the signature is made using hardware or software online and appears as a facsimile of handwritten signatures. Both have nothing in common with DS since it is represented numerically and is used during the encryption process.

In the case of DSC, an application is to be made with the CA, and a fee is applicable for the certificate issued. The certificate contains details of the person as well as the expiry date.

Key Generation

The digital key generation is a complex process, and the signer is certified by the certifying authorities called CA. The CA is authorized by the controller of Certification Authorities in India and can provide individuals and organizations with digital signature certification. The certification is procured by making a payment to the CA or its partner. The basic function of the certificate is as follows:

  • Authenticate the sender
  • Create Integrity


These virtues are enough to create trust since in a one-to-one relationship on the world wide web the identity of the sender is confirmed.

Role of Digital Signature Certification in the Finance Sector

DSC for short is a security measure on the web, especially when dealing with an unknown entity. In most instances, digital certification acts as a 3rd party assurance for certifying the identity of the sender. The DSC provides an additional layer of security during banking-related transactions. The cryptographic mechanism does not only certify the identity of the sender at the other but as mentioned above it is a guarantee of integrity such that the article tampering is easily detected if ever possible and another great benefit accrues from the fact that the digital signatures once in place makes the commitment made is not repudiable. Yes, the sender cannot retract and the hacker cannot open the encryption thanks to cryptic intrusion. But care should be taken as nothing is impossible and the encrypted article could be cracked under extraordinary hacking efforts. Anyway, for all practical purposes, the encrypted articles are not venerable if the private key is not disclosed. Hence their implementation in signing contracts, financial transactions, e-tendering, client authentication in banking matters, and tax compliance is increasing day by day.

The certificate can be used in banking as identity proof in order to avail of financial services or access information and execute transactions. In commercial banking, the Class 3 DSC is considered a legal authentification for opening new bank accounts and for making payments online.

What is Class 3 Digital Certification?

The online banking systems support class 3 digital signature certificates that are issued to both individuals as well as organizations. These are issued on personal appearance at the CA and are valued for eCommerce application and banking.

Example of Class 3 Digital Certificate usage:

  • e-tendering
  • e-Auctions
  • Income Tax Return filings
  • EPFO
  • PF
  • GST
  • e-procurement

While Class 1 and Class 2 DSCs are used for signing general documents Class III being more secure is preferred as being fit enough for high-valued transactions and data security. All DSCs are priced differently, and the application procedure also differs, like in the case of Class III DSC where personal appearance before the certifying authority (CA) is a must to get the certification.

In order to avail DSC, one needs to apply to a DSC provider nearby. The application details the type of certificate required, it is accompanied by authenticating documents, and the public key. The fee applicable depends upon the certification type.

About the Author

A group of writers at Above the Fold Digital Marketing and Web Development Company in Mumbai India

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Author: Abovethefoldwriter Mumbai
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Abovethefoldwriter Mumbai

Member since: Aug 01, 2022
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