In the banking context, EDS refers to Electronic Distributed Signature.
Understanding Electronic Distributed Signature (EDS)
The Electronic Distributed Signature (EDS) is a security mechanism used in banking to authorize transactions or orders. Here's a breakdown of how it works:
- Order Submission: A subscriber (e.g., an employee of a company) initiates a transaction or submits an order to the bank.
- Approval Process: This order must be approved by another designated subscriber (e.g., a manager) within the organization. This dual-authorization adds a layer of security.
- Bank Posting: Only after the order has been approved by the second subscriber will the bank process and post the transaction.
Example:
Imagine a company needs to transfer a large sum of money.
- An accountant (the first subscriber) initiates the transfer request through the bank's online system.
- The request is then routed to the company's CFO (the second subscriber) for approval.
- The CFO reviews the transaction details and, if everything is correct, approves the transfer using their EDS credentials.
- Only after the CFO's approval is received does the bank execute the money transfer.
This system ensures that no single individual can unilaterally initiate large or sensitive transactions, minimizing the risk of fraud or errors.
