Alive and Well, As a Matter of Fax

Conventional wisdom has consigned the facsimile to the dustbin of obsolete technology, along with answering machines and Rolodexes. One tech observer summed up this view in 2020, writing that “the rise of personal computing, the Internet, specifically email, and the advent of the PDF file format all colluded to kill the fax machine.”

As it turns out, reports of faxing’s death are greatly exaggerated. According to eFax, one of many companies that enable customers to send and receive faxes over the Internet, more than 17 billion individual documents were sent by fax in 2019. Christian Schenk, marketing manager at cloud faxing provider Retarus, estimated in that company’s recent “Global Fax Trends and Innovation: 2024 and Beyond” webinar that the U.S. healthcare industry alone accounted for more than 9 billion of those.

Those are not the last gasps of a dying technology, either. According to the Global Fax Services Market—Outlook & Forecast 2023-2028 report from Research and Markets, the fax market can expect a compound annual growth rate of 11.05% during that period, increasing from $3.18 billion in 2022 to $5.96 billion in 2028.

Alireza Ghasemzadeh, founder and CEO of Geneva, Switzerland-based workflow solution provider Alohi (which includes online fax service Fax.Plus among its offerings) said, “The growth of the fax market is driven by the intersection of regulatory requirements and technological advancements. Regulatory requirements still necessitate the use of fax for secure document transmission in several industries. At the same time, technological advancements have made faxing easier and more efficient, enabling companies to rely on fax technology more confidently and integrate it into their operations.”

Security

The regulations to which Ghasemzadeh points include the well-known Health Insurance Portability and Accountability Act (HIPAA) in the U.S., and the similar Personal Health Information Protection Act (PHIPA) in Canada; the ISO/IEC 27001 international standard for information security; and the Systems and Organization Controls 2 (SOC2) security framework for financial data developed by the American Institute of Certified Public Accountants.

Not surprisingly, the industries most affected by those regulations are among the heaviest users of fax. In 2020, online tech publication TechGenix conducted a survey (PDF download) of its fax-using IT and business readers. Of the 22% of respondents classified as “heavy” users (more than 100 pages sent or received per week), the industries represented most included the healthcare, legal, and financial sectors.

Several factors can make faxing more secure than other communications technology. Traditionally, faxes are sent over the telephone network, but only after establishing a peer-to-peer connection. Analog phone lines are not subject to the common kinds of hacking that email and other Internet-based forms of communication are, and faxing is also less subject to phishing attacks; it can be easy to get someone to click on a link in an email, but it is much more difficult to trick them into faxing their personal information.

That doesn’t mean that traditional faxing is invulnerable to attack, however. Traditional faxes are not encrypted, and the University of Oregon’s IT Service Portal warns they can be intercepted by someone tapping a phone line. It also is possible to compromise fax machines themselves by sending them images encoded with malware. And, of course, many organizations have replaced analog phone lines with Voice over Internet Protocol (VoIP) systems, which route faxes through the Internet anyway and open them to new forms of attack—call interception and caller ID spoofing, for example.

Modern VoIP systems use encryption to address such concerns, as do the numerous cloud-based fax options now available such as Retarus and Alohi. These services encrypt faxed documents during transmission to protect them even if they are intercepted.

Interoperability

The same old-school nature of fax that makes it seem obsolete is actually another of its advantages. Cloud-based fax services and their integration into other communications methods mean that faxing no longer requires printed copies, or even physical fax machines. According to Ghasemzadeh, “Multi-platform access allows users to send and receive faxes from various devices, including desktops and mobile devices.”

At the same time, the traditional fax machine still has a role. In that Retarus webinar, the company’s chief of staff Tim Armstrong said technologies that could theoretically supplant fax are not as easily implemented across the entire communications ecosystem. For example, he said, direct messaging is “a closed network, which requires all parties to participate in order to really function. It isn’t the case that your mom-and-pop doctor’s office down the road can easily implement it.”

Global business

U.S. companies working with international partners also need to be aware of how popular fax continues to be in other countries. According to a 2023 survey by German digital economy association Bitkom of 505 companies in Germany with 20 or more employees, 82% of responding companies said they still use fax, while a third use it “frequently or very frequently.” That second number is down from 40% in 2022, but it still means that anyone working with German companies should be prepared to communicate by fax.

The persistence of fax is even stronger in countries that do not use the Roman alphabet. In 2021, the Japanese government announced plans to eliminate fax machines from government departments, but it was forced to backpedal after hundreds of government offices said the move would be “impossible.” It is possible to use keyboards and mobile devices to write Japanese, but older users are still more comfortable writing by hand on paper.

Similarly, the use of personal seals called hanko for signing business and governmental documents is still widespread in Japan. The images of such seals can be transmitted via fax, but they don’t have a place in digital communications, and the Japanese government has met resistance in its attempt to abandon those as well.

Signatures and confirmation

Faxes also have a legal standing that emails and other digital documents may not. For example, contracts and other legal documents can be faxed to multiple people in different places, letting them each sign individually. Such signatures are considered legally valid and enforceable.

Similarly, a fax sender gets confirmation pages that their communication has been received, containing details like the date and time of the transmission. “A fax confirmation receipt is an important document that can help confirm your sensitive information reached the recipient,” according to online fax service FaxBurner. “It also serves as your insurance in case there are issues regarding the documents exchange.” Cover sheets are so important that healthcare professionals can download HIPAA-compliant cover sheets to use when faxing sensitive information.

Future prospects

People in the fax industry expect the technology to continue to evolve. A significant issue with faxes in a modern digital workflow is that a fax is an image of a document; it may contain text, dates, prices, and other information, but in an unstructured format. According to Research and Markets, “The data received electronically would result in the generation of a document that is not necessarily going to be easily searchable and does not fit easily into modern databases.”

Automating the extraction and categorization of such information will be the next major step. Retarus’s Armstrong said, “Enhancements in automation, improved OCR, and advanced analytics will continue to play significant roles. The new techniques in the market like AI and Natural Language Processing can not only read the data but interpret what type of document it is and where that key information should be.” Retarus said its service enables faxing to electronic data interchange systems, enabling, for example, a flow of business data directly into a company’s enterprise resource planning system.

“These innovations will further integrate faxing into digital ecosystems, enhancing its functionality and relevance,” concluded Ghasemzadeh.

Jake Widman is a San Francisco, CA-based freelance writer focusing on connected devices, Smart Homes and Cities, Extended Reality, and other emerging technologies.