Infrastructure & the Digital Economy: why Public/Private partnerships are crucial in the coming year
We live in a truly digital age- and currency is no exception. As we discussed in our previous blog (https://www.apaylo.com/post/digital-currency-the-future-is-now), 90% of the United States Dollar is digital (and 92% of other global currencies, respectively).
As we transition towards a purely digital economy, a major factor in the future of the space is infrastructure- and the union of the public and private sectors in providing the basis for this infrastructure- as Sopnendu Mohanty, the Chief FinTech Officer of the Monetary Authority of Singapore states in his article (which can be found here: https://www.nasdaq.com/articles/the-future-of-fintech%3A-public-and-private-partnerships-2019-11-11)
While the private sector is going through a period of innovation to bring digitized financial services to a larger portion of people; it has encountered obstacles such as building trust and identity; plus economic viability of serving populations in economically underdeveloped areas, who are not as wealthy or financially literate as First World clientele. Mohanty states that a strong public infrastructure is required to address these challenges- by ensuring inclusivity and accelerating innovation in terms of information and how it is exchanged.
Public digital infrastructures can help countries to improve the economic and social well-being of their populations by providing the basics in digital services more affordably, efficiently, and at a faster speed. Having such an infrastructure in place would allow actors ranging from governments to private businesses and citizens to conduct financial transactions in a more efficient manner- while strengthening the system as a whole by providing security (such as protection against hackers.)
Already, countries like India, Estonia, and Singapore have invested a great deal in a national digital infrastructure- and it is paying off for them in spades. Singapore has led the way by developing three key digital services as part of its infrastructure which provide for security of digital identity and citizen consent. SingPass allows citizens to access both government and private sector services through a singular digital identity. PayNow facilitates peer-to-peer real-time fund transfers that run on Singapore’s real-time payments system. Lastly, MyInfo is a consent-based platform that enables citizens to authorize third parties to access their personal data and make business decisions relating to that customer.
Not to be outdone, over the past decade India has been developing its national initiative- IndiaStack- which is a set of APIs (Application Programming Interfaces) that allow businesses, governments, and citizens to tap into its national digital infrastructure- which is in turn allowing for a variety of new products and services to be developed in both public and private spheres. International technology companies are flocking to India to be part of this revolutionary system.
Lastly, Estonia’s X-Road platform connects public and private sector systems and allows them to share information. Collaboration with the government has allowed for a strong policy framework that has enabled citizens to access online services using only their digital ID card- which serves as the equivalent of a handwritten signature. With this digital ID card, citizens can vote, pay taxes, and do their online banking. Pretty incredible, eh?
Canada and the United States can follow the examples that Singapore, India, and Estonia have set- and allow for their economies to be further digitized- but as we have seen in the preceding examples- strong collaboration between the public and private sectors is a MUST; so that a proper and comprehensive infrastructure can be created that will serve as the backbone of digital finance- and allow for easier facilitation of payments. In the coming years, you can expect to see North American citizens and companies tapping into this infrastructure- and a lot of jobs and wealth will be created in this space alone. The future looks very promising indeed!