India is one of the largest and fastest growing digital markets globally and is the fourth largest spender on digital technology behind the United States, Europe, and China. This is not surprising – with over 500 million internet users and as digital capabilities continue to improve, people and businesses are utilising technology for greater connection, automation, and intelligence.
Home to one of the world’s largest and fastest growing bases of digital consumers, India is transforming faster than many mature and emerging economies. The Digital India Initiative, which was launched in 2015 by the government to improve online infrastructure and increase internet accessibility has introduced a number of programs, such as Aadhaar, a biometric digital identity program spanning 1.2 billion users, and India Stack, which aims to develop payment-enabled applications using Aadhaar as the method of authentication. These types of initiative are creating huge opportunities for businesses in the development of new digital services and has significant potential value to the economy. According to a recent EY article, the digital economy is expected to be a US$80 billion market in 2030.
One observation we make here is while it is vital that businesses are making these digital inroads within the country and globally, digital adoption is still uneven across geographies and industries. For example, the number of internet users represents only around 40 per cent of the population and low income and non-urban regions still lack adequate infrastructure to support large scale digital ecosystems for services such as healthcare, finance, and retail. Given India’s size and the technological disparity, becoming truly digital requires alignment between the private and public sectors to ensure the digital ecosystems that are developed are accessible by all. This, however, is not a simple undertaking. The reality is that digital transformation within a single organisation is challenging, let alone across a nation of over a billion people. While such a complex undertaking cannot be solved in a simple article, it did get us thinking about how modern technology could be utilised to close the digital gap. Here are our thoughts:
Leverage the scalability and security of cloud technology
Cloud technology is infinitely scalable and highly agile. It can be deployed anywhere in the world at almost a moment’s notice, something that is impossible to replicate with legacy systems.
An initiative by the Reserve Bank of India (RBI) is the launch of a version of the United Payments Interface (UPI), which can be used on more than 40 different feature phones to bolster financial inclusion and enable users to utilise digital payments. Since its launch in 2017, UPI has helped improve financial inclusion at a CAGR of plus 5 per cent, and the volume of digital payments has more than tripled. The banking system is now operational 24 hours, 7 days, 12 months, anytime, anywhere in the country. According to the Prime Minister, Narendra Modi, “…digitisation has paved the way for financial inclusion breaching all the socio-economic boundaries…” as well as “brought in much needed reforms that have not just helped in bringing much transparency in banking operations but has also smoothened the system with faster operations.”
Cloud is highly secure, which is paramount for a digital world. Updates can be deployed as required, making cloud-based technology reliable and provides assurance that the most up-to-date and best practice security methods are in place. Furthermore, cloud is an excellent insulator from crisis and disaster because all your data resides on remote servers which are backed up, making recovery of data and functioning infrastructure quick and effective while still maintaining the most robust security and locally hosted data to meet any regulatory requirements.
Greater connectivity is enabling adoption of cloud technology
To enable cloud technology, the internet is, of course required, which not so long ago would have been an issue. However, the private sector has enabled us to take significant leaps forward in connectivity through campaigns such as that by Reliance Jio, which bundled virtually free smartphones with mobile plans and has spurred data consumption to grow by 152 per cent annually, meaning people are online more than ever before. Plus, part of the government’s focus on creating a digitally empowered economy under the Digital India Initiative is to ensure every citizen has access to the internet.
Accelerate growth and excellence through readily available, world class SaaS platforms
Cloud technology enables access to best in class, ready-to-use SaaS platforms, which are integral to digital transformation and the establishment of digital ecosystems. There are number of benefits of SaaS:
- Zero build costs – SaaS is off the shelf and ready to go
- No maintenance and upgrade costs – these are included as part of SaaS subscriptions
- Constant improvements – new releases and product updates are regularly rolled out as part of the SaaS product lifecycle
- Easy access to global best practices – it does not matter where the SaaS platform is developed and hosted, it can be accessed anywhere in the world meaning you are not limited to local providers if best of breed is located elsewhere in the world
- Easy integration through APIs
Drive efficiency and scale through data-driven decisions
The EY article talked to the significant economic growth that is possible with the shift to a digital way of business and life. One aspect to achieving this growth will be the ease of which organisations can capture and analyse data to create insights and inform decision-making.
Data is a key component of any digital ecosystem and has a pivotal role in influencing innovation. A critical shift is to move to a data culture, where decision making is decentralised using data that intersects people, processes, and technology. As the public and private sectors collaborate to create these critical digital ecosystems, data will need to be integrated and shared to enable robust and informed decisions to be made by all parties. This will allow for proactive, outcome-focused strategic planning that maximises technology and resource investments and ensures the establishment of future proofed ecosystems.
One only needs to look at how rural banking has transformed as an example of the power of data and technology. An article by Tata Consultancy Services talks about how in a small, rural village, a local entrepreneur provides a banking service using a laptop and point-of-sale technology leveraging Aadhaar to authenticate the identity of locals to dispense cash or take deposits. An innovative service that has transformed the lives of these people in a remote and previously inaccessible part of the country.
A great example of how data can help transform business is with BharatPe, a fintech company that provides payment acceptance solutions to merchants. The company identified an opportunity within small and medium-sized enterprises to provide finance to this group by estimating their creditworthiness using data analytics and artificial intelligence. Loans worth Rs. 3,000 crores have already been issued and have a 96% repayment rate, and the company has a goal to increase this figure to Rs. 14,000 crores by March 2023.
An example of leveraging data to benefit the economy has been the implementation of GST. Through a simpler, more effective direct tax system, the government has helped businesses more easily access the true market potential. Where previously there were complicated state and central tax frameworks, a single tax framework now enables businesses to sell across state borders, while at the same time increasing tax collection through compliance leveraging data.
Create an integrated ecosystem utilising the expertise and technology of solution partners
Anecdotally, it takes the average business five years to undergo a digital transformation. With a transformation the scale and complexity of India’s, it will likely be significantly longer. One way to expedite this process is to find expert partners that can bring dynamic, future proofed technology and are innovative to the core. Even the most successful businesses in the world have partners to help them be great where they need to.
The fact is the rest of the world is not waiting. But with the right partners who are bold and robust in their thinking, swift and agile in how they operate, and aligned culturally, they can help create a digitally transformed country which, with its incredible scale, could be truly game changing.
A digital India could create up to 65 million new jobs by 2025. As the costs of data and devices continues to decrease and government programmes help drive digital adoption, we are swiftly on track to becoming digitally advanced.
Closing the gap between industries and communities that are advancing digitally and those that are not will be paramount. As will government investment in modern infrastructure. Yes, it will be challenging. But if the private and public sector can collaborate for the greater good, digital will be a vital driver of future growth and success.
To find out how Valocity is supporting India’s digital transformation, read our case study.