DPI eases financial inclusion, benefits delivery from India to Finland

As countries continue to roll out their digital transformation programs, conversations about the critical role of digital public infrastructure (DPI) are taking an increasingly preponderant place.

This is because as experts argue, DPI are the inevitable building blocks on which modern public and private sector service delivery systems can be established, not only to make life easier for people but also to spur up economic growth and shared prosperity.

In the latest of such arguments, the Gates Foundation Director of Digital Public Infrastructure, Sanjay Jane, demonstrates that DPI are as important as physical infrastructure like roads and bridges that help to connect people and build communities.

In his opinion piece, the writer contends that DPI have enormous benefits if implemented in a safe, secure and interoperable manner, as seen in countries like India and Estonia.

He explains how the building of DPI in India is helping not only to connect individuals, business and governments, but also driving financial inclusion by expanding and facilitating access to financial services to the extent that people are able to get access to finances using just the Aadhaar digital ID and from the comfort of their homes.

Apart from the ability to construct inclusive economies and trigger economic growth and innovation, well-designed DPI can also curb inequality by providing universal access to essential services like healthcare and education, especially for marginalized groups which are often excluded from traditional service delivery processes either due to procedural shortcomings or administrative red tape.

He notes that just like India where DPI has changed the country’s public finance landscape, other governments can leverage DPI to deliver services more seamlessly and transparently, citing instances where digital identity systems can be used to ensure that social protection benefits and programs reach the intended recipients without leakages or corruption along the service delivery chain.

Recently, India’s Union minister hailed the gains of Prime Minister Modi’s Direct Cash Transfer program launched in 2013 which has gone a long way in blocking leakages. In a policy paper that presents a quantitative assessment of the initiative, it is revealed that India has been able to save more than 3.48 lakh crore rupees (approximately US$40 billion) in the past ten years by avoiding social benefits leakages, while increasing outreach by sixteen fold, as reported by News On Air.

The numerous benefits of DPI notwithstanding, Jane mentions that DPI come with several challenges and risks which must be effectively addressed. Among the issues he cites are concerns about data privacy and security, inequitable access, and lack of interoperability.

He is of the view that to get the DPI ecosystem that can work best, there is need for a multiplicity of efforts, paramount among which is collaboration between government and private sector stakeholders. He mentions the example of Estonia’s digital government system which reflects a well-rolled out DPI system that now brings tremendous gains for the country, facilitating the digitization of almost 100 percent of all public services.

Digital ID as facilitator of public sector benefits

There is no gainsaying that digital ID is one of the three major components of DPI. Increasingly, it has become central to the seamless deployment of public benefit programs in several countries around the world.

As detailed in a guide by Digital Gov Hub tiled “Digital ID 101: An introduction to digital identity for public benefits”, digital ID brings many benefits to the public sector service delivery architecture.

From improving accessibility and efficiency, to risk and error reduction, the report states that digital ID has proven to be the DPI component which can guarantee access to public services 24/7, enhance inclusion, save cost and plug leakages. It cites country examples like India and Estonia where their digital ID systems have proven highly successful, facilitating access to subsidies, pensions, and social protection grants to millions of citizens.

The document goes ahead to offer recommendations on how to implement proper digital ID programs. It notes that in addition to designing digital ID systems with the needs of beneficiaries in mind, governments must take the necessary steps to ensure inclusive participation, and to put in place workable legal and regulatory frameworks which can guarantee the protection of user privacy, data security, and misuse of digital IDs.

The Digital Gov Hub publication is the first part of a suite of voluntary resources, and is meant to enable members of the public have can better grasp of some technical details of digital IDs and how crucial they are in ensuring seamless delivery of social benefits to the public.

Finland uses DPI to streamline governance

Apart from countries like India and Estonia which are making great strides in DPI for efficient service delivery, a country like Finland is also part of the fray.  A report on Channels TV explores the Northern European country’s approach to bringing efficiency to governance and inclusion to identity through a solid DPI ecosystem.

The report depicts Finland’s social insurance institution (Kela) as an efficient system where DPI such as digital ID is facilitating access to social protection and other services.

Reetta Tilvis, Kela chief product owner, explains how the digitization of the system has ensured that every eligible citizen gets their benefits, be they citizens at home or some of those who reside out of the country.

This, the official says, is done through a digital wallet and digital credentials system anchored on a “self-managed identity model.”

“Our society is quite thoroughly digitalized, and people expect that they can get their administrative things done online, and don’t expect to be forced to go to offices, or even maybe make phone calls,” says Tilvis.

Article Topics

digital government  |  digital ID  |  digital public infrastructure  |  Estonia  |  Finland  |  India  |  social protection