What Does It Mean To Be Truly Digital? A Global Crisis Exposes The Cracks Economies hitherto almost entirely reliant on a single commodity are now boasting burgeoning and increasingly thriving tech ecosystems. But in many ways, we are still behind the curve.
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The ongoing COVID-19 outbreak has induced a global state of self-isolation and quarantine. Some might say the results of families confined together for weeks on end have been predictable. In China, the epicenter of the pandemic, people are finally returning to work. This includes the marriage registration agency staffers, who have reported a surge in divorce filings since March across more than a dozen cities. Across the Atlantic, similar scenes of trouble in paradise, with New York lawyer phonelines flooded with divorce enquiries. American courts are bracing for an avalanche of filings. Estonia is reporting about 10 divorces registered per day, with the Tallinn Vital Statistics Office having to call around to request these are postponed.
They say in Estonia that marriage and divorce, along with the transfer of property, are the only three interactions with the state that require a physical presence. In other words, Estonia is a country so digital that every single aspect of its citizens lives –except those three– can be run from their smartphones. From voting to paying taxes, medical prescriptions to securing residency, there is near no aspect of life in Estonia that cannot be run online. Estonians have all their data stored on a secure, single piece of ID, from health records to tax records. In light of the pandemic, it may be only a matter of time before Estonia's nuptial digital gap is filled too.
In this way, the ongoing outbreak is putting to the test the very notion of what it means for a society to be truly digital. On the one hand, from buying groceries on an app to holding work meetings online, quarantine has seen people around the world relying on technology for their day-to-day activities to an extent previously not thought possible. But on the other hand, national technological deficiencies are being brought to light. We live in the digital era, but the global pandemic is posing the question: what does it mean to be truly digital?
The answer is disarmingly simple. If a country's citizens cannot run every single aspect of their lives from a smartphone, then they cannot claim to be living in a truly digital society. Estonia (with the three or so exceptions mentioned above) is. The question is an important one for the MENA region, where countries have been racing to diversify their hitherto hydrocarbon economies in line with rapid global digitalization. Considerable sums have been invested in growing tech and startup ecosystems from scratch, complete with world-class accelerators, 5G infrastructure, and even burgeoning VC communities. But is this what it takes to make a society fully digital?
The answer bears repeating: no. If a citizen cannot run every single aspect of her life from her smartphone, then she is not living in a truly digital society. Take the Kingdom of Bahrain, the first GCC member to begin diversification efforts, and arguably the most agile and forward-looking of the Gulf economies. The tiny island nation has focused on a strategy of savvy public-private partnerships and bold regulation to achieve a level of digital hyper-connectedness enviable by global, let alone regional, standards. In recent years, the Kingdom has made a concerted government-wide shift to the cloud, partnered with AWS to launch the region's first hyper-scale data center, introduced a new data protection law, mandated that all its banks provide open banking services, and rolled out nationwide commercial 5G.
This digital connectedness has allowed Bahrain to react to the virus quicker than most to minimize disruption from the pandemic. The Kingdom's online education portal, for example, has allowed for students to continue their studies from home following the hasty closure of schools and universities. And yet, despite all this, Bahrain remains very much a paper-based economy. Credit cards are still not widely accepted in major petrol stations, dividend checks are still collected physically, past due credit solutions (PDCS) are still the main method of contractual agreements. Why, in an age of AliPay, Wechat, and ApplePay , should it have been necessary for the government to order all the Kingdom's foreign exchange companies to sterilize their bank notes? It is right that the Kingdom is approaching the pandemic with an abundance of caution, but had electronic payments seen faster adoption, the government's attention might be better focused elsewhere.
Bahrain is not alone in the region. Whilst the Gulf region might boast some of the fastest mobile internet speeds in the world, for example, what can truly be done on those mobiles, is limited. This is one area where the region lags, and will need to leapfrog. This is particularly true for the region's banking sector. Imagine a world of 5G, a world where users don't even have to make a choice to opt in or out. A world where your face itself allows for gates to open, for transactions to be processed and where your voice can call an uber, just by saying the word. Are we really there yet?
Fostering this kind of truly digital society is what we should be driving towards across the MENA, and what we are attempting to start with our open banking drive in Bahrain. Citizens in Estonia enjoy ownership of their own data, which they can pull up at any time on their phones, whether to access their health records, or to quickly make more informed financial decisions. In the MENA region, banks and governments sit on mountains of data, that sadly remains untapped. We need to look to countries like Estonia to start moving our legacy processes to more automated processes. But this will require a mindset shift that has to be expedited.
The enormous strides that MENA has taken over the past two decades alone should not be understated. Economies hitherto almost entirely reliant on a single commodity are now boasting burgeoning and increasingly thriving tech ecosystems. But in many ways, we are still behind the curve. Thanks to government support programs, the region is well on its way to becoming a startup attraction. But it will be some time yet before it can claim to be truly digital. It took a global crisis to reveal the gaps in our systems. The onus is on both the governments and the private sector to work together now, to make this region, truly digital.