When it comes to digitisation, it is ironic that countries that lag behind the most are likely to be spending more. It’s no wonder 75% of businesses consider blockchain as the key to driving digital transformation, writes Jeff Blumenfeld.
The coronavirus has brought a push into digital workflows for many professional and financial services companies. In May, facial recognition and biometric technology allowed 30 Chinese distributors to sign up to online financing in one week. The traditional process usually requires a visit to a bank and can take months.
The pandemic brought an ironic mix of more urgent business requirements, along with slower processing times to meet those requirements. A combination of restrictions on movement, remote working and the need for business to operate at high speed has pushed professional services such as institutional banking and legal work to digitise at a greater pace.
Many companies, especially those in Asia, have already been on a digital transformation journey for a while and risen to the challenge to accelerate that in the face of lockdown. However, there are parts of many digital workflows that remain paper-based.
Take, for example, e-signatures. These have been legal in China for more than a decade. However, transactions still often require a paper signature at some point. Even for countries that are ahead of the curve on their digitization journey, there are still gaps where inefficiencies creep in. Often, this is due to regulatory requirements.
Of course, the extent to which digitisation has been seen varies across different parts of the world. While China is a leader, other countries are still reliant on physical delivery of documents by couriers on bikes. The difference is stark.
Supply chains, in particular, have brought to light inefficiencies and manual ways of exchanging documents.
In many African countries, Maersk relies on fleets of motorcycles to deliver documents between ports and shipping agents. It currently takes an average of 228 hours to get the necessary documents and stamps ready for shipping a container with citrus fruits out of South Africa.
A route to digitising workflows that could work alongside regulatory requirements, and be implemented at scale and at low cost, would be the key to unlocking value for all countries.
The solution does exist.
Blockchain technology’s distributed, immutable ledger allows for complete transparency over a chain of events, and assurance that a contract has been completed verifiably and at what time.
It has the power to digitize end-to-end workflows, reducing the reliance on phone, paper and email. It’s no wonder 75% of businesses consider blockchain as the key to driving digital transformation.
When you consider the contrast between leaders in digital workflows and those that still rely on the physical exchange of documents, it’s hard to argue against the case for digitisation.
In 2019, $2 trillion was spent across the world by enterprises on digital transformation. If we were to break that spend down by country, we would no doubt see discrepancies.
There is also a cruel irony that the countries that lag behind the most are likely to be spending more. Up to 80% of IT budgets are allocated to keeping legacy systems running.
If all countries were ‘levelled up’ and digitised their workflows to achieve the same level of efficiency and security, the benefits would be immense.
Jeff Blumenfeld is Executive Vice President at MonetaGo.
The views and opinions expressed in this Viewpoint article are solely those of the author(s) and does not reflect the views and opinions of Fintech Bulletin.