COVID-19 pandemic has forced the world to rethink most of the processes and procedures which has been in practice for ages. Many organizations continued following the same old methods for ages simply because the change was painful. They all knew that there are better ways available but often delayed adopting them. Recent pandemic gave no other choice for these people and organizations but to change. As a result, Srilanka is also taking action. Let’s see Srilanka’s 5 recent steps towards digitization.
The project to issue an e-NIC to all the citizens of Srilanka was initiated in the year 2012. However, the implementation of this project was delayed for years due to various reasons. This project came on to surface again in May 2020 with the instructions given by the president to speedup the implementation. It is proposed to issue an E-NIC to all Srilankan citizens above the age of 15. This smart NIC will be connected to a digital database which can be accessed by many government organizations. (More)
- All the information required by various government departments will be saved in a digital database and it will be linked to the smart NIC of each individual.
- This can be used when obtaining passport, driving license, pension, welfare benefits, paying tax, registering for EPF etc.
- Individual citizens do not have to provide proof documents over and over again when dealing with government agencies. The agencies can access the required information linked to the smart NIC.
- Can save healthcare information as well in the said digital database, so that the hospitals can have easy access to the medical history of each individual.
- Cyber security can be a great concern as the proposed centralized database can be a vulnerable target.
- A breach into such database can become a matter of national security.
Central Bank of Srilanka (CBSL) to implement blockchain based Know Your Customer (KYC) proof concept.
This is another iconic step taken by the Srilankan government in July 2020 to improve the digital financial infrastructure of the country. KYC form is a compulsory document to be obtained by any financial institution in the country from their customers when providing financial services. Implementing blockchain technology to maintain the KYC data can eliminate repetition of gathering and storing KYC data by individual financial institution. The public key issued by the central bank to individuals will be sufficient for financial institutions to verify the KYC data. (More)
CBSL has already entered in to agreements with local and foreign parties to develop the infrastructure.
- Convenient and cost effective for financial institutions as they do not have to maintain KYC databases and secure that information.
- Can save time by eliminating the KYC verification process.
- Individuals will not have to provide personal information and proof documents to financial institutions when they obtaining financial services.
- Customers can own their own personal information.
- Technical readiness and technical knowhow can be a challenge when implementing the program.
Srilanka’s South Asia Gateway Terminals (SAGT) joins global blockchain freight platform.
SAGT is the first privately built terminal in Colombo port and they handle over two million containers a year. In July 2020, SAGT joined the global blockchain freight platform by partnering with Tradelence, a global blockchain driven information sharing platform. This allow SAGT to be part of a global supply chain ecosystem including ports, shippers, shipping lines, custom authorities and also banks.
- SAGT will be able to digitize its trade process and come out of paper-based documentation entirely.
- Will streamline the data inflow from global supply chain ecosystem.
- SAGT will be able to easily record information pertaining to all intermediaries and stakeholders involved in the supply chain digitally.
- Improve transparency in the container flow.
- Improve operation efficiency in the terminal by eliminating the lag time of sharing in transmitting information between supply chain intermediaries.
- Improve data security and accuracy as blockchain technology is immutable by design.
- Collaboration with all the stakeholders in the supply chain can be a challenge. All the parties may not be in the same page when it comes to technology adoption.
Digitization of Colombo Stock Exchange (CSE)
CSE is the equity trading platform of Srilanka which is governed by the Securities and Exchange Commission of Srilanka (SEC). CSE was closed for over a month from 20th March 2020 due to Covid-19 pandemic and the locked down of the country. This was mainly because the core operations of the platform being unable to run remotely. However, in June 2020 CSE with the direction of SEC has taken steps to digitize the platform.
With this initiative, transaction confirmations such as sold notes, bought notes and CDS statements which were hard documents sent through post, have been converted to digital formats and distributed via email. Dividend payments will be done as direct bank transfers instead of posting cheques. Customers can open CDS accounts online without visiting stock broker firms physically. Listed entities are allowed to circulate the annual reports as soft copies. (More)
- Increase efficiency of trading activities.
- Saves massive amounts of cost for both listed entities and customers by transferring paper-based communications to digital. This is also environmentally friendly.
- Increase participation of customers from around the country. Anyone with an internet connection and a smart phone can participate in stock market.
- Stock market can operate remotely, irrespective of staff being physically present in the office or not.
- Eliminate the lag time of realizing dividend income for customers. It is real time with direct bank transfers.
- Successful implementation of digitization requires support and collaboration from all the investors. Most investors are reluctant or less responsive to the proposed changes.
HatchX Fintech startup support platform
Central Bank of Srilanka came up with new regulations to empower and encourage FINTECH startups in the country. With that support, HatchX was launched in April 2020 as the first FINTECH accelerator program. HatchX program will be a support system and provide mentoring to a selected set of local FINTECH startups to establish their businesses to provide modern financial services to the country as well as to the South Asian Region.
- Encourage entrepreneurs to enter into FINTECH industry.
- FINTECH startups can reach out HatchX to get support, finance and guidance.
- This helps the country to capture the opportunities in modern most sort after financial services industry.
- Availability of local technical knowhow can be a challenge in implementing the program.
Above mentioned Srilanka’s recent 5 steps toward digitization can unlock great potential for the country in the future. In a world moving extremely fast towards digitization, Srilanka cannot be left behind. These programs and initiatives can take Srilanka forward in the journey of becoming a digital nation. Eagerly waiting to see all these programs being fully rolled out.