2020 has dealt the world a difficult hand. No person, place or organization hasn’t been impacted in some way by the pandemic.
And yet, despite the trauma and challenge, we have seen the very best of humanity too. People and communities have shown their resilience in the face of tightening social restrictions – whether volunteering in communities or supporting small business by buying local. Businesses have stepped up too, innovating to meet rapidly changing needs and supporting their employees.
At Mastercard, we are passionate about enabling financial inclusion and building trust in the digital economy. One way that we do this is by getting people and businesses online – earlier this year, we set ourselves the goal of connecting 1 billion people and 50 million micro and small businesses to the digital economy by 2025. The facts are clear: as digital innovation spreads, economies have been able to develop faster, create generational wealth and become more resilient to economic shocks. This is a goal worth striving for.
Digital Intelligence Index 2020
It is against this backdrop that Mastercard, alongside The Fletcher School at Tufts University, has this week released the latest edition of our Digital Intelligence Index. The report charts the progress economies have made in advancing digitalization, fostering trust and integrating connectivity into the lives of billions.
“With new forms of e-commerce and mobile payments emerging in all corners of the globe, consumers need to understand and trust that they will work, and that their information will be safe”
Building upon earlier editions in 2014 and 2017, this year’s index paints a picture of global digital development, sheds light on key factors driving change and momentum, and unpacks what this means for economies facing the challenges of a global pandemic and post-pandemic recovery.
What do the findings tell us?
The index highlights that economies that invested early in digitalization and worked to foster trust in their digital economies have proven most resilient to the turmoil created by the pandemic – 11 in 13 of the most advanced and dynamic digital economies in the world outperformed the average OECD growth rate in Q2 2020 (year on year), during the peak of the first global lockdown.
Advanced digital economies are entering an ‘after access’ phase, where quality of access, accountable institutions and policy making, and fostering trust are becoming greater determinants of digital competitiveness and sustainability. With better connectivity, the options for value-added digital services increases exponentially – in payments and elsewhere.
Recognizing this, some political institutions are already taking decisive action. A recent example is the European Union’s Shaping Europe’s Digital Future strategy, which pledges to invest in the digital competencies of all Europeans, enable a vibrant community of fast-growing start-ups and empower citizens with better control over their data.
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Trust sits at the heart of future success
At the core of this shift is a recognition of the need to build trust in the digital economy. Trust is the key factor in any relationship or transaction and economies can only go so far without it. With new forms of e-commerce and mobile payments emerging in all corners of the globe, consumers need to understand and trust that they will work, and that their information will be safe.
We’ve maintained trust at Mastercard by ensuring that the consumer continues to be at the heart of our work. It informs how we build and deliver products and services to make our customers’ lives more convenient, and their interactions more seamless and secure. We have led the way on new standards, such as EMV, QR and tokenization, and solutions that enhance secure payment experiences. Whether through innovations such as biometrics, contactless or digital identity, we are committed to retaining the trust and confidence of consumers.
Helping developing economies turn the corner
The index also highlights worrying challenges in less digitally advanced economies; persisting infrastructure gaps and unstable institutional environments mean that only one in five people in developing economies are online. This imbalance must be addressed.
One way of doing this is to facilitate hotspots of potential. In many emerging economies, younger generations are driving digitalization. Take Nigeria as an example; its median age is just over 18 and by 2025, smartphone users are expected to grow from 25 million to more than 140 million. Capitalizing on this requires dedicated action and progressive polices to improve infrastructure and promote digital entrepreneurship, R&D and foreign direct investment.
The argument for embarking on this journey has never been stronger. The world needs dynamic, inclusive and trusted digital societies. Waiting is no longer an option. The hard work must start today.
Ajay Bhalla is president of Cyber & Intelligence at Mastercard
This article is part of a project exploring technology in financial services in partnership with Mastercard. Explore the series.