Scientists in Hawaii have been monitoring sharks by tagging their fins with sensors. It is, as one wag noted, one of the most promising uses of what you’d call “fintech” – but it isn’t the true meaning of the term.
Financial technology – FinTech for short – is a booming industry, which many Asian governments are funding. Singapore, for example, has announced a dedicated office to invest in new innovations, from payment apps to virtual currencies.
But how can FinTech be used in government itself? GovInsider has rounded up the best projects on Earth – with not a single predator in sight.
1. Estonian Healthcare Records
Estonia is one of the most digitally-advanced governments in the world, and is using Blockchain to secure its healthcare records.
Blockchain is a digital ledger that’s very difficult to hack because it is stored on thousands of computers worldwide. Any change must be logged with all of those computers, and would be instantly noticeable.
“It enables us to react to any incidents immediately, before potentially larger-scale damages can occur”, said Margus Auväärt, Head of the Estonian government’s eHealth Foundation.
The technology was originally developed to track payments in Bitcoin – a digital currency – but has since spun off to become a useful way of recording other records.
Estonia already uses Blockchain to protect its tax and businesses registration systems, and the Estonian Information Systems Authority intends to expand its use.
2. Biometric payments in Japan
Japan this week announced plans to let tourists pay for goods and services using their fingerprints. This would mean they no longer have to check into hotels with their passports, and also allows them to claim tax rebates.
The government intends to track this data to monitor tourist spending patterns and create policies to stimulate further growth.
This week it rolled out a trial of 300 payment systems, but plans to have country-wide payments in time for the 2020 Olympics.
Walt Disney World already uses this payment technology, personalising visitor experiences by combining it with seat reservations and dietary requirements at restaurants.
3. European energy payments
This one isn’t operational, but the European Union is investigating whether blockchain can be used to help consumers save money on their energy bills.
Currently, if someone wants a cheaper rate they must close their existing contract and then open a new contract with another supplier.
This can become very complicated, discouraging busy consumers from saving money, and making the energy market less competitive.
The UK’s Government Chief Scientist believes that “using distributed ledgers to record energy contracts online would greatly simplify these operations. It would allow consumers to finalise the transition from one supplier to another with just a few clicks on a computer or mobile device”.
In a report on the potential of Blockchain in Government, he also said that the technology would save energy suppliers money, reducing their administration costs.
4. Mobile Banking, Africa
The UK Chief Scientist’s report noted that Africa is very advanced in trialling of new financial technologies. This is because developing countries need to develop new infrastructure quickly to assist their citizens, and are experimenting more than established nations.
The most advanced African FinTech scheme is Kenya’s mobile banking operation – M-Pesa. This was launched in 2007 and allows people to transfer money using text messages. It means that people don’t need traditional bank accounts, allowing for distribution of aid during emergencies and microfinance payments to the poorest in society.
M-Pesa was launched in Kenya by the British Government’s Aid agency. There is a similar system in The Philippines, called Smart.
What can we learn from these schemes?
The UK’s Chief Scientist set out views on why some countries are leaping ahead in these areas. “Advancing digital nations” have common characteristics, he believes:
• A digitally-informed leadership
• An empowered, focused government department for all national digital transformation, which is internationally minded and collaborates closely with all industry sectors
• A living, collaborative national plan, which is industry-led with government investment
• Technologically aware, qualified and experienced senior political officials in every government organisation
• Engineers and digital business leaders as elected politicians
Plenty of Asian countries have some of these characteristics, and some are even considering FinTech trials in government.
These nations swim outside of the shoal. Their fortunes are likely to rise considerably.