Empowering People Through Digitalization And Trust

Ajay Bhalla, President for Cyber & Intelligence at Mastercard, explains the relevance of the company’s latest Digital Intelligence Index and what the data reveals about global digital economies and trust.

What is the Digital Intelligence Index and why is it important to track?

The Digital Intelligence Index is the result of a collaboration between Mastercard and The Fletcher School at Tufts University. It charts the progress economies have made in advancing digitalization, fostering trust and integrating connectivity into the lives of billions.

As digital innovation spreads, people, countries and continents have become wealthier, more developed and increasingly resilient to economic shocks. But the benefits have not reached everyone yet, nor are the gains made in some places guaranteed to last. The Digital Intelligence Index is crucial for informing interventions—by government, business and the third sector—to foster inclusive and trustworthy digital economies around the world.

What are the two components of the index and how are they measured?

The index sheds insight on two of the most important indicators of global economic growth and prosperity: Digital Evolution and Digital Trust.

The Digital Evolution scorecard measures 160 indicators in 90 economies across four key pillars: institutional environment, demand conditions, supply conditions, and the capacity for innovation and change. It captures an economy’s state and historical momentum from the physical past to the digital present.

The Digital Trust scorecard is the bridge that connects an economy’s journey from the digital present to an intelligent and inclusive digital future. It measures 198 indicators in 42 of the index’s economies across four key pillars: behavior, attitudes, environment, and experience.

What are this year’s findings?

The most dynamic digital economies—including the U.S., South Korea, Taiwan, the U.A.E. and Germany—significantly outperformed the OECD GDP growth rate in Q2 2020 amidst the global lockdown. During this period, digital technologies held societies and their economies together across the world. Knowledge and informationbased parts of the economy helped societies to function effectively, despite widespread social distancing measures. These economies feature a combination of high levels of available talent, active R&D collaboration between industry and academia, and a strong record of creating and bringing digital products and services into the mainstream.

Many mature digital economies— such as New Zealand, the Netherlands, Canada and those in the Nordics—showed advanced adoption but slowing momentum. They are trading off speed for sustainability by increasingly investing in policies that promote digital inclusion and strengthen institutional guardrails, distributing the gains from the digital economy across society.

Meanwhile, many emerging and developing economies—such as Kenya, Uruguay and Chile— demonstrate strong and growing

digital demand, despite lower levels of advancement. Governments here need to do more to nurture their digital economies and instill trust in their emerging digital ecosystems.

What do these findings mean for economies facing the challenges of a global pandemic and postpandemic future?

There are different challenges for different economies across this year’s index, but globally there is an urgency to ensure that the benefits of digitalization are evenly spread across society.

For many emerging economies, there is a pressing need for governments to meet growing demand for digitalization with improved supply conditions. But, for the wider global economy, the focus is on entering an “after access” phase. Here investments in digital inclusion and trust are proving greater determinants of digital competitiveness. This includes factors such as the quality of access, facilitation of effective use of digital technologies, accountable institutions, robust data governance policies and fostering trust.

Which economies fared the best and the worst on the Digital Evolution scorecard?

Economies such as the U.S., Singapore, South Korea, Taiwan, the U.A.E. and Germany proved to be highly digitally advanced and exhibit high momentum. They are leaders in driving innovation, building on their existing advantages in efficient and effective ways. Despite infrastructure gaps in many emerging economies, such as Latin America and SubSaharan Africa, their younger demographics display enthusiasm for a digital future, with increased use of social media and mobile payments.

Which economies fared the best and the worst on the Digital Trust scorecard?

Mature approaches to digitalization and related policymaking are established in Sweden, the Netherlands and Denmark, including measures around privacy, security and accountability that strengthen the trust environment. Citizens in these economies tend to have more optimistic attitudes around the future of digitalization.

Where economies—such as the U.S., Hong Kong, Taiwan, South Korea and Singapore—deliver the holy grail of advanced infrastructure, broad access and unparalleled interaction, seamless experience is matched by high levels of engagement.

Economies such as Brazil, Colombia and Mexico are beginning to build momentum on behavior scores, demonstrating substantial engagement on social media and other new technologies, while the likes of China, Indonesia and Vietnam have increasingly favorable attitudes about their digital future, buoyed by rapidly expanding digital adoption and opportunity.

How has Mastercard helped to build trust in the digital economy?

At Mastercard, we are passionate about building trust in the digital economy. Trust is our business. We’ve maintained trust by ensuring the consumer continues to be at the heart of our work as we build products and services to make their lives more convenient, their interactions more seamless and, at every single stage, more 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.

Why is this trust so important?

Without trust, you can’t do business. More so now than perhaps at any other point in history. Today, the evolving ecosystem requires us to shift from securing transactions to protecting trust in every interaction— across entire cyber environments, during the consumer’s digital transaction journey and across multiple payment flows.

In short, 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 their information will be safe.

At Mastercard, we are passionate about building trust in the digital economy. Trust is our business. We’ve maintained trust by ensuring the consumer continues to be at the heart of our work as we build products and services to make their lives more convenient, their interactions more seamless and, at every single stage, more secure.