The digital revolution is picking up pace as importers and exporters demand more efficiency. Chito Santiago of The Asset talked to Deutsche Bank trade experts in Mumbai about how banks are responding
Compared with the other advanced economies in Asia, India started late in its digital journey. Hong Kong commenced its digital drive in 1997 with the launching of Octopus card, while South Korea launched a prepaid public transportation card called Upass in 1996. The NFC popularised digitisation in Japan in 2001, while China started using the QR (Quick Response) code in 2011.
India’s digital awareness evolve from 2014 when the government laid down a huge fundamental digital infrastructure under which the country’s 1.2 billion population were given their digital identity called Aadhaar card India. This digital identity, which is a 12-digit unique identity number based on biometric and demographic data, was connected to their mobile phone, which in turn is connected to their bank account.
The second fundamental shift happened in 2016 when the government created what it called the United Payment Interface (UPI), an instant real-time payment system that facilitates inter-bank transactions. “This was a digital backbone where all trade and bank-to-bank transactions were put onto automated platform,” says Anand Jha, head of trade finance in India at Deutsche Bank.
He adds: “This digital revolution, which we call the fourth industrial revolution, is picking up pace in India. It is heartening for all the constituents of trade finance, including exporters, importers and regulators. We are optimistic that this the right direction to go and will be an advantage to all stakeholders.”