In an era of rapid technological advancement and digital transformation, the emergence of new concepts is often met with scepticism. One such term that’s recently gained prominence is Digital Public Infrastructure (DPI), with many asking: is this a useful category or simply a captivating diversion, asks David Porteous, Founder and CEO at Integral: Governance Solutions.
While the answer to that question may not be immediately apparent, a deeper exploration of DPI’s significance and implications for digital finance practitioners reveals its potential to reshape the financial landscape and foster a more inclusive digital economy.
According to the G20 working definition, DPI, at its core, can be perceived as a multidimensional framework that encompasses shared digital systems designed to enable interoperability, inclusivity, security, and adherence to fundamental human rights. India’s leadership in emphasising digital public infrastructure within the G20 framework underscores its growing importance on the global stage.
DPI comprises three foundational layers—identification, payment infrastructure, and data exchange—which, when integrated, form the bedrock for innovative use cases and services. As a working definition, DPI represents a compelling narrative, but it’s essential to recognise that DPI’s emergent nature allows room for growth, change, and innovation, perhaps similar to the trajectory of the now well-established ESG (Environmental, Social, and Governance) framework which has become clearer and more established over time.
The implications of DPI extend beyond semantics. DPI serves as a lens that reframes how we approach digital finance, emphasising commonalities across diverse elements like payment systems, identification protocols, and data sharing mechanisms. This shift in perspective promotes a holistic view of data as a valuable asset that transcends siloed sectors. Rather than focusing solely on data protection and privacy, DPI directs our attention toward harnessing data for positive development outcomes.
One of the striking potential applications of DPI lies in the realm of digital finance. Traditional regulatory frameworks, often fragmented and jurisdiction-specific, have struggled to keep pace with the dynamic nature of digital financial services. DPI offers the prospect of a more cohesive regulatory approach, fostering a harmonised ecosystem that nurtures innovation while safeguarding against potential abuses. By aligning external and internal forms of regulation, DPI can mitigate risks associated with unauthorised data use and inefficient, costly infrastructure.
The concept of a Digital Public Good, distinct from DPI, adds another layer of nuance to the discussion. A Digital Public Good is defined by its open-source nature and alignment with Sustainable Development Goals (SDGs). While DPI can utilise Digital Public Goods, it’s not constrained by them, exemplifying the flexibility and adaptability inherent in the DPI framework. This subtle distinction highlights the potential for hybrid models that leverage open-source components while accommodating diverse contexts and needs.
As digital finance practitioners navigate the uncharted territory of DPI, the notion of governance takes centre stage. Effective DPI governance necessitates a dual approach encompassing external regulation and internal oversight of DPI operators. In the digital finance realm, where risks range from unauthorised data usage to the proliferation of ineffective infrastructure, a balanced governance framework becomes paramount. Striking a delicate balance between external regulations driven by state entities and internal regulations upheld by DPI operators can help prevent misuse and wasteful infrastructure.
DPI holds out a promising vision for the future of digital finance. It’s a clarion call to transcend sectoral silos and collaborate across industries to harness the power of data for positive economic and social outcomes. Like the ESG framework, which ignited transformative conversations around sustainability, DPI has the potential to galvanise stakeholders, driving them toward a shared vision of a thriving, inclusive, and innovative digital economy. As we unravel the complexities of DPI, we must remain open to iterative definitions and interpretations, recognising that the true value lies not in the label itself, but in the transformative potential it holds to reshape the digital finance landscape for the better.
About: Digital Frontiers
Established in 2015, Digital Frontiers (DF) is a not-for-profit capacity-building specialist headquartered in Africa and focused on building human capacity aligned with achieving the U.N. Sustainable Development Goals. To date, DF has built and implemented comprehensive capacity-building programmes that support the acceleration of global initiatives in digital financial services and financial inclusion, gender equality, digital health, and inclusive digital economies.