ICT SECTOR
Compiled by Yamini Sequeira
TIME TO HARNESS INGENUITY
Viraj Mudalige maps an integrated digital economic strategy for crisis times
Q: How has the ICT sector been impacted by the COVID-19 pandemic?
A: The ICT sector was severely impacted by the pandemic due to the unprecedented speed at which it took the country by surprise and disrupted how businesses functioned.
COVID-19 demanded that ICT organisations change course, embrace new social norms and use technology in novel ways to stay relevant while navigating towards the ‘new normal.’
Amidst this crisis however, Sri Lanka’s ICT sector showed resilience and took versatile measures to ensure the safety of its community while activating robust business continuity plans. This assured customers in the context of comfort and the ability to cope with the challenges posed by the pandemic.
And the adoption of collaborative applications and cloud services, followed by technologies such as AI, analytics and IoT, have had a positive impact.
Q: How do you see the sector progressing in 2022/23?
A: Sri Lanka’s ICT sector – together with its sub-sectors including IT/ITES and telecommunications – was projected to generate US$ 1.8 billion in revenue by the end of this year. There were plans to transform it into a three billion dollar industry by 2024 through export revenue, entrepreneurship, innovation and digital adoption, as well as the creation of 300,000 direct jobs and 1,000 startups in the country.
However, the prevailing economic crisis is sending negative signals to our stakeholders across the world. Furthermore, the lack of a cohesive plan by the government to resolve the ongoing crisis is beginning to affect the confidence of foreign investors.
Moreover, we are witnessing an acceleration of the brain drain with many skilled ICT professionals moving out of the country. This is a considerable loss to the sector.
Q: Could you provide a snapshot of existing, new and emerging fintech service trends?
A: Embedded finance has been a growing trend over the past year or so. It is positioned to grow further as numerous banks look to become service providers to non-bank and non-financial institutions that aim to deliver a customer experience or service proposition.
I also believe that due to the growing prioritisation of ESG (environmental, social and governance), which is taking place more broadly, there will likely be an increasing interest in fintech with ESG capabilities – including organisations focussing on climate change, decarbonisation and the circular economy.
In terms of existing trends, blockchain, IOT and robotic process automation (RPA) will play a crucial role in propelling fintech to greater heights.
Q: How empowered are Sri Lankans in terms of engaging in online shopping using payment gateways?
A: The payment ecosystem has also been evolving rapidly in the last few years with a surge in the move towards digital payment options.
This continuous growth in the global payment ecosystem has led financial institutions, fintech companies and startups to invent new and innovative mechanisms to improve the way Sri Lankans use money in society.
Online payment gateways through leading local banks have increased greatly and taken over the COD option. Leading banks in the country had moved to the digital sphere before the pandemic; it was becoming necessary and the situation only fast tracked the digitalisation that was already underway.
Q: How is the forex shortage impacting online financial transactions?
A: Online transactions do take place but these are limited by foreign exchange controls. Everything from recurring payments such as fees and subscriptions to one-off transactions for products or services face extensive restrictions.
Extraordinary measures such as splitting payments across multiple accounts, cards or more informal systems are being taken to make simple payments.
Q: Are plans to turn Sri Lanka into an ICT hub still alive?
A: Yes, they are. The government has identified information communications technology as a thrust sector and prioritised its enhancement to greater heights.
In our quest to increase export and foreign earnings from the technology industry and related knowledge services, we aim to build a digital economy that’s driven by tech entrepreneurs.
Stakeholders such as the Ministry of Technology and the Information and Communication Technology Agency of Sri Lanka (ICTA) are working on an ambitious plan with industry leaders and the relevant regulatory entities to bridge the country’s digital divide, create an inclusive digital ecosystem and make Sri Lanka an IT hub in the region.
Q: Are there any roadblocks that need to be cleared to achieve greater digitalisation in Sri Lanka?
A: Digital interventions have not resulted in system-wide changes or brought about scalable effects due to the lack of comprehensive strategies. Therefore, Sri Lanka’s digital economy strategy needs to look at utilising existing programmes and all relevant partners in the ecosystem.
At an unprecedented time such as this however, the country must focus its attention on harnessing the powers of innovation and digital technologies, and the ingenuity of young people, to create a committed path to achieving its development targets.
