Originally published in Advancing ASEAN in the Digital Age Book, 14 November 2017.
Digitalization to Enhance ASEAN Economic Growth
Today technology plays a crucial role in advancing countries around the globe as they digitalize their industries to support their economic growth. There are a number of advantages with digitalization particularly in the financial and banking sectors. If we think about the financial sector in the digital age, we may think about cashless systems. Developing cashless systems may bring a lot of benefits for people and it may change the way people shop as they only have to use their mobile phone or any digital devices to make payments for their desired products and services. To this matter, various business sectors will transition to cashless systems for payment, for the comfort and convenience of both customers and business owners. People are also likely to save more time as, nowadays, most banks tend to have payment services for public utility bills in order to attract more customers. Also bank services such as loans and deposits transactions can be made through mobile or internet banking. In the near future, I foresee that people will use their mobile phone or digital devices to do everything – shopping, making tax, rental and loan payments, borrowing, making deposits, and many others. These will totally change our regional payment systems.
In the banking sector, digitalization requires huge investments and high security so it may also affect employment in the sector. The more digitalized systems we invest in, the lower the number of bank or financial services staff are needed and at the same time banking service units or financial institutions may also decline since people will change their payment behaviors. We can see around the globe, particularly in USA when a few years ago many big banks halved their bank service units and bank branches as well as the number of bank staff. This potentially affects employment rate, affecting not only the banking sector but also other sectors as well.
Digitalization may bring both advantages and disadvantages to our growing economy, however, moving forward into the digital age may bring a lot of advantages rather than disadvantages and if we don’t follow the movement of this trend, our businesses may fail in number of ways. The important thing that we should consider during this transition into digitalization is how we can adapt our business operations. It is very important for every government in ASEAN to supervise and manage properly potential issues such as the unemployment rate and internet security that may occur during the transition to the digital era. With close and proper supervision and management from ASEAN governments, these issues may be mitigated but if we don’t follow this digital trend, we may face a lot of obstacles in our business operations.
This digital trend of cashless systems may remove the currency boundary among countries, bringing all nations, particularly ASEAN countries, into a united region using one single digital currency.
In the banking and financial sectors, meetings between bank clients or bank staff have been made much more convenient in the digital era. Clients can enjoy a variety of benefits from the improved technology such as being able to meet bank staff directly via video or conference calls and benefiting from deposit and loan payments through the Internet in real time. Financial transactions through mobile banking and internet banking are more likely to enhance effective and efficient business operations for users. Personally, I would love to bring cashless systems into our ASEAN community or use the same digital currency for financial transactions in ASEAN or develop a global digital currency for conducting any transaction around the world. This digital trend of cashless systems may remove the currency boundary among countries, bringing all nations, particularly ASEAN countries, into a united region using one single digital currency.
In addition, this digital enhancement in business operations will definitely lead to better customer experiences, better brand reputation, streamlined operations that save time and money, increased sales, a larger customer base, increased organizational reach, improved management decisions through technology platforms, rapid development of new products and services, and a larger degree of creativity and innovation. These are some benefits we have gained or will have gained as long as we move towards fully digitalizing operations in this new era.
These days information technology has become a part of people’s lives and it will include almost everything. Now is a good time for ASEAN nations to move forward together in digitalizing our industries to support regional economic growth. In Laos, our business as Phongsavanh Group which has at least 15 companies under it is moving forward slowly and digitalizing each business step by step. It may affect employment in some sectors but we may transfer those from the affected sectors into other sectors since we have very complex business operations throughout the country. Five years from , I believe that digitalization will play a very crucial part in everyone’s life as everything will be transacted through digital devices. Cash is more unlikely to be used for any transaction with cashless systems completely replacing the need for notes and coins. I foresee that every industrial sector will move to the digital world soon in order to improve productivity. There might be various opportunities during this digital transition and we will stand to gain the most benefit from it and do believe that digitalization will enhance our regional economic growth in ASEAN.
About Prof. Dr. Od Phongsavanh
Prof. Dr. Od Phongsavanh is the President of Phongsavanh Group which has had an integrated business to serve society in the Laos and the region since 1977. Over past thirty-five years Dr. Od has established 10 subsidiaries under Phongsavanh Group. In addition to his success in business operations, he contributes to socio-economic development in the country and is currently a top member of the Lao Front for National Construction, a government organization.