Perspectives 2020-2021 Public Sector

Citi Perspectives for the Public Sector 18 19 Public Sector Digitization: Payments and Receivables Take Center Stage Public Sector Digitization: Payments and Receivables Take Center Stage G overnments around the world are increasingly recognizing and harnessing the benefits of digitization. Payments and receivables should be a priority as they are high touch for citizens and companies, offer efficiency gains, and enhance accountability. Digitization has become a key focus for state and municipal governments around the world. They, like companies across all business sectors, are assessing and implementing potential use cases for innovative technologies such as big data (for example, fraud detection), the cloud (data security), deep learning (to eliminate manual invention), and distributed ledgers (to deliver a robust registry) and myriad other innovations. The potential economic, social and governance benefits are significant. Digitization has the potential to increase economic growth, promote innovation and modernize infrastructure. It can improve convenience and choice for citizens while fostering social cohesion and inclusion. By putting a spotlight on governance in the public sector, digitization can lead to service improvements and increased resiliency, transparency and risk management, cost optimization and help drive inclusive growth. As a result, digitization is seen as a key way to address longstanding challenges facing governments, including corruption, inefficiency, cumbersome bureaucracy and red tape, and citizen distrust and disengagement, which are often paradoxically paired with rising citizen expectations. Governments’ efforts to adopt digitization are being accelerated in the wake of COVID-19. In the immediate term, many governments are seeking efficient ways to channel funds to citizens or businesses. Given the sharp fall in economic growth, digitization is also seen as a catalyst for recovery: the UK could add 4% to UK GDP by 2030 by implementing digital IDs, for example. At the same time, governments know that the long-term costs incurred in overcoming the pandemic are unsustainable: new tools to drive efficiencies must be implemented to hasten the recovery. 18 Digitization has become a key focus for state and municipal governments around the world. 1 https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-identification-a-key-to-inclusive-growth Gary Schneider Head of North America Public Sector Group, Citi Anupam Sinha Global Head of Domestic Payments & Receivables, Citi