Business and Technology Insights

Transforming Social Welfare with Digital Technologies

 
February 21, 2018

Rising economic volatility has made the welfare state more relevant than before. Economic growth is plateauing in many countries, leading to wage stagnation, social tension, and distress migration. Higher economic inequality means governments across developed and developing economies must continue to deliver welfare programs to the less advantaged, and even expand their scope, despite growing spending commitments and tightening budgets. The best way governments can successfully do this is through leveraging technology to transform social welfare delivery.

Typically, social welfare benefits are ‘pull’ or demand-based. This places the responsibility on the beneficiaries to be aware of what they are entitled to and how they can claim these. However, there are several challenges with this model.

  • Lack of awareness: A majority of the beneficiaries are poorly educated, with little access to government information sources. As a result, they are mostly unaware of their entitlements, and often miss out on claiming benefits.
  • Complex documentation: Applying for benefits involves complex procedures and compliance requirements, with extensive documentation, authentication, and verification. Additionally, complex procedures may need the poor to make repeat visits, imposing economic opportunity costs on them of forfeiting a day’s wage and incurring travel cost.
  • Identity authentication: The poor seldom have requisite government identity documents, and are therefore unable to meet authentication requirements. For daily wage earners, who often move places in search of jobs, documentation requirements compound the challenges.
  • Migrating beneficiaries: The jurisdiction of social welfare benefits is often shared between central, state, and local governments. Given the migratory lifestyle most economically backward people lead, they run the risk of losing the benefits disbursed by a particular government after they leave the particular jurisdiction.
  • Locational constraints: Welfare programs require beneficiaries to visit government offices to submit claims and receive benefits. Many of the government offices are located in urban centers, and accessing these could be a challenge for beneficiaries from rural locations

Striding toward an Empathetic, Technology-led Social Welfare System

In the pull mode, therefore, interventions tend to be piecemeal, leading to small operational improvements, such as reduction in compliance cost, or slightly enhanced efficiency. What we really need is a fundamental change where the beneficiary is right at the heart of the delivery framework.

An integrated play of digital technologies can lead to a far more agile, scalable, secure and future-proof re-architecting of the transactional ’pull’ model into a ’push’ model. A ‘Digital by Default’ service delivery modelwill ensure beneficiary-centricity and ease of use. Digital workflows can ensure that the processes underpinning social welfare service delivery are simple and intuitive, and provide a transparent ‘straight through processing’ environment with minimal manual intervention. Dematerialization of documents and biometric identity assurance, coupled with a ‘Tell-us-once’ approach will be integral to this simplification exercise.

Here are some technology interventions for governments to explore:

  • Digital self-service channels: To improve anywhere-anytime accessibility and reduce administrative costs, government agencies must deploy digital self-service channels, including web portals, mobile phones, and self-service kiosks. With smartphones becoming ubiquitous and falling connectivity costs, mobile should be integral to any channel shift strategy.
  • Biometric identity assurance: Biometrics-based identification helps eliminate identity fraud. It also provides a ‘single version of the truth’ where beneficiaries claiming benefits through more than one scheme do not need to apply and prove their identity separately for each scheme.
  • Digital benefit payments: An integrated national-level payment system comprising banks, post offices, and financial institutions will allow benefits to be transferred directly to beneficiary accounts. User-friendly mobile apps that allow beneficiaries to DBT will eliminate leakages in the delivery system due to complex and archaic workflows, corrupt practices, and manual intervention.
  • Analytics: Robust analytics can help assess the efficiency and efficacy of social welfare schemes, thereby providing relevant insights to enable empirical policy decisions. Analytics can also assist in eliminating ghost beneficiaries, detecting identity fraud, correlating cause and effect, and sharpening policy interventions. For example, if unemployment benefits for a particular region are persistently high, it can be assumed that policy interventions to generate employment in such regions require renewed thrust.
  • Portability: Benefits must be portable across government jurisdictions and independent of locations. For example, if benefits are tagged to the residence of beneficiaries then they will be unable to avail benefits on relocation. UK’s Single Universal Credit (SUC) launched in 2013 replaces six means-tested benefits and tax credits, and allows beneficiaries to receive monthly payments directly in their bank accounts[1].

Today, tighter budgets are encouraging governments to find smart solutions to spending commitments like social welfare programs. Therefore, governments must design and implement beneficiary-centric interventionsthat ensure a simplified, portable, universal and easily accessible system, thus helping to create more equitable societies. What do you think will drive this change? What more should governments do? Please share your thoughts in the comments section below.

[1] GOV.UK, “Universal Credit”, accessed May 16, 2016, www.gov.uk/universal-credit/overview

Rajdeep heads the business development and marketing functions for the Government business unit at Tata Consultancy Services (TCS). He has over 20 years of cross functional experience and anchors several strategic transformation programs for domestic and international government bodies at TCS.