The future of risk: How global trends are reshaping risk management

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Nandan Nilekani can’t stop trying to push India into the future. He started nearly 30 years ago, masterminding an ongoing experiment in technological state capacity that started with Aadhaar—the world’s largest digital identity system. Aadhaar means “foundation” in Hindi, and on that bedrock Nilekani and people working with him went on to build a sprawling collection of free, interoperating online tools that add up to nothing less than a digital infrastructure for society. They cover government services, digital payments, banking, credit, and health care, offering convenience and access that would be eye-popping in wealthy countries a tenth of India’s size. In India those systems are called, collectively, “digital public infrastructure,” or DPI.

At 70 years old, Nilekani should be retired. But he has a few more ideas. India’s electrical grid is creaky and prone to failure; Nilekani wants to add a layer of digital communication to stabilize it. And then there’s his idea to expand the financial functions in DPI to the rest of the world, creating a global digital backbone for commerce that he calls the “finternet.”

Today, a farmer in a village in India, hours from the nearest bank, can collect welfare payments or transfer money by simply pressing a thumb to a fingerprint scanner at the local store. Digitally authenticated copies of driver’s licenses, birth certificates, and educational records can be accessed and shared via a digital wallet that sits on your smartphone.  In big cities, where cash is less and less common (just trying to break a bill can be a major headache), mobile payments are ubiquitous.

At the heart of all these tools is Aadhaar. The system gives every Indian a 12-digit number that, in combination with either a fingerprint scan or an SMS code, allows access to government services, SIM cards, basic bank accounts, digital signature services, and social welfare payments. The Indian government says that since its inception in 2009, Aadhaar has saved 3.48 trillion rupees ($39.2 billion) by boosting efficiency, bypassing corrupt officials, and cutting other types of fraud. The system is controversial and imperfect—a database with 1.4 billion people in it comes with inherent security and privacy concerns. Still, in the most populous nation on Earth, a big portion of the bureaucracy anyone might encounter in daily life just happens in the cloud.

Nilekani was behind much of that innovation, marshaling an army of civil servants, tech companies, and volunteers. Now he sees it in action every day. “It reinforces that what you have done is not some abstract stuff, but real stuff for real people,” he says.

By his own admission, Nilekani is entering the twilight of his career. But it’s not over yet. He’s now “chief mentor” for the India Energy Stack (IES), a government initiative to connect the fragmented data held by companies responsible for generating, transmitting, and distributing power.   Nilekani’s other side hustle is even more ambitious. His idea for a global “finternet” combines Aadhaarization with blockchains—creating digital representations called tokens for not only financial instruments like stocks or bonds but also real-world assets like houses or jewelry. Anyone from a bank to an asset manager or even a company could create and manage these tokens, but Nilekani’s team especially hopes the idea will help poor people trade their assets, or use them as loan collateral—expanding financial services to those who otherwise couldn’t access them.

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