Digital accessibility in the context of preference for financial services

Abstract

The paper addresses the question of how digital access is related to the preference for financial services. The purpose of the research was to reveal the main types of interrelationships between digital and financial access by dividing and comparing countries with different corresponding characteristics. The research hypothesis suggested a negative correlation would exist between digital access and penetration of traditional financial services. To test this hypothesis, data from countries with advanced and developing markets were analyzed. The share of the population with Internet access was used as an indicator of digital access. To evaluate the availability of financial services, the IMF financial access index was considered. The countries were ranked by the level of digital and financial access, which allowed them to be divided into four groups according four sub-hypotheses: low financial and high digital penetration, high digital and financial penetration, low digital and high financial penetration, and low digital and financial penetration. The correlation analysis of the obtained data revealed a weak negative relationship between digital and financial access for each of the groups, and confirmed the tested hypotheses. It was concluded that digital access by itself is not a driver for expanding the availability of financial services, but it can contribute to innovative financial development through the formation of alternative financial services. This research contributes to the understanding of the ambiguous relationship between digital and financial access and, ultimately, to the criticism of the optimistic perception of digital finance, which has practical significance for financial regulation.