The Role of Digital Banking Services in Strengthening Financial Inclusion
DOI:
https://doi.org/10.70009/Keywords:
digital connectivity, bank accounts, digital payments, financial exclusion, developing countriesAbstract
This article explores the role of digital banking services in improving financial inclusion in developing countries. It highlights that the widespread adoption of mobile phones and internet access has enabled wider participation in financial systems. This is because the digital connectivity created by mobile phones and the internet together provides access to digital banking services and digital payments to the underserved population. The results show that the lack of digital connectivity and digital skills among people and the weak digital infrastructure in countries remain key barriers to accessing digital banking services. These barriers particularly affect women, low-income individuals and rural communities. In addition, the lack of a mobile phone, ID or SIM card in the use of mobile money accounts, which are increasingly popular as an alternative to digital banking services in African countries, leaves some people without access to these services. The article concludes that while digital banking has great potential to reduce financial inequality, its success depends on systematic efforts to remove existing barriers. Countries can fully leverage the benefits of digital banking services to promote financial inclusion by investing in digital infrastructure deployment and creating digital environments.
References
Adel, N. (2024). The impact of digital literacy and technology adoption on financial inclusion in Africa, Asia, and Latin America. Heliyon, Volume 10, Issue 24, 30 December 2024, e40951. https://doi.org/10.1016/j.heliyon.2024.e40951
Aurazo, J. & Gasmi, F. (2024). Digital payment systems in emerging economies: Lessons from Kenya, India, Brazil, and Peru. Information Economics and Policy, Volume 69, December 2024, 101113. https://doi.org/10.1016/j.infoecopol.2024.101113
Banna, H. & Alam, R. (2020). Impact of digital financial inclusion on ASEAN banking stability: implications for the post-Covid-19 era. Studies in Economics and Finance, Volume 38, Issue 2, 19 June 2020, Pages 504-523. https://doi.org/10.1108/SEF-09-2020-0388
Basnayake, D., Naranpanawa, A., Selvanathan, S. & Bandara, J. (2024). Financial inclusion through digitalization and economic growth in Asia-Pacific countries. International Review of Financial Analysis, Volume 96, Part A, November 2024, 103596. https://doi.org/10.1016/j.irfa.2024.103596
Bawuah, I. (2025). Mobile Money and Financial Inclusion: The Role of Institutional Quality. Global Social Welfare, Volume 12, pages 41–55. https://doi.org/10.1007/s40609-023-00325-3
Burnett, S. (2025). Online Banking Usage Statistics 2026: Shocking Growth. Retrieved from https://coinlaw.io/online-banking-usage-statistics.
Drama, B. & Senou, M. (2025). Unraveling the digital technologies and banking inclusion nexus in Sub Saharan Africa: What causality for what heterogeneity? Discover Sustainability, Volume 6, article number 772. https://doi.org/10.1007/s43621-025-01694-9
Demirgüç-Kunt, A., Klapper, L., Singer, D., Ansar, S. & Hess, J. (2022). The Global Findex Database 2021: Financial inclusion, digital payments, and resilience in the age of COVID-19. World Bank.
Fazal, A., Ahmed, A. & Abbas, S. (2024). Importance of artificial intelligence in achieving sustainable development goals through financial inclusion. Qualitative Research in Financial Markets, Volume 17, Issue 2, Pages 432-452. https://doi.org/10.1108/QRFM-04-2023-0098
Gaurav, C. & Goldberg, K. (2022). The Employment Effects of Mobile Internet in Developing Countries. NBER Working Paper 30741, National Bureau of Economic Research, Cambridge, MA. https://doi.org/10.3386/W30741
GSMA. (2024). The State of Mobile Internet Connectivity: Key Findings 2024. GSMA, London. https://www.gsma.com/r/wp-content/uploads/2024/10/The-State-of-Mobile-Internet -Connectivity-Report-Key-Findings-2024.pdf.
Guerra-Leal, E., Arredondo-Trapero, F. & Vázquez-Parra, J. (2023). Financial inclusion and digital banking on an emergent economy. Review of Behavioral Finance, Volume 15, Issue 2, 17, Pages 257-272. https://doi.org/10.1108/RBF-08-2021-0150
Ingale, K. & Paluri, R. (2020). Financial literacy and financial behaviour: a bibliometric analysis. Review of Behavioral Finance, Volume 14, Issue 1, 7 October 2020, Pages 130-154. https://doi.org/10.1108/RBF-06-2020-0141
Joseph, E., Chegere, M. & Mdadila, K. (2026). Financial inclusion in Sub-Saharan Africa: does the mobile money adoption matter? Scientific African, Volume 32,, e03282. https://doi.org/10.1016/j.sciaf.2026.e03282
Kalvin, B., Castells, P., Cruz, G., Masaki, T., Pfutze, T. & Winkler, H. (2024). The Welfare Effects of Mobile Broadband Internet: Evidence from Nigeria. Journal of Development Economics, 170, 103314. https://doi.org/10.1016/j.jdeveco.2024.103314
Kelikume, I. (2021). Digital financial inclusion, informal economy and poverty reduction in Africa. Journal of Enterprising Communities: People and Places in the Global Economy, Volume 15, Issue 4, 5 April 2021, Pages 626-640. https://doi.org/10.1108/JEC-06-2020-0124
Khatun, M., Sarker, N. & Mitra, S. (2024). Adoption of mobile banking to promote financial inclusion among rural farming community: Drivers and satisfaction level perspective. Journal of Agriculture and Food Research, Volume 18, December 2024, 101448. https://doi.org/10.1016/j.jafr.2024.101448
Klapper, L., Singer, D., Starita, L. & Norris, A. (2025). The Global Findex Database 2025: Connectivity and Financial Inclusion in the Digital Economy.
Kumar, S. & Jie, Q. (2023). Exploring the role of financial inclusion in poverty reduction: An empirical study. World Development Sustainability, Volume 3, December 2023, 100103. https://doi.org/10.1016/j.wds.2023.100103
Lorain, M., Jannes, G., López-Sánchez, P. & Sierra, J. (2025). Unraveling financial exclusion during the COVID-19 pandemic: A gender perspective in Latin American countries. World Development, Volume 188, April 2025. https://doi.org/10.1016/j.worlddev.2025.106924
Maqbuli, H. & Al-Mahmoudi, F. (2026). Digital transformation and organizational performance: Evidence from the banking sector in a developing economy. Social Sciences & Humanities Open, Volume 13, Issue 6. https://doi.org/10.1016/j.ssaho.2026.102573
Niu, G., Jin, X., Wang, Q. & Zhou, Y. (2022). Broadband infrastructure and digital financial inclusion in rural China. China Economic Review, Volume 76, December 2022. https://doi.org/10.1016/j.chieco.2022.101853
Nyarko, E., Amoateng, K. & Aboagye, A. (2023). Financial inclusion and poverty: evidence from developing economies. International Journal of Social Economics, Volume 50, Issue 12, 26 June 2023, Pages 1719-1734. https://doi.org/10.1108/IJSE-11-2021-0690
Ozili, P. (2024). Impact of financial inclusion, financial stability, bank nonperforming loans, inflation, macroeconomic management quality and unemployment on economic growth in Nigeria. African Journal of Economic and Management Studies, Volume 16, Issue 4, 20 December 2024, Pages 547-561. https://doi.org/10.1108/AJEMS-05-2024-0287
Persaud, A. & Thaffe, W. (2023). The state of financial inclusion research on developing countries. Transnational Corporations Review. Volume 15, Issue 4, December 2023, Pages 22-34. https://doi.org/10.1016/j.tncr.2023.08.002
Sant'Anna, D. & Figueiredo, P. (2024). Fintech innovation: Is it beneficial or detrimental to financial inclusion and financial stability? A systematic literature review and research directions. Emerging Markets Review, Volume 60, June 2024. https://doi.org/10.1016/j.ememar.2024.101140
Shah, M., Khan, I. & Khan, N. (2024). The role of digital payments in overspending behavior: a mental accounting perspective. International Journal of Emerging Markets, Volume 20, Issue 10, 29 July 2024, Pages 4031-4053. https://doi.org/10.1108/IJOEM-08-2023-1313
Sharma, J. (2025). Digital transformation in banking industry. Encyclopedia of Monetary Policy, Financial Markets and Banking, Volume 4, 2025, Pages 401-405. https://doi.org/10.1016/B978-0-44-313776-1.00105-7
Xie, J. (2025). Banking evolution in the digital age: How digital financial inclusion induces systematic financial risk? Finance Research Letters, Volume 80, June 2025, 107351. https://doi.org/10.1016/j.frl.2025.107351
Wang, K. (2025). Beyond digital finance: The impact of internet banking adoption on subjective life satisfaction. Finance Research Open, Volume 1, Issue 2, June 2025, 100012. https://doi.org/10.1016/j.finr.2025.100012
World Bank. (2022). Digital Financial Inclusion: Key to Unlocking Economic Potential. World Development Report 2022.
Zeqiraj, V., Sohag, K. & Hammoudeh, S. (2022). Financial inclusion in developing countries: Do quality institutions matter? Journal of International Financial Markets, Institutions and Money, Volume 81, November 2022, 101677. https://doi.org/10.1016/j.intfin.2022.101677
Downloads
Published
Data Availability Statement
The data that support the findings of this study are available from the corresponding author upon reasonable request.
Issue
Section
Categories
License
Copyright (c) 2026 Nizami Khudiyev, Ragib Mammadli (Author)
This work is licensed under a Creative Commons Attribution 4.0 International License.
