Work

Epidemic Exposure, Financial Technology, and the Digital Divide

Year: 2022

Type: article

Abstract: We ask whether epidemic exposure leads to a shift in financial technology usage and who participates in this shift. We exploit a data set combining Gallup World Polls and Global Findex surveys for some 250,000 individuals in 140 countries, merging them with information on the incidence of epidemics and local 3G Internet infrastructure. Epidemic exposure is associated with an increase in remote‐access (online/mobile) banking and substitution from bank branch based to ATM activity. The temporary nature of the effects we identify is more consistent with a demand channel rather than that of supply with high initial fixed costs. Exploring heterogeneity using a machine learning–driven approach, we find that young, high‐income earners in full‐time employment have the greatest tendency to shift to online/mobile transactions in response to epidemics. Baseline effects are larger for individuals with better ex ante 3G signal coverage, highlighting the role of the digital divide in adaption to new technologies necessitated by adverse external shocks.

Source: Journal of money credit and banking

DOI: 10.1111/jmcb.12945

Authors: ORKUN SAKA, BARRY EICHENGREEN, CEVAT GIRAY AKSOY

Institution: University of California, Berkeley

Language: English

Topic: Digital Transformation in Financial Services

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Reduced inequalities

Open Access status: hybrid

Estimated APC paid: $3,350