Impact of Mobile Phones and Internet Use on Financial Inclusion: Empirical Evidence From the Eu Post-Communist Countries

Abstract

Poverty alleviation has become one of the biggest challenges for many countries and access to financial services is considered to be a key driver of development and economic growth. Finding solutions that can break down barriers that poor people are facing to access formal financial services has become a major concern for researchers, governments, financial institutions. Financial services must reinvent themselves and the adoption of new technology is a crucial key to overhaul their operations and to find innovative solutions to manage customer expectations. The escalation in access and penetration level of mobile phones and the Internet can improve financial inclusion by facilitating easy access to financial services, by providing secure transaction platforms, by reducing transaction costs, by providing a competitive business framework. There has been relatively limited research on the impact of Internet and mobile phones use on financial inclusion, therefore our main purpose was to investigate this linkage in a sample of 11 post-communist countries of the European Union from 1996–2017 using panel cointegration and causality analyses. Firstly, we investigated whether mobile cellular phone subscriptions and the rate of Internet usage affect financial institutions’ access; secondly, we analysed the impact of these variables on financial market access. Results indicate that mobile cellular phone subscriptions positively affect both financial institution access in countries like Hungary, Latvia, Lithuania, Poland, and Slovenia and financial market access in Bulgaria, Croatia, and Hungary. Also, a negative relationship between mobile cellular phone subscriptions and financial institution access was noticed in the Czech Republic and regarding financial market access in the Czech Republic and Poland. Our findings also indicate both positive and negative relationships between Internet usage rates and financial institutions and financial markets access. By increasing Internet usage we can improve access to financial institutions in Bulgaria, Croatia, Czech Republic, Hungary, and Poland and we can increase financial markets access in Latvia and Slovenia.

Mobile Money Agent Network: Key Towards Digital Financial Inclusion

“…Furthermore, based on the study carried out by Barbesino et al (2005), the internet in Europe has emerged as a widely recognized distribution channel for the finance industry that includes traditional and new players. However, research using cross-sectional data from eleven post-communist Europe countries has identified both the positive and negative relationship between the mobile phone and internet consumption towards financial institution and market access (Bayar et al, 2021).…”

The Value of Art in Persuasive Marketing Communication and Its Sustainable Effect on the Country of Origin

“…The integration of both interactive and traditional media tends to be more effective for marketing communication campaigns [72]. The Internet and mobile devices "have become useful tools" [73] in the digital era and this recent pandemic period. The cyber environment is a challenge and also an opportunity for both companies and consumers, where this requires persuasive information to be trustworthy [74].…”

The Interplay between Digitalization, Education and Financial Development: A European Case Study

“…Furthermore, Khera et al (2021) note that some of the key drivers for improving financial development are represented by the quality of financial institutions as well as the levels of financial and digital education. Finally, Bayar et al (2021) analyze the linkages between digitalization and financial inclusion in EU post-communist countries and conclude that mobile cellular subscriptions can positively influence economic and financial development.…”

“…The variables were chosen based on existing literature on financial development in relation to digitization and education, as mentioned in the Introduction, as well as economic rationale. Extant literature has used many proxies for financial development for a long time without agreeing on the ideal choice, usually considering banking system attributes and capital market characteristics, depending on the research scope and objectives (see, in this respect, King and Levine 1993;Kim and Lin 2011;Sehrawat and Giri 2015;Bist 2018;Bayar et al 2021;Cheng et al 2021;Mignamissi 2021, among many others). The acknowledgment by the International Monetary Fund (IMF) of the need to incorporate in the assessment of financial development the diversity of financial systems across countries, first evidenced by Čihák et al (2012) and further by Sahay et al (Sahay et al) led to a comprehensive set of financial development measures in the form of indexes using the methodology proposed by Svirydzenka (2016).…”