Smartphone Banking Applications and Digital Financial Inclusion Barriers Mitigation: The Moderating Role of Behavioral Intentions (The Case of Iraq)

In adopting digital financial inclusion using digital apps in the Iraqi banking sector, users’ behavioral intentions and acceptance of digital apps are critical considerations to mitigate financial inclusion barriers. This study examines and discusses the role of smartphone banking technology as a new trend for extending financial inclusion by testing the impact of clients’ behavioral intentions (as a modified variable) on the part of smartphone banking apps in mitigating the digital financial inclusion barriers in the Republic of Iraq. The study used two models: the unified theory of acceptance and use of technology (UTAUT) model to determine essential constructs of technology use and a second model, a multidimensional index of financial inclusion (focusing on the dimension of the barriers). The main objective is to enhance understanding of how smartphone apps mitigate barriers to digital financial inclusion. The researchers collected survey data from 338 participants of Iraqi bank clients in the Baghdad governorate. After excluding 10 invalid responses, 328 (92%) were tested and analyzed using sPss software. Results of the two hypotheses emphasize that the respondents believe four critical constructs of the UTAUT model (PE, EE, SI, and FC) are key to digital financial inclusion and mitigate its barriers. Besides that, the positive of bank clients’ Baghdad governorate behavioral intentions to use digital apps play a vital role in improving the effectiveness of smartphone banking apps to mitigate digital financial inclusion barriers. Therefore, the study recommends that Iraqi banks with smartphone banking apps must develop and improve those apps to extend and diversify their operations on mobile platforms to enable more comprehensive categories of Iraqi society and motivate them to use the bank apps to purchase products and implement transactions.