EXPLORING THE INFLUENCE OF DIGITAL TRANSFORMATION ON FINANCIAL INCLUSION: INSIGHTS FROM SOUTHEAST ASIAN ECONOMIES

Financial inclusion has become a critical driver of economic growth in developing nations, particularly during periods of global economic downturn. In line with economic and technological advancements, many countries have recognised the essential role of financial inclusion in their economic and social development strategies. In Southeast Asia, digital transformation and financial inclusion have gained prominence due to a significant proportion of the population lacking access to formal financial services. This study examines the impact of digital transformation on financial inclusion from 2012 to 2021, utilising data from reputable sources such as the World Bank, IMF, and Bank Indonesia. Employing quantitative methods, including panel data least squares, the study finds that digital transformation significantly influences financial inclusion in Southeast Asian economies. The Digital Transformation Index (DTI) shows a positive and statistically significant effect on financial inclusion. Digital transformation enhances access to financial services, particularly for underserved or remote populations, enabling broader participation in formal financial activities such as banking, payments, and investments. These findings highlight that improving digital infrastructure could play a vital role in advancing financial inclusion across Southeast Asian economies.