Can Digitalisation Mitigate Financial Exclusion? Investigation of Regional Disparities

Abstract In this study, we use data from the World Bank Global Findex database for 2021 to investigate both voluntary and involuntary reasons for financial exclusion in an era of increasing digitalisation. Our analysis reveals that socio-demographic characteristics play a significant role in determining the reasons for financial exclusion. The results confirmed that increased access to the Internet could mitigate involuntary reasons for financial exclusion, mainly in middle- and low-income countries where the digitalisation boom has occurred in the last few years. The findings also highlight significant regional disparities: involuntary reasons for exclusion dominate in regions such as Sub-Saharan Africa, Latin America, and the Caribbean, while voluntary are more prevalent in areas like the Middle East and North Africa. These results underscore the issue’s complexity, showing that applying a single policy universally applicable to all countries is impossible. Each government and its regulators must consider regional specificities when defining policies to eliminate financial exclusion. Such targeted policies are crucial for reducing social inequalities, fostering broader financial inclusion, and promoting sustainable economic development.