Empowerment and individualization: online banking and household financial organization

Abstract Bringing economic and family sociology into the digital era, this study examines and highlights the transformative potential of online banking in reconfiguring household financial organization. Using an instrumental-variable approach to analyzing data from the UK Household Longitudinal Study (2019–2023), we examine the impact of partners’ online banking use on who manages the couple’s money and controls major financial decisions. We reveal an ‘empowering effect’ whereby one’s use of online banking bolsters their control of both money management and major financial decisions, and this effect is particularly pronounced when one’s partner does not use online banking. Online banking similarly bolsters the power of women and men in money management, but subtle gender differences are observed in financial decision-making. Whereas online banking increases men’s exclusive control of major financial decisions, it bolsters women’s exclusive or joint control of such decisions. We also find an ‘individualizing effect’ whereby both women’s and men’s use of online banking increases the likelihood of partners’ independent money management, and independent money management is least likely when only one partner uses online banking. Our study provides novel insights into how digitalization, seen through online banking, redistributes power in and reconfigures the nature of couple relationships.