Examining The Linkages Between ICT Adoption, ICT Regulation, Digital Inclusion and Financial Inclusion

Abstract

Recently, governments around the globe are increasingly embracing the adoption of information and communication technologies (ICTs) as a means of promoting financial inclusion among individuals. This extensive adoption of ICTs has significantly transformed individual access to financial transactions and services. Despite the potential of ICTs in fostering financial inclusion, especially amongst people in developing countries, there is scarcity of academic research that explores the links between ICTs, digital inclusion and financial inclusion. This study therefore explores the relationship between Information and Communication Technologies (ICT), digital inclusion, and financial inclusion both developing and developed economy. Utilizing the Technology-Organization-Environment (TOE) framework, the study examines how ICT adoption, ICT regulations, and digital inclusion impact financial inclusion across both developed and developing economies. The research employs a quantitative cross-sectional design, analyzing secondary data from 107 countries to test the proposed hypotheses. The findings reveal that ICT adoption alone does not significantly enhance financial inclusion, challenging the widely held belief that technological integration inherently improves access to financial services. Factors such as digital literacy gaps and socio-economic barriers play critical roles in this relationship. The study also highlights the significant positive effects of ICT regulations and digital inclusion on financial inclusion. Specifically, ICT regulations was found to not positively mediate the relationship between ICT adoption and financial inclusion, while digital inclusion was found to significantly and positively mediate the relationship between ICT adoption and financial inclusion. This study findings therefore emphasize the need for financial institutions and technology providers to invest in user-friendly interfaces and customer support systems that facilitates ease use of digital technologies. Also, policymakers and practitioners should prioritize on enhancing digital literacy and technical support through education programmes and community engagement. Finally, there should be a Public-private-partnership and subsidy on internet prices to help provide cheap and accessible technologies, and favourable regulations on ICTs.