The Effect of Digital Financial Inclusion on Bank Efficiency

Abstract

The growing development of digital technology has profoundly alter the financial industry. This paper would like to investigate the effect of the digital financial inclusion on the bank efficiency. The digital financial inclusion will be measured by the digital payment, while the bank efficiency by the lending-deposit spread. Based on the country level data from Global Financial Development Index database issued by The World bank, this paper found the significant effect of digital financial inclusion on the bank efficiency. This result reflects the importance of financial inclusion in the digital form on the improvement of performance of banking sector.