Publication Type
Journal Article
Version
submittedVersion
Publication Date
11-2023
Abstract
The behavioral literature suggests that minor frictions can elicit desirable behavior without obvious coercion. Using closures of ATMs in a densely populated city as an instrument for small frictions to physical banking access, we find that customers affected by ATM closures increase their usage of the bank's digital platform. Other spillover effects of this adoption of financial technology include increases in point-of-sale (POS) transactions, electronic funds transfers, automatic bill payments and savings, and a reduction in cash usage. Our results show that minor frictions can help overcome the status-quo bias and facilitate significant behavior change.
Keywords
Frictions, Digital Banking, Fintech, Geography, Household Finance, Financial Inclusion
Discipline
E-Commerce | Finance and Financial Management
Research Areas
Finance
Publication
Management Science
First Page
1
Last Page
53
ISSN
0025-1909
Identifier
10.1287/mnsc.2023.4972
Publisher
Institute for Operations Research and Management Sciences
Embargo Period
5-18-2021
Citation
CHOI, Hyun Soo and LOH, Roger.
Physical frictions and digital banking adoption. (2023). Management Science. 1-53.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6708
Copyright Owner and License
Authors / SKBI
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1287/mnsc.2023.4972