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

Copyright Owner and License

Authors / SKBI

Additional URL

https://doi.org/10.1287/mnsc.2023.4972

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