Publication Type
Journal Article
Version
publishedVersion
Publication Date
8-2026
Abstract
We examine how digital disruption affects bank competition using the staggered rollout of 3G mobile networks. 3G expansion increased mobile banking adoption among tech-savvy households, reducing branch networks—especially in younger counties. Banks' strategies diverged: Less branch-reliant banks closed branches and competed on price, while more branch-reliant banks maintained branches but raised spreads. A structural model shows that perceived digital service improvements among younger consumers drove these shifts, reducing welfare for older savers. Counterfactuals demonstrate that subsidizing adoption for older savers can cost-effectively reduce these disparities, facilitating a smoother digital transition.
Keywords
technology, bank competition, consumer preference, digital inequality, financial inclusion
Discipline
Finance and Financial Management | Technology and Innovation
Research Areas
Finance
Publication
Journal of Finance
Volume
81
Issue
4
First Page
1951
Last Page
2004
ISSN
0022-1082
Identifier
10.1111/jofi.70051
Publisher
Wiley
Embargo Period
8-11-2026
Citation
JIANG, Erica Xuewei; YU, Gloria Yang; and ZHANG, Jinyuan.
Bank competition amid digital disruption: Implications for financial inclusion. (2026). Journal of Finance. 81, (4), 1951-2004.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7937
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-Share Alike 4.0 International License.
Additional URL
https://doi.org/10.1111/jofi.70051