WITHDRAWN Marginalized Community in the Age of Digital Banking

Transitioning from cash to digital financial transactions has been a focus of technological advancements within the banking industry for the last several decades (Adrian & Mancini-Griffoli, 2019). The push towards digital banking was further intensified during the COVID-19 pandemic when people feared using paper currency and coins because of the increased risk of transmission (Alber & Danbour, 20202; Kumar et al., 2020).

The fight against marginality and social exclusion is at the forefront of social justice and social welfare (Byrne, 1999; Ottomann, 2011; Pierson, 2009). For decades, increasing attention has been given to the exclusion of marginalized groups from the mainstream economy (Cnaan, Moodithaya, Handy, 2011; Hills, Le Grand, & Piachaud, 2002; Littlewood et al., 1999). In many ways, technological advancements help bridge social and economic gaps. However, technology can also widen the divide, which is the case in rural India. In this presentation we focused on the impact that the advent digital banking may have on the socially excluded members of society with special reference to rural people in India. Socially marginalized people are regularly barred from participating in the financial industry. Their access to banking is restricted, or if available, is often limited to basic services only.

India is one country where the government pushes towards a cashless economy and full reliance on digital banking. In our study we aimed to assess the readiness and use of digital banking in villages. We investigated rural Indian villages that declared themselves as cashless to assess the financial reality of villagers. We conducted a survey of households (N=3,159) within villages across seven Indian states. In each state, we studied a village that was officially declared financially digital and a nearby comparison village that did not go digitally.

we found that villages which were officially declared “digital villages,” were not different from their neighboring villages. All villages demonstrated a very low level of digital banking utilization. Most rural Indians were not ready for the pending transition from cash to digital financial transactions. Among the key barriers are local vendors refusing to accept digital payment, high-banking costs, no regular electricity, the unreliable village Wi-Fi system, and no training in digital transactions.

Using probit regression models, we found that if the head of the household was a man, the likelihood of using digital banking was higher, however, participation in a self-help group also significantly correlated with the use of digital banking. What also strongly emerges is that households with a high income and high English proficiency are significantly more likely to use digital banking. Digital and financial literacies were also significantly associated with the use of digital banking.

While rich countries, are moving forward with the quest for cashless economy marginalized people are ill prepared. Without massive infrastructure and financial and technological training they are doomed to further lag behind. This is a key social work role that is not sufficiently discussed and our professional voice is rarely heard while social and economic implications are huge.