Impact Of Digital Financial Services On Firm Profitability And Financial Inclusion In Developing Economies
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Abstract
Financial industry has been greatly affected by the fast integration of digital technology. This is especially so in the emerging economies where the traditional banking services have had a narrow scope. Digital financial services (DFS) such as mobile banking, online payments, and online financial service provision are significant in increasing the accessibility of capital to the population and enhancing the efficiency of companies. The paper under analysis explores the effects of digital financial services on corporate profitability and financial inclusion with a particular focus on the companies located in Bangalore. It studies the relationship among digital financial service take-up, company profitability, and financial inclusion based on a descriptive and analytical methodology. The findings have depicted that services such as mobile payments and digital banking are heavily applied across the firms and have aided in enhanced transactions at low operating and finance management costs. The research also established that the accessibility of credit and other financial services was increased as more individuals could access digital financial services, and this increased financial inclusion. There remain, however, difficulties in implementing the technology regarding cybersecurity related problems, deficiency in technical capabilities and overcharged implementation costs. The findings demonstrate that digital financial services play a significant role in enhancing the profitability of the company and financial inclusion in emerging markets.
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