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Can Internet Banking Affect Households' Participation in Financial Markets and Financial Awareness?

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  • VALENTINA MICHELANGELI
  • ELIANA VIVIANO

Abstract

We are in a digital era and more and more banks have begun to offer Internet banking. The availability of this new channel can reduce households' cost of acquiring information and the time spent on financial transactions; therefore, it could also impact on households' decisions to start investing in financial markets. Using an instrumental variable approach, we find that the adoption of Internet banking induces households to participate in financial markets and, in particular, to hold short‐term assets with a low risk/return profile. Over time, the adoption of Internet banking also drives a better understanding of basic financial concepts.

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  • Valentina Michelangeli & Eliana Viviano, 2024. "Can Internet Banking Affect Households' Participation in Financial Markets and Financial Awareness?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 56(4), pages 705-739, June.
    • Handle: RePEc:wly:jmoncb:v:56:y:2024:i:4:p:705-739
    DOI: 10.1111/jmcb.13098
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    Cited by:

    1. Daniela Marconi & Marco Marinucci & Giovanna Paladino, 2022. "Digitalization, financial knowledge and financial decisions," Questioni di Economia e Finanza (Occasional Papers) 741, Bank of Italy, Economic Research and International Relations Area.
    2. Branzoli, Nicola & Rainone, Edoardo & Supino, Ilaria, 2024. "The role of banks’ technology adoption in credit markets during the pandemic," Journal of Financial Stability, Elsevier, vol. 71(C).
    3. Sara Lamboglia & Fabio Travaglino, 2022. "Statistical sources for assessing financial literacy," Questioni di Economia e Finanza (Occasional Papers) 725, Bank of Italy, Economic Research and International Relations Area.
    4. Nicola Branzoli & Edoardo Rainone & Ilaria Supino, 2023. "The role of banks' technology adoption in credit markets during the pandemic," Temi di discussione (Economic working papers) 1406, Bank of Italy, Economic Research and International Relations Area.
    5. Magda Bianco & Daniela Marconi & Angela Romagnoli & Massimiliano Stacchini, 2022. "Challenges for financial inclusion: the role for financial education and new directions," Questioni di Economia e Finanza (Occasional Papers) 723, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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