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1.
Journal of Financial Counseling and Planning ; 33(2):160-170, 2022.
Article in English | ProQuest Central | ID: covidwho-1933446

ABSTRACT

When the COVID-19 pandemic caused businesses to close and triggered high unemployment in 2020, millions of unbanked U.S. households, those without a bank account, had to wait for weeks and months for their stimulus checks to arrive. The delayed delivery of stimulus checks issued by the Coronavirus Aid, Relief, and Economic Security (CARES) Act sheds light on the critical role that safe, affordable financial services and products play in people’s ability to cope with financial shocks. Dialogues over banking practices have been framed with a banked-unbanked dichotomous framework that masks more nuanced understandings of households’ financial realities, including the underbanked, who use a bank account and alternative financial services simultaneously. Using data from the 2015 National Financial Capability Study, this study identifies and compares predictors of being underbanked and unbanked, respectively. We found that the underbanked group is a sizable, distinctively different group. Income volatility and welfare benefit receipt are both associated with being underbanked rather than unbanked. Our findings call for expanding the current, limited framework to gain more complete, nuanced understandings of banking practices.

2.
Information Technology & People ; 35(4):1298-1325, 2022.
Article in English | ProQuest Central | ID: covidwho-1878904

ABSTRACT

Purpose>The research examines the simultaneous processes of value co-creation and value co-destruction in the implementation of a mobile banking application in rural Colombia. Rural communities experience digital and financial deficits and often become the object of technology-based initiatives. In the town, vulnerable female heads of household received a government subsidy through a mobile app, becoming an experimental group for this government–private bank collaboration. In an effort to create the first cashless society in Colombia, the bank engaged the entire town and local government to create a service ecosystem, constituted by operant resources.Design/methodology/approach>This study uses a qualitative, ethnographic approach to investigate the experiences of stakeholders in engaging with a mobile banking app. The empirical data is drawn from 34 interviews, representing different layers of this service ecosystem. The study identified and analysed actor engagement behaviours that occurred in the micro-, meso-, macro- and meta-layers of this ecosystem that shaped the perception and usage of mobile payments and digital money for rural consumers.Findings>The study found that simultaneous manifestations of the co-creation and co-destruction of value present in different layers ultimately diminished the value proposition for this digital money system. We shed light on how actor engagement transitions across different layers of the ecosystem and that negative interactions in the meta-layer of the ecosystem can affect perceptions of value in the micro-layer.Originality/value>This study has contributed to the service literature by integrating epistemological cultural theory into value co-creation and co-destruction construct. In doing so, we provide a broader context for understanding how actor engagement can negatively impact on the value creation process and offer a meaningful contribution to the development of midrange theory of the value creation process.

3.
The International Journal of Bank Marketing ; 40(4):679-700, 2022.
Article in English | ProQuest Central | ID: covidwho-1806813

ABSTRACT

Purpose>Various digital banking platforms (website and apps) are offered to bank customers in order to create an experiential service, which is essential in retaining customers and generating brand bank loyalty. The current study aims to examine the dynamics of customer emotional experience generated during digital banking service delivery and investigate the effect of customer psychological engagement with various digital platform types on brand bank loyalty creation.Design/methodology/approach>A conceptual framework was constructed. Data were collected from digital banking customers through a web-based survey conducted via an online Internet panel. It involved 502 participants. The study employs a path analysis method using structural equation modeling.Findings>The empirical results suggest that there are two paths from emotional attachment to bank loyalty: a direct path and an indirect path shaped by customer psychological engagement with service platforms. Additionally, it was found that the digital platform (website vs apps) used by the customer determined the magnitude of the impact of emotional attachment to the bank on psychological engagement with service platforms.Practical implications>This research claims that features of digital banking services are sufficient to enhance affective brand responses and maintain long-lasting relationships with customers. Using experiential services and psychologically engaging the customers, this goal can be achieved. Additionally, well designed apps can improve interaction with services and subsequently enhance loyalty.Originality/value>This study facilitates a better understanding of the customer's emotional–psychological state during engagement with digital service delivery. Its novelty and contribution to the literature focus on the notion that the impact of emotional attachment on bank loyalty is mediated by experiential psychological engagement with the digital platform and moderated by the type of digital platform used.

4.
The International Journal of Bank Marketing ; 40(2):321-340, 2022.
Article in English | ProQuest Central | ID: covidwho-1735731

ABSTRACT

Purpose>This study examines the relationship between prepaid debit card use and the intention to open a bank account within twelve months. The Transtheoretical Model (TTM) of Behavior Change helped to conceptualize one's stage in the process of changing from unbanked status if desired. The Theory of Planned Behavior (TPB) provided a framework to examine factors that influence banking intention. Prepaid debit card use is considered a social norm as it is a popular alternative to banking, and these accounts have increasingly mimicked bank account features in recent years.Design/methodology/approach>Three in-depth focus group interviews with low-income respondents were first conducted in 2012, which revealed a prolific use of prepaid debit cards. Most participants had previous banking history, and despite negative experiences, some requested information about banking terms and “free” banking. These themes and previous studies informed a TPB-based biprobit model, which was estimated using data of an unbanked sample from 2013, 2015 and 2017 waves of the US Survey of Unbanked and Underbanked Households.Findings>Though there was banking interest in the focus groups, no significant empirical association was found between recent prepaid debit card use and banking intention. Going deeper with another sample, we found that current cardholders were equally likely to have become recently banked or to be long-term unbanked but less likely to be long-term banked. Also, factors such as a more recent relationship with banks, use of other alternative financial services for transactions and credit, smartphone ownership, and trust increase banking intention.Research limitations/implications>The main limitation of the study is the cross-section quantitative data. Future research may track banking status over time, particularly as financial technology (fintech) evolves with alternatives that may influence banks and customers to adapt.Practical implications>To compete with “leapfrog” fintech banking alternatives, bank managers should consider utilizing customer segmentation to target “at-risk” customers and former customers with products and terms tailored to meet their banking needs. Banks can also tailor digital products to capture markets in banking desserts through mobile phones.Originality/value>This mixed-methods study is unique in that it builds on insights from earlier in-depth interviews with real unbanked groups to examine a trend in prepaid debit card use and the impact on banking interest.

5.
Studies in Economics and Finance ; 39(2):331-341, 2022.
Article in English | ProQuest Central | ID: covidwho-1706810

ABSTRACT

PurposeWhat is the impact of financial literacy on the lending activity of banks? Based on the results of the S&P Global FinLit Survey for an extensive sample of countries, this paper aims to provide the first global test for the impact of country-level financial literacy on the lending activity of commercial banks.Design/methodology/approachThe authors use data on financial literacy by country from the S&P Global FinLit Survey that was completed in 2014 and lending activity and macroeconomic control variables data from the World Bank from 2015 to 2017 to estimate the cross-sectional effect of financial literacy on the importance of loans and of non-performing loans, using different estimation methods.FindingsThe results show that, first, financial literacy favors lending activity, contributing to enhance the importance of credit in the economy. Second, financial literacy prevents bad loans from building up, thus reducing credit risk and favoring the quality of the credit portfolio of banks. These results are robust to several controls for macroeconomic conditions and the quality of institutions. They are also robust to different estimation methods.Research limitations/implicationsThe evidence of the positive (negative) impact of population financial literacy on the quantity (poor quality) of loans suggests that the efforts to enhance the financial literacy of the population contribute to the sustainable development of the financial sector and economic growth.Originality/valueThe paper extends to an international and country-level the available evidence of the consequences of the existence (or lack of) of financial literacy for the lending activity of commercial banks, focusing on the amount of credit granted and the quality of such credit. Thus, the paper provides an exploratory analysis of the impact of country-level financial literacy on the lending activities of commercial banks.

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