Digital Financial Exclusion in the EU: Socio-Economic Determinants and Inclusion Effects

Research purpose. This paper examines the potential of digital financial services to increase financial inclusion. It analyses socioeconomic factors associated with the adoption of basic and advanced digital options. By distinguishing between levels of digital engagement, the study clarifies whether digitalisation is associated with broader access to finance or serves as an additional benefit for already advantaged groups.

Design / Methodology / Approach. Using micro-level data from the Flash Eurobarometer 509 for EU countries, the study employs logistic and probit regression models. These methods are used to examine potential socio-economic factors of digital financial service adoption and to evaluate whether their use is associated with financial inclusion or exclusion. The empirical approach allows us to compare basic services, such as mobile banking and digital payments, with more advanced tools, including digital investments. In addition, robustness checks and alternative model specifications are employed to compare the results across different measures of financial inclusion.

Findings. The results show that digital financial services vary widely by socio-economic group. Older people, those with lower levels of education, and the economically inactive are more likely to experience digital financial exclusion. These patterns suggest that digital finance is shaped by existing socio-economic structures, rather than being universally accessible. While basic digital services are linked to significantly lower exclusion, advanced options are mostly used by already advantaged groups. This means digital finance may help with basic financial inclusion but may further reinforce disparities at higher levels.

Originality / Value / Practical implications. By linking digital financial service adoption to financial inclusion outcomes, the study provides new empirical evidence on the limits of digitalisation as an inclusion strategy. Unlike much of the existing literature, it jointly examines both the factors associated with its adoption and the consequences for financial inclusion. The results suggest that policies should focus not only on expanding digital financial technologies but also on reducing socio-economic barriers that shape their use. Attention needs to be paid to digital skills, financial literacy, and access to digital infrastructure. Such targeted approaches are likely to be more effective in ensuring that digital finance contributes to inclusive economic participation rather than reproducing existing inequalities.