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Title: Technology, Opportunity & Access: Understanding Financial Inclusion in the U.S.

Citation Type: Working Paper

Publication Year: 2015

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Abstract: Although the United States is regarded as having a well-developed and deep financial system, financial inclusion continues to be a challenge for many communities and households. Using four databases with over 4 million data points and a Principal Component Analysis (PCA) methodology, we developed the Financial Inclusion Metropolitan Index (FIMI) for 251 Metropolitan Statistical Areas, to help us identify the main determinants behind financial inclusion. The results from the multi-dimensional index (FIMI) show that technology is the most important contributor to financial inclusion in U.S. metropolitan areas, specifically mobile, internet and computer access, as well as digital account access and use. Results from a separate individual-level analysis confirm the importance of technology, race, citizenship and inequality as key determinants of financial inclusion in the U.S. However, we also find that they are less apt at explaining other financial outcomes such as uptake of savings accounts, being a lasting participant of formal financial sector or using alternative financial services.

Url: https://www.bbvaresearch.com/wp-content/uploads/2015/07/WP15-25_FinancialInclusion_MSA.pdf

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Authors: Karp, Nathaniel; Nash-Stacey, Boyd W.

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Publication Number: 1525

Institution: BBVA

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Publisher Location: Alabama

Data Collections: IPUMS USA

Topics: Methodology and Data Collection

Countries: United States