Why Digital Banking Alone Does Not Close the Gender Gap

Introduction

Digital banking is often seen as a solution to financial exclusion. Mobile apps, online payments, and digital wallets are expected to make financial services easier to access (World Bank, 2022). Many countries are investing heavily in digital finance for this reason. However, my experience as a banker and my academic research show that digital banking alone does not ensure equal financial access, especially for women (Demirgüç-Kunt et al., 2021).

I was born in Pakistan and have been working in the banking sector since 2016. Through my professional experience, I have seen how access to financial services differs across gender, income levels, and regions. While digital banking has improved efficiency and reduced costs, many people—especially women—still face barriers to entering the formal financial system (GSMA, 2023). These observations motivated me to study financial inclusion in more depth.

This blog is based on my master’s thesis, Structural Sources of Gendered Financial Inclusion: A Comparison of Pakistan and Finland, completed in the MBA Digital Business and Management programme at Novia University of Applied Sciences. The main finding of the research is that financial inclusion depends on institutions, social conditions, and gender equality, not only on technology (OECD, 2020).

What Financial Inclusion Means

Financial inclusion means that people can use basic financial services such as bank accounts, savings, payments, and credit (World Bank, 2018). These services help people manage daily expenses, deal with unexpected costs, and plan for the future.

When people are excluded from the financial system, their economic opportunities are limited. Women are more likely to face this exclusion, especially in developing countries (UN Women, 2022). In Pakistan, women are much less likely than men to own a bank account or use digital financial services (World Bank, 2022).

Research Focus

The thesis focuses on Pakistan and studies financial inclusion separately for women and men. This is important because the same factors do not affect everyone in the same way (Demirgüç-Kunt et al., 2021).

The study examines how the following factors influence financial inclusion:

• Access to financial institutions
• Internet access and digital infrastructure
• Employment and education
• Gender equality

Finland is used as a comparison country because it has very high levels of financial inclusion and a well-developed digital banking system (OECD, 2020).

Findings from Pakistan

The results show clear differences between women and men.

Women

For women in Pakistan, financial inclusion depends mainly on basic access. This includes access to banks, internet availability, digital infrastructure, better gender equality, and employment opportunities (GSMA, 2023). These factors help women enter the financial system.

If these conditions are missing, digital services are difficult to use. Many women lack smartphones, internet access, digital skills, or official identification (World Bank, 2022). Without these basics, digital banking does not improve access.

Men

For men, financial inclusion is influenced more by physical bank branches, household income, and the use of mobile payments and digital services (Demirgüç-Kunt et al., 2021). Men generally adopt digital financial tools more easily once they are available. They face fewer social and institutional barriers (OECD, 2020).

Digital Banking and Inequality

The shift from physical banking to digital banking affects women and men differently. When bank branches close and services move online too quickly, women are more likely to lose access (World Bank, 2018).

Digital systems often reflect existing inequalities. If women already face barriers related to education, income, or mobility, digital finance does not remove these barriers (UN Women, 2022). In some cases, it can make them more visible.

This does not mean digital banking is negative. It means that digital solutions must be introduced carefully and supported by strong institutions and inclusive policies (OECD, 2020).

What Finland Shows

Finland provides a useful comparison. Almost everyone in Finland uses digital banking, and gender differences in financial access are very small (OECD, 2020).

This success is not only due to technology. Finland also has strong institutions, secure digital identity systems, high levels of financial and digital literacy, and strong gender equality in education and work (European Commission, 2021). People trust financial institutions and know how to use digital services.

Lessons from the Comparison

The comparison between Pakistan and Finland highlights several lessons:

• Digital banking should support, not replace, physical access (World Bank, 2018).
• Simple and secure identification systems are necessary (OECD, 2020).
• Financial and digital literacy are important for using digital services (GSMA, 2023).
• Gender equality must be part of financial policy (UN Women, 2022).
• Financial inclusion cannot be achieved through technology alone. Social and institutional conditions must also improve.

Conclusion

This research shows that financial systems are shaped by social and institutional factors. Digital tools can support inclusion, but they do not solve deeper inequalities on their own (Demirgüç-Kunt et al., 2021).

To make digital finance work for everyone, countries must focus on access, education, and equality. Financial inclusion requires long-term effort, not quick technical solutions.

For Further Reading

Demirgüç-Kunt, A., Klapper, L., Singer, D., Ansar, S., & Hess, J. (2021). The Global Findex Database 2021: Financial inclusion, digital payments, and resilience in the age of COVID-19. World Bank.

Thesis Blog Post

MBA, Digital Business and Management

Novia University of Applied Sciences

Author: Shahid Mehmood

Supervisor: Outi Ihanainen-Rokio

Degree Programme: Master of Business Administration (MBA)

Specialisation: Digital Business and Management

Year: 2025