Broadband deployment and access to online banking: Does improved technology facilitate adoption?

This paper analyzes the impact of broadband use on online banking adoption and the contracting of online financial products in Spain between 2010 and 2022. Using survey data on household access to information and communication technologies, we assess whether high-speed broadband access facilitates adoption and whether its use narrows or, rather, reinforces existing socioeconomic divides. Results show that fixed broadband increases the probability of adopting online banking by 11.3 % and of contracting financial products online by 1.3 %. Adoption is positively associated with being male, more educated, employed, and having a higher-income, while it decreases with age. Although broadband promotes overall adoption of online banking, it also amplifies divides, with the middle-aged, better educated, and wealthier groups benefiting most, while women, older adults, and the less educated remain disadvantaged. To strengthen causal inference, we exploit a four-year panel from the same survey and use an instrumental variable strategy based on lagged broadband coverage, which confirms the positive causal effect of broadband access on adoption. These findings show that broadband expansion stimulates financial digitalization but may also exacerbate inequality, emphasizing the need for complementary digital inclusion policies.