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Digital Risk and Financial Inclusion: Balance between Auxiliary Innovation and Protecting Digital Banking Customers

Author

Listed:
  • Faraz Ahmed

    (College of Business Management, Institute of Business Management, Karachi 75300, Pakistan)

  • Arsalan Hussain

    (College of Business Management, Institute of Business Management, Karachi 75300, Pakistan)

  • Sajjad Nawaz Khan

    (Department of Business Administration, Iqra University, Main Campus, Karachi 75500, Pakistan)

  • Arsalan Haneef Malik

    (College of Business Management, Institute of Business Management, Karachi 75300, Pakistan)

  • Muhammad Asim

    (EIAS Data Science Lab, CCIS, Prince Sultan University, Riyadh 11586, Saudi Arabia)

  • Sadique Ahmad

    (EIAS Data Science Lab, CCIS, Prince Sultan University, Riyadh 11586, Saudi Arabia)

  • Mohammed El-Affendi

    (EIAS Data Science Lab, CCIS, Prince Sultan University, Riyadh 11586, Saudi Arabia)

Abstract

The digital economy’s rise has fueled the growth of digital banking, but concerns linger about customer protection. While offering advantages like financial inclusion, this shift disrupts traditional banking experiences and introduces potential risks. Customer safety in this new landscape is paramount, as dissatisfied users may switch providers and institutions risk reputational damage. To remain competitive, financial institutions must prioritize a secure experience that aligns with customer expectations. This study investigates five key factors influencing customer protection in Pakistan’s digital financial services. Analysis reveals all factors positively impact customer protection, with information security holding the most weight. These findings highlight the need for robust information security measures as a critical driver for the Pakistani digital banking industry’s success.

Suggested Citation

  • Faraz Ahmed & Arsalan Hussain & Sajjad Nawaz Khan & Arsalan Haneef Malik & Muhammad Asim & Sadique Ahmad & Mohammed El-Affendi, 2024. "Digital Risk and Financial Inclusion: Balance between Auxiliary Innovation and Protecting Digital Banking Customers," Risks, MDPI, vol. 12(8), pages 1-21, August.
    • Handle: RePEc:gam:jrisks:v:12:y:2024:i:8:p:133-:d:1461956
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    References listed on IDEAS

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    1. Muhammad Anshari & Mohammad Nabil Almunawar & Masairol Masri, 2020. "Financial Technology and Disruptive Innovation in Business: Concept and Application," International Journal of Asian Business and Information Management (IJABIM), IGI Global, vol. 11(4), pages 29-43, October.
    2. Mobin Fatma & Imran Khan, 2023. "Impact of CSR on Customer Citizenship Behavior: Mediating the Role of Customer Engagement," Sustainability, MDPI, vol. 15(7), pages 1-11, March.
    3. Usha Thorat, 2008. "Financial Inclusion and Information Technology," Working Papers id:1653, eSocialSciences.
    4. Sara Quach & Park Thaichon & Kelly D. Martin & Scott Weaven & Robert W. Palmatier, 2022. "Digital technologies: tensions in privacy and data," Journal of the Academy of Marketing Science, Springer, vol. 50(6), pages 1299-1323, November.
    5. Florian Diener & Miroslav Špaček, 2021. "Digital Transformation in Banking: A Managerial Perspective on Barriers to Change," Sustainability, MDPI, vol. 13(4), pages 1-27, February.
    6. Tankiso Moloi & Oluwamayowa Olalekan Iredele, 2020. "Risk Management in the Digital Era: The Case of Nigerian Banks," Springer Books, in: Babu George & Justin Paul (ed.), Digital Transformation in Business and Society, chapter 0, pages 229-246, Springer.
    7. Luigi Wewege & Jeo Lee & Michael C. Thomsett, 2020. "Disruptions and Digital Banking Trends," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 10(6), pages 1-2.
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