Open banking and digital financial inclusion: Early evidence

Using a large panel of countries, we study whether open-banking adoption expands digital financial inclusion. Applying difference-in-differences methods, we find that open banking increases the share of adults making or receiving a digital payment, with the largest effect among less-educated adults. We find, however, no statistically significant effect of open banking on the number of mobile/internet banking transactions per 1000 adults. One interpretation of our results is that open banking benefits may accrue through non-bank channels to those who previously did not use digital means of payment. • First cross-country evidence on open banking and digital financial inclusion. • Open banking has no significant effect on digital banking transactions per 1000. • Open banking adoption increases digital payment participation. • Gains are concentrated in less-educated adults.