Digital Financial Access and Financialization: Panel Evidence from the Selected Countries in Asia-Pacific Region

Financialization describes how a nation's financial sector has grown and has become significant in relation to the total economy. It denotes the depth, accessibility, and effectiveness of financial institutions and financial markets. Digital transformation is needed for financialization, especially in digital finance focused on mobile and online financial transactions. Financial inclusion and financialization can be accelerated through innovation involving financial technology companies and modern technologies. Few studies have been conducted on how digital finance might improve financialization in emerging economies, which are known for having lower levels of financial development. The present paper focuses on the effect of digital financial access on financialization in Asia-Pacific region. In addition, financialization of savings in India in the last decade was analysed. The data was collected from International Monetary Fund and Reserve Bank of India for the period from 2012 to 2022. The number of ATMs per 100,000 adults and number of debit cards per 1000 adults affects financialization. Value of mobile and internet banking transactions as percentage of GDP is positively associated with development of financial institutions. Singapore leads in financialization followed by Malaysia, Thailand, India, and the Philippines. India can now compete with its rivals due to a high rate of internet penetration, but it needs to encourage the use of electronic payments, increase the number of ATMs in remote and rural areas, and encourage the use of debit cards or online payments.