Data-driven analysis of the sustainability of digital banking and mobile money based on EU countries

Abstract While the European Union generally has a significant amount of financial penetration, the levels differ widely, especially in the eastern and southern areas of the EU, where there is poorer financial literacy and more limited opportunities for extensive digital banking solutions. This research examines this nuanced panorama, using OLS, Ridge Regression, and random forest model evaluation to consider the impact of digital financial inclusion on poverty reduction and sustainable economic development across a range of EU countries from 2011 to 2021. We can build a comparative modelling evaluation using innovative models to examine this complex relationship in a unique and meaningful context, allowing for an analysis of digital financial inclusion with the socio-economic and political characteristics of different EU member states. The findings can provide key policy implications for making digital financial solutions useful as a means of poverty reduction and equal development across EU countries.