The relationship between financial innovation and financial inclusion remains an underexplored area in economic research, despite ongoing debates about the interconnectedness of these two critical factors. Financial innovation, characterized by the development and adoption of new financial products, services, and technologies, has the potential to significantly enhance financial inclusion by improving access, affordability, and convenience of financial services. However, empirical evidence on how these innovations directly influence the extent and quality of financial inclusion across different economies, particularly among the G20 countries, is limited. This study examines the relationship between financial innovation and financial inclusion within the context of G20 countries. To attain the objective, the paper constructs a Financial Inclusion Index (FII) to provide a comprehensive view of financial inclusion. Similarly, the Financial Innovation is measured using a financial innovation index computed by means of internet accessibility and mobile accessibility by following PCA method. In pursuit of the studys goals, it utilizes secondary data spanning from 2014 to 2022, which was obtained from the World Bank and the IMF Financial Access Survey (FAS). The findings reveal a significant relationship between financial inclusion and innovation among the G20 nations. The result also reveals that financial innovation positively impacts financial inclusion. However, the findings are limited to examining the nexus between financial inclusion and financial innovation within selected G20 countries. As an original contribution to the field, this research encompasses various dimensions that previous authors have considered. This study addresses this gap by examining the empirical nexus between financial innovation and financial inclusion, aiming to provide insights into how technological advancements shape financial accessibility and inclusion outcomes in diverse economic contexts.
Saha et al. (Fri,) studied this question.