New research reveals that hands-on, repeated use of formal financial accounts boosts trust, savings, and resilience among underserved workers, challenging the focus on access alone in financial inclusion efforts.
Financial inclusion is often discussed as a question of access, but new research suggests that access by itself is only part of the story. Emily Breza, Martin Kanz and Leora Klapper, writing in the Journal of Finance, find that people who are newly brought into formal financial systems often need repeated, hands-on use before they become comfortable enough to rely on digital accounts in everyday life. Their work focuses on workers who received wages directly into payroll accounts, allowing the authors to separate simple account ownership from actual, repeated engagement.
The distinction matters because many people who are offered bank accounts or mobile money wallets do not use them consistently. Research highlighted by Harvard Kennedy School has found that financial education alone often has limited effect on opening accounts, while small changes in cost can have a much stronger impact on whether people join the formal system in the first place. The U.S. Government Accountability Office has also warned that fintech products aimed at underserved consumers can create confusion, especially where fees, disclosure and regulatory treatment are unclear. In that environment, even basic participation can feel risky.
Breza, Kanz and Klapper argue that experience itself is a form of education. Workers who received monthly deposits into their accounts became more confident navigating the technology, carried out more transactions on their own and increasingly avoided intermediaries that charged unauthorised fees. According to the paper, trust rose as people used the accounts more often, with the sharpest gains in mobile money, where initial confidence was lower than with traditional bank accounts. The authors say the gap in trust between the two types of accounts almost disappeared over time.
The benefits were not limited to convenience. The study found that regular use was linked to larger formal savings balances, greater likelihood of saving at all, lower discretionary spending and better resilience to financial shocks. An audit study cited in the paper also suggested a wider spillover effect: in areas where more workers were using payroll accounts, mobile money agents were less likely to overcharge customers who were inexperienced. That fits a broader pattern seen in other inclusion research, from U.S. account-holding data showing that many households remain outside the banking system because of fees and distrust, to policy work in Nigeria suggesting that account opening alone does not guarantee lasting participation.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
