CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
In the rapidly evolving landscape of financial technology, digital banking has emerged as a transformative force, not only streamlining traditional banking services but also reshaping the way individuals manage their finances. One crucial aspect that digital banking has the potential to influence is the savings culture among consumers. The shift towards digital banking platforms offers a unique opportunity to revive and strengthen the savings culture, as it introduces innovative features, personalized insights, and convenient tools that empower individuals to take control of their financial well-being. Hanna, R. (2017).
Digital banking platforms enable users to effortlessly track their spending, set savings goals, and receive real-time updates on their financial activities. This increased visibility and transparency into one's financial habits serve as powerful motivators for individuals to adopt disciplined savings practices. Furthermore, the integration of artificial intelligence and machine learning in digital banking allows for personalized recommendations and financial planning assistance, helping users make informed decisions about their savings strategies. The accessibility of these tools on mobile devices ensures that individuals can easily manage their savings anytime, anywhere, fostering a more dynamic and responsive approach to personal finance. World Bank. (2018).
As we explore the potential of digital banking to revive the savings culture, it is essential to consider the broader societal impact. Research studies have shown that digital financial tools can contribute to financial inclusion by providing services to underserved populations, ultimately promoting economic stability and growth (Hanna, 2017; World Bank, 2018). Additionally, the gamification elements often integrated into digital banking apps have been found to enhance user engagement and motivation, encouraging sustained participation in savings activities (Chen et al., 2020). This suggests that the intersection of technology and finance has the potential not only to reshape individual savings behaviors but also to contribute to a more financially resilient and inclusive society.Top of Form
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1.2 Statement of the Problem
The decline in traditional savings culture poses a significant societal challenge as individuals increasingly face financial uncertainties. With the advent of digital banking, there exists a potential solution to this problem, but it is crucial to understand the current obstacles hindering the revival of a robust savings culture through these technological advancements. One major issue is the lack of financial literacy among users, as many individuals may not fully comprehend the features and tools available on digital banking platforms or how to leverage them effectively for savings purposes. Additionally, concerns about privacy and security in the digital realm may deter some individuals from embracing these platforms for their savings, highlighting the need for enhanced education and trust-building measures within the digital banking sector. Hanna, R. (2017).
Furthermore, the prevalence of instant gratification and impulsive spending habits in today's consumer culture poses a significant hurdle to fostering a disciplined savings mindset through digital banking. The ease of access to funds and seamless transactions facilitated by digital platforms may inadvertently contribute to a culture of immediate consumption, overshadowing the long-term benefits of savings. Addressing these behavioral challenges requires a nuanced approach that combines technological innovation with targeted educational initiatives to reshape user attitudes and habits, ultimately fostering a renewed emphasis on savings within the context of digital banking. World Bank. (2018).Top of Form
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1.3 Objectives of the Study
The main objective of the study is to examine Reviving Savings Culture through Digital Banking Specific objectives of the study are:
- 1. To identify and analyze the key features of digital banking platforms that can effectively encourage and incentivize saving behavior.
- 2. To assess the role of financial literacy and accessibility in shaping the effectiveness of digital banking for promoting savings.
- To evaluate the long-term sustainability and impact of using digital banking as a tool for reviving savings culture.
1.4 Research Questions
To guide the study and achieve the objectives of the study, the following research questions were formulated:
- 1. Which functionalities or features within digital banking platforms demonstrably lead to an increase in the frequency and amount of money saved by users?
- 2. To what extent do factors like income level, financial literacy, and digital literacy moderate the effectiveness of digital banking in promoting savings among different user groups?
- Does the adoption of digital banking for savings lead to positive long-term financial outcomes such as debt reduction, increased emergency savings, and higher investment rates?
1.5 Research Hypothesis
The following research hypothesis was developed and tested for the study:
Ho: There is no statistical significant relationship between Reviving Savings Culture and Digital Banking.
1.6 Significance of the Study
The study is important for many reasons. The following are the major stakeholders this paper through its practical and theoretical implications and findings will be of great significance:
Firstly, the paper will benefit major stakeholders and policy makers in the Economics sector. The various analysis, findings and discussions outlined in this paper will serve as a guide in enabling major positive changes in the industry and sub-sectors.
Secondly, the paper is also beneficial to the organizations used for the research. Since first hand data was gotten and analysed from the organization, they stand a chance to benefit directly from the findings of the study in respect to their various organizations. These findings will fast track growth and enable productivity in the organisations used as a case study.
Finally, the paper will serve as a guide to other researchers willing to research further into the subject matter. Through the conclusions, limitations and gaps identified in the subject matter, other student and independent researchers can have a well laid foundation to conduct further studies.
1.7 Scope of the Study
The study is delimited to Piggy Vest. Findings and recommendations from the study reflects the views and opinions of respondents sampled in the area. It may not reflect the entire picture in the population.
1.8 Limitations of the Study
The major limitations of the research study are time, financial constraints and delays from respondents. The researcher had difficulties combining lectures with field work. Financial constraints in form of getting adequate funds and sponsors to print questionnaires, hold Focus group discussions and logistics was recorded. Finally, respondents were a bit reluctant in filling questionnaires and submitting them on time. This delayed the project work a bit.
1.9 Organization of the Study
The study is made up of five (5) Chapters. Chapter one of the study gives a general introduction to the subject matter, background to the problem as well as a detailed problem statement of the research. This chapter also sets the objectives of the paper in motion detailing out the significance and scope of the paper.
Chapter Two of the paper entails the review of related literature with regards to corporate governance and integrated reporting. This chapter outlines the conceptual reviews, theoretical reviews and empirical reviews of the study.
Chapter Three centers on the methodologies applied in the study. A more detailed explanation of the research design, population of the study, sample size and technique, data collection method and analysis is discussed in this chapter.
Chapter Four highlights data analysis and interpretation giving the readers a thorough room for the discussion of the practical and theoretical implications of data analyzed in the study.
Chapter Five outlines the findings, conclusions and recommendations of the study. Based on objectives set out, the researcher concludes the paper by answering all research questions set out in the study.
REFERENCES
Hanna, R. (2017). The Impact of Digital Financial Services in Developing Countries: A Review of Evidence. Journal of Economic Literature, 55(4), 1486–1544.
World Bank. (2018). The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution. Retrieved from https://globalfindex.worldbank.org/
Chen, J., Lyu, Y., & Liu, D. (2020). Gamification in financial services: A literature review. International Journal of InformationManagement,50,151 doi:10.1016/j.ijinfomgt.2019.09.005
McKinsey & Company. (2018). The age of digital banking: A comprehensive guide to understanding digital banking transformation.
Deloitte. (2019). Digital Banking Maturity 2019.
