Challenges and opportunities for consolidating the availability of financial services in Romania

Abstract

This research paper addresses the need to achieve a higher financial inclusion and the challenges to a higher adoption of digital payments in Romania, while decreasing the use of cash, related to the physical infrastructure and regional disparities, financial intermediaries, consumer preference and financial education, by conducting a descriptive research, using quantitative and qualitative analysis of secondary data. The study highlights the current infrastructure, some relevant legislation implications and the population’s payment habits and perception. We presented some opportunities provided by European funding and digital technologies in increasing accessibility, consumer confidence and a higher adaptability of payment serices to meet consumers’ needs and expectations, addressing the developments made in Romania, the limitations of implementing a cash-less economy which would need to include the on-boarding of all disadvantaged groups as well, potential risks related to cyber-security and cyberresilience and possible public policy implications to eliminate gaps in digital literacy, the level of financial education, cybersecurity awareness and the need for public-private coordinated pro-inclusion measures. The conclusions of this research could be used by authorities, by the banking sector and by FinTech companies, to tackle reaching the optimal balance between public intervention and private initiative for increasing financial inclusion, taking the national context into account.