Impact of digital financial inclusion on ASEAN banking stability: implications for the post-Covid-19 era

Purpose This paper aims to investigate how digital financial inclusion (DFI) can be a potential factor maintain banking stability in Association of Southeast Asian Nations (ASEAN) countries and whether the relationship could bring possible implication for post-Covid-19 pandemic era. Design/methodology/approach Using an unbalanced panel data 213 banks 4 ASEAN countries, study has deployed principal component analysis, ordinary least square, two-step dynamic system generalised method moments corrected standard errors techniques. Findings The empirical finds that full-fledged application DFI accelerates which not only decreases default risk but also upturns mobility region. results suggest are, with implementation DFI, likely uphold sector by reducing liquidity crisis non-performing loans during Therefore, accelerating finance is considered as one significant means subsequently leads economic resilience even face any crises. Originality/value Prevailing studies have mostly investigated association between different contexts. However, this unique empirically stability.