The Digitalisation of Money and Its Impact on Social Cohesion, Inclusion, and Public Trust in Institutions

Monetary infrastructures and payment systems play a key role in sustaining growth: not only do they allow for smooth exchanges, but they, more importantly, enable us to enter into socio-economic relations. The improvement of these infrastructures over the last century – particularly since the 1990s – has led to significant efficiency gains in which digitalized money has become the general means of payment for daily transactions, while material forms of money, such as cash, have been partly phased out. This process of digitalization is not without societal implications: it has generated new forms of inequality and social exclusion in addition to threatening institutional confidence and social trust.

Not having access to all of the available means of payment – for example, digital – can prevent someone from obtaining certain goods and services or from participating in certain socio-economic activities. As payment habits change, new standards are created, and those who are unable to comply with these new standards find themselves excluded. In a general sense, the digitalization of money could lead to a divergence between the "financially fluent", who will benefit from the proliferation of payment tools, and the “financially excluded”, who will find themselves even more on the margins. This could deepen already existing social fractures and ultimately raise questions about the role of policy interventions in safeguarding access to different forms of money and financial services. Beyond its relationship to individuals, money is fundamentally a social institution: it is a shared reference conveying a set of common values. Changes in money, whether technological or not, therefore impact the relationships between individuals and society at large. Today, technological evolutions have the potential not only to disrupt traditional financial actors but also to reduce the role of States themselves, bringing questions around social cohesion and citizenship to the forefront. It is not yet known if new forms of money can better address the needs of the general public and, in particular, of the most vulnerable, while also preserving the public good nature of money.

In his AXA Fellowship, Dr Tristan Dissaux will identify and document the impact the digitalization of money has on inclusiveness and social cohesion. He will assess how the general population currently uses and perceives payment tools, with a particular focus on vulnerable groups, such as lower-income or over-indebted individuals, the elderly, homeless people, and migrants. The methods will include quantitative research, such as national surveys to understand the statistical representation of the uses and perceptions of digital monies, and qualitative, focus-groups and semi-structured interviews to assess the impacts of digital monies from the user’s point of view. Accordingly, the study will cover the full range of issues associated with the digital transformation of money, cutting across fields that are usually studied separately and covering a range of actors that usually belong to different spheres of research from users to professionals and official representatives.

Ultimately the aim of the project is to propose relevant policy recommendations for financial actors and monetary authorities.

February 2022

Learn more about Tristan Dissaux's research project

The Social Role of Money in an Age of Digitalization

The Digitalisation of Money and Its Impact on Social Cohesion, Inclusion, and Public Trust in Institutions

Learn more about Tristan Dissaux's research project

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