Cybersecurity and financial inclusion: insights from GCC countries

Abstract

The rapid adoption of digital technologies has transformed access to financial services, yet it has also increased cybersecurity risks, which may hinder inclusive financial participation. This study examines the role of national cybersecurity capacity in promoting both formal and informal financial inclusion in GCC countries from 2014 to 2021. It investigates how overall cybersecurity readiness and its key components, organizational measures and capacity building, affect access to and usage of financial services. Using panel data regressions with OLS, fixed effects, and system Generalized Method of Moments (GMM), the analysis finds that improvements in cybersecurity, particularly in organizational and capacity building dimensions, significantly enhance formal financial inclusion while reducing reliance on informal financial practices. The novelty of this study lies in its comprehensive assessment of multiple cybersecurity dimensions and their distinct effects on both formal and informal financial inclusion. The findings offer clear policy implications, emphasizing that strengthening national cybersecurity frameworks and institutional capacities can foster safer and more inclusive financial systems across the GCC region.