New research has found that digital banking technology is not improving the financial well-being of the squeezed middle in Ireland, raising questions about the effectiveness of widespread fintech adoption.
Ireland is among Europe’s most digitally connected economies, with fintech adoption rates of 71% compared to the global average of 64%, according to the EY Global FinTech Adoption Index. Yet a study by Cork University Business School at University College Cork (UCC), published in the Journal of Consumer Policy, shows that access to digital banking tools has no measurable impact on the financial health of ordinary households.
The research analysed data from 11,128 Irish households using the Survey on Income and Living Conditions. It found that households in the “squeezed middle”—those between the 20th and 70th income percentiles—see no improvement in financial outcomes despite almost universal access to digital services. Young adults in particular remain in negative financial territory through the 70th income percentile, even though 96.2% have access to digital banking.
Economic pressures in Ireland remain intense. Central Statistics Office data indicates that one in four young women skip meals due to financial concerns, while 84% of adults report anxiety about the cost-of-living crisis. Rising housing costs and employment precarity have left digital financial tools unable to offset fundamental economic challenges.
The study identifies three reasons why technology is failing to deliver better financial outcomes. A “capability mismatch” occurs when consumers lack the skills to use complex financial tools effectively. Economic constraints often override the potential benefits of digital access. And a “satisfaction illusion” means users feel more in control of their finances without actually improving their material conditions, sometimes even increasing spending.
Unexpected findings highlight rural households achieving better financial wellbeing than urban ones despite lower technology adoption. Women demonstrate stronger financial habits yet report lower financial satisfaction and less technology usage than men. Immigrants face the largest technology gap at 40.7%, with persistent financial difficulties despite access.
These results carry implications for consumer policy across Europe. The European Union has invested around €150 billion in digital infrastructure under the Next Generation EU Recovery Fund, assuming expanded access will automatically improve outcomes. Ireland’s experience suggests that access alone is insufficient. Experts argue that preserving non-digital alternatives, developing financial capabilities, addressing structural economic barriers, and evaluating digital services by actual welfare improvements—not usage metrics—are crucial steps.
Professor Tadhg O’Connor, co-author of the study, said: “The digital transformation of financial services is irreversible, yet its design often overlooks the lived experiences of squeezed households. Measuring success by downloads and logins risks missing the real goal: genuine improvements in financial wellbeing.”
The research serves as an early warning for other European countries pursuing aggressive digitalisation strategies, highlighting that technology without supportive policy and skills development may leave millions with access but no real financial advantage.
