Application of Akim’s Model - Voluntary Insurance for Rapid Growth-trend of E-banking Transactions in Canadian-Economy: Seeking Officials Attentions

Application of Akim's Model in Digital-banking Services of Canadian Economy

Abstract

The Bank of Canada (BoC) has been speeding up its efforts for positively influencing ebanking growth-trends in economy and finance for few years now where the innovations of banks & fintech are contributing significantly. However, effective protection and lack of competition that comes with it, have resulted banks to be behind innovation comparing it to that of many developed countries. Here probable customers are still concerned about psychological and emotional risk-factors that are becoming barriers to the growth-trends of ebanking services in Canadian economy. To marginalize the dilemma, attaching Voluntary Insurance (VI), known as Akim’s Model in literature, as a product in e-banking services can ensure secured digital-transaction services. As methodology used in this study, it is academically shown that adding the VI as a product and its increasing value will keep banking-businesses be growing. Here Welfare Analyses are used as guidance for policy design ensuring efficiency cost of competitive pricing of insurance so that the VI becomes appealing to party(s) involved. In case of bank service-provider, adverse selection in insurance market, welfare cost of inefficient pricing is quantitatively small and advantageous selection results the opposite. It can ensure risk-free e-banking in Canadian economy soon. Historical growth trends of Canadian e-banking services ratify that addition of a new legal product will contribute improving society beyond just gratification of consumers. Thus, once the VI policy is in place, which is well suitable under BoC policies and the 2024 Canadian federal budget introduced mandates, it will spread from bankers to customers. It will marginalize the strength of psychological & emotional factors of probable customers. It will serve as the positive results of innovations and of main motivating factors in the adoption process. So, its growth trend (S-curve) will capture the growth of revenue against time. This growth will be slow at the beginning but at some point, e-banking users will begin to demand
it. Thus, it will ensure a higher number of transactions than that are today in e-banking service-market of Canada. Here the motivation & efforts of the BoC are the pre-requirements for ensuring Canadians to be cashless society soon.