DIGITAL FINANCIAL LITERACY AND FINANCIAL BEHAVIOR: HOW FINANCIAL CONFIDENCE AND DIGITAL FINANCIAL RISK AWARENESS SHAPE FINANCIAL DECISION-MAKING

Iqra Sonam; Muhammad Hafeez; Mirza Nasir Jahan Mehdi; Muhammad Tayyab Tahir

doi:10.59075/jsrd.v7i7.501

Authors

Iqra Sonam Institute of Business Management Sciences, University of Agriculture, Faisalabad, Pakistan
Muhammad Hafeez Institute of Business Management Sciences, University of Agriculture, Faisalabad, Pakistan
Mirza Nasir Jahan Mehdi Department of Management Sciences, Muslim Youth University, Islamabad, Pakistan
Muhammad Tayyab Tahir National Business School, The University of Faisalabad, Pakistan

DOI:

https://doi.org/10.59075/jsrd.v7i7.501

Keywords:

Digital Financial Literacy, Financial Behavior, Financial Confidence, Digital Financial Risks, Banking Sector

Abstract

The present research work investigates the digital financial literacy and financial behaviour based on mediating effects of financial confidence and awareness/attitude of digital financial risks in Faisalabad, Pakistan. By applying the Financial Capability Theory, structured questionnaire distributed to 500 customers of banking sector, who are using digital applications, 475 were returned, and 445 valid surveys were taken to provide the final analysis. The results infer that digital financial literacy plays a significant positive role in the financial behavior of adults, financial confidence, and awareness/attitude to digital financial risks. The findings also indicated that financial confidence and awareness/ attitude towards digital financial risks both have significant positive impacts on the financial behavior of adults and also mediate the relationship between digital financial literacy and the financial behavior of adults significantly. The research adds to the literature by applying Financial Capability Theory to digital financial contexts and provides practical implications to banks, fintech providers, policymakers and financial educators in a bid to encourage healthier financial behavior by developing digital financial capability.