The impact of digital financial literacy on financial behavior: customers’ perspective

Abstract

Purpose This study aims to examine the nexus between digital financial literacy and customers’ perceived financial behavior within the Kuwaiti context. Moreover, it will further explore how digital financial literacy relates to financial behavior dimensions. Design/methodology/approach Data collection was facilitated by creating a questionnaire derived from multiple literature sources. This study used a cross-sectional, time-based dimension. Data was analyzed using the partial least square (PLS) structural equation modeling approach, using the Smart-PLS 4 software for computation. Findings Findings demonstrated a significant relationship between digital financial literacy and financial behavior, with a path coefficient of 0.542, a p-value of 0.000 and an R2 value of 0.581. The explorative model revealed substantial relationships between many dimensions of digital financial literacy and various dimensions of financial behavior. More precisely, financial knowledge, awareness and decision-making were the factors that had the most significant impact on financial behavior. Practical implications Kuwaiti policymakers should consider including digital financial literacy programs in comprehensive financial education programs to improve public understanding of digital financial instruments and their consequences. Originality/value As the authors know, this is the initial endeavor to evaluate the relationship between digital financial literacy, financial behavior and their respective dimensions.