Digital financial literacy among adults in India: measurement and validation

Abstract

The ongoing COVID-19 pandemic has considerably promoted the usage of Digital Financial Services (DFS) in India. Therefore, exploring the various determinants influencing the DFS users is crucial for the DFS providers to understand their customers better. This study aims to identify, measure, and validate the determinants of Digital Financial Literacy (DFL) from the Indian adults who use Digital Financial Services. A sample of 384 adult DFS users from India was surveyed using a self-administered questionnaire in 2021. A multidimensional scale was developed to measure the Digital Financial Literacy in this study. The results exhibit that Digital Knowledge, Financial Knowledge, Knowledge of DFS, Awareness of Digital Finance Risk, Digital Finance Risk Control, Knowledge of Customer Right, Product Suitability, Product Quality, Gendered Social Norm, Practical Application of Knowledge and Skill, Self-determination to use the Knowledge and Skill and Decision Making are the determinants of DFL among the adults in India. Further, the users of DFS without DFL will face numerous challenges such as inability to complete the transaction, financial loss and privacy breach, etc. Hence, the study concludes that DFL is prerequisite to use DFS effectively.

Keywords:

• Financial services
• educational finance
• digitization
• financial innovation and inventions and financial technology

Data Availability

The data that support the findings of this study are available from the corresponding author(s) upon reasonable request.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

No funding is received for this research.

Notes on contributors

T Ravikumar

Ravikumar T, Ph.D. is an Associate Professor of Finance in the School of Business and Management, CHRIST (Deemed University), Karnataka, India. He completed his Ph.D. at Bharathiar University, Tamil Nadu, India. He has vast experience in academics and research. He published numerous articles in the indexed journals of national, and international repute. Furthermore, he published two books and presented research articles at many conferences. This article is a part of Digital Financial Services Adoption and Digital Financial Inclusion Project.