Determinants of digital financial literacy from students’ perspective

Abstract

In Malaysia, there has been an increase in bankruptcy cases among the younger generation, indicating poor money management among youths. The Coronavirus Disease 2019 (COVID–19) outbreak has exacerbated this emerging financial issue since financial transactions are now more accessible through the growth of online digital financial products and services (DFS) (Mansour, 2022). Therefore, it is crucial that the younger generation is financially literate from the digital perspective — digital financial literacy (DFL). This study identified factors that may affect one’s DFL that have not been previously explored in the financial literacy literature. In a survey that involved 183 Malaysian university students, determinants of DFL were identified, namely: financial knowledge score (FKS), programme or study level (PL), gender, age, as well as parental influence (PRI), peer influence (PEI), and social media influence (SMI). The data were analysed using partial least squares (PLS) modelling. The structural model analysis revealed that FKS and SMI positively impacted DFL, highlighting the importance of social media for financial education. Age had an insignificantly negative effect on DFL, contradicting earlier studies that used age as a proxy for financial experience. This research outcome adds to the existing and growing literature on DFL, which has lately gained prominence due to the proliferation of DFS.