ACCI Conference 2024

Digital financial literacy is an emerging concept that refers to the knowledge, skills, and abilities required for safe and efficient use of digitally delivered financial services. In this study, we aim to examine how digital financial literacy influences the adoption of digital financial services in South Korea, and whether users derive benefits from such services. Following the literature, digital financial literacy is conceptualized as a joint construct of financial knowledge and four domains of digital literacy related to digital finance. Using online survey data from 1587 adults, this study shows that digital financial literacy is associated with a higher likelihood of adopting digital platforms for banking, loans, stock investing, insurance, utility, payment, and credit card management. Further analyses find that digital financial literacy is linked to increased access to finance through digital platforms, reduced costs or fee waivers when using digital financial services, and informational benefits such as service recommendations and payment due reminders. When financial knowledge and digital literacy were modeled separately, the effects of digital literacy were generally greater than the effects of financial knowledge. Overall, our findings highlight the prominent role of digital financial literacy in promoting financial inclusion in the digital age.

Author(s): Youngjoo Choung, Tae-Young Pak, Swarn Chatterjee, Jung-Hyun Park