Impact of Financial Literacy and Digital Banking Adoption on Financial Well-Being: Mediating Role of Financial Behavior

This study looks into how financial literacy and adoption of digital banking affects financial well-being, and how the mediating factor of financial behavior works. Financial well-being as the condition of being financially stable and content with financial position has become a significant field of research because it has a great impact on the overall health and life satisfaction of an individual. Financial literacy is the knowledge and skill of using the financial concepts and digital banking adoption is the use of mobile banking, web-based banking. This research study postulates that the two constructs of financial literacy and digital banking acceptance have a positive impact on financial well-being with financial behavior acting as an intermediary. The research design is a quantitative research design, which involves the use of survey data of 500 participants who are actively enrolled in digital banking services. The hypotheses are tested through multiple regression analysis and structural equation modeling (SEM) to analyze the data. Findings reveal that financial literacy as well as the use of digital banking strongly positively influences financial well-being. Moreover, the relationship between these independent variables and financial well-being is mediated by financial behavior implying that better financial behaviors, including saving, budgeting, and investing, are important in the connection between financial literacy and digital banking adoption with financial outcomes. These results indicate that financial education and the usage of digital banking services in enhancing financial well-being are important factors. The article sheds light on the potential of financial literacy and technology to collaborate and improve the financial well-being of individuals, which is of great value to a policymaker and financial institutions seeking to foster financial inclusion and security.