The mediating role of financial literacy and the moderating role of financial technology in the relationship between financial education and students’ financial behavior

Abstract

The study aims to measure the financial literacy as mediator in the effect of financial education on financial behavior for accounting students and moderated by financial technology. Despite financial education being one of the most positively accepted factors that can influence responsible financial behavior, the explanation of these relationships has causally remained obscure. The present study aimed to provide a more clear understanding of this influence pathway in the context of unprecedented digital innovation speed. A quantitative study has been conducted, in which data was collected from 382 students of accounting from Medan city. Partial Least Squares-Structural Equation Modeling was used for the data analysis. The study concluded that financial literacy fully and significantly mediates the financial education-financial behavior relationship, which means that financial education does not have a direct significant effect on financial behavior, while its indirect effect through improved individual financial literacy is positive and full. In addition, the study found that financial technology is positively moderating the relationship between financial literacy and financial behavior, which means that the positive effect of financial literacy on financial behavior is stronger for those individuals with a higher level of financial technology. The theoretical implications of this research enrich our understanding of financial behavior formation models, challenge long-held assumptions about the direct influence of financial education, and emphasize financial literacy as an important prerequisite.