A Study on Digital Financial Services and Financial Planning Among Young Adults

Author

Mohan Krishna , Induri Harshitha

Abstract

 Digital financial services (DFS) are now the middle of payments, saving and investing functionality for young adults — but it's not obvious whether they have to do with deliberate financial planning. This study aims to understand the relationship of awareness, accessibility and convenience of DFS along with financial literacy of young adults in Vijayawada, India with respect to investment planning. Structured questionnaire of 15 five-point Likert items was used for primary data collection and 136 respondents (98% were 18-22 years old; 85% were students) were surveyed. The computer software used for chi-square tests, one-way ANOVA and multiple linear regression was Microsoft Excel. The biggest usage was for UPI apps with 85% adoption rate, with 57% of respondents using a maximum of one type of their service. Usage diversity differed by gender (χ²(1) = 8.93, p = .003) and occupation (χ²(1) = 7.17, p = .007). The scores for accessibility and convenience differed between genders (η² = .10-.28). Among the four DFS conditions (accessibility and convenience, awareness, types of the application used, financial literacy), accessibility and convenience was the most significant predictor of investment planning in regression (β = .75, p < .001; model R² = .59); financial literacy interacted with the DFS–investment planning link (interaction p = .016), the number of DFS types used was marginal (p = .056), and the link between awareness and planning to invest was not significant (p = .053). The accessibility result and the income and occupation gradients were also verified by a sensitivity analysis of the 53 unique response patterns, although the sensitivity results for the average literacy and gender-usage or moderation results did not support this. The study findings indicate that using or being aware of is not a strong predictor of young adult usage; the most important correlate of usage relates to access. The limitations include use of a convenience sample and self-reported cross sectional data/duplicated response patterns in the data.

Keywords

Digital financial services, financial planning, financial literacy, investment planning, young adults, UPI in India.

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References

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