Impact of Financial Literacy on Fintech Adoption: The Role of Digital ‎Literacy and Cybersecurity Awareness in A Two-Stage SEM-ANN Model

Abstract

This study introduces a novel approach to understanding the impact of financial literacy on ‎Fintech adoption by constructing a comprehensive framework that aligns with the OECD ‎definition of financial literacy, which encompasses three core dimensions: financial attitude, ‎financial knowledge, and financial behavior. The study focuses on households in Rajasthan, ‎India, and explores how these components of financial literacy influence the use of digital ‎financial tools, including peer-to-peer lending, digital payments, investment apps, and broader ‎Fintech solutions. Using a reflective second-order Structural Equation Model (SEM) approach, ‎the research tests the relationships between financial literacy and Fintech adoption, providing a ‎more nuanced understanding of their interconnection. Additionally, the study incorporates ‎digital literacy and cybersecurity awareness as sequential mediators, highlighting their role in ‎bridging financial literacy and Fintech adoption. All path coefficients in the SEM model were ‎found to be statistically significant, and the results were further validated using an Artificial ‎Neural Network (ANN) model to capture non-linearity. This study contributes to the field by ‎developing a robust measurement tool for assessing the impact of financial literacy, digital ‎literacy, and cybersecurity awareness on Fintech adoption, offering valuable insights for ‎policymakers and future research on enhancing digital financial inclusion in emerging markets‎.