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The Role of Financial Literacy in Modern Finance
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The Role of Financial Literacy in Modern Finance

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Economics and Finance".

Deadline for manuscript submissions: 31 July 2026 | Viewed by 15832

Special Issue Editors

Dr. Minxing Sun

E-Mail Website
Guest Editor
Mike Cottrell College of Business, University of North Georgia, Gainesville, GA 30504, USA
Interests: empirical corporate finance
Dr. Maryna Murdock

E-Mail Website
Guest Editor
Mike Cottrell College of Business, University of North Georgia, Dahlonega, GA 30597, USA
Interests: corporate finance; financial institutions

Special Issue Information

Dear Colleagues,

We invite you to contribute to this Special Issue of JRFM, dedicated to the role of financial literacy in modern finance.

Rational behavior is a crucial assumption in financial theory; however, as economic agents are human, their decision-making may be flawed due to psychological and behavioral biases. Predictions of financial outcomes need to be corrected for these biases, and the corrections will be larger to the extent that decision makers lack financial literacy. 

It is difficult to overstate the importance of financial literacy, as it contributes to individuals’ and households’ economic mobility, businesses’ survival rates and value maximization, and the viability of public policy. These outcomes combine to have a non-negligible effect on market behavior and the overall functioning of the economy.

This Special Issue will extend the existing literature by exploring how financial literacy and financial education influence individual and household decision-making, corporate and institutional financial well-being, financial policy, market behavior, and the overall functioning of economies.

Topics of interest include the following:

  • Individual and household decision-making: the impact of financial literacy and education on individual and household behavior, including saving, borrowing, investment, and retirement planning.
  • Corporate and institution financial well-being and financial policy: the role of financial literacy and education in shaping corporate and institutional financial decisions, governance, and policies.
  • Market behavior: the impact of financial literacy and education on market behavior, such as price movements, market efficiency, and investor sentiment.
  • Overall functioning of economies: the effect of financial literacy and education on the broader financial system, labor market, and innovation as well as technology.

Dr. Minxing Sun
Dr. Maryna Murdock
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 250 words) can be sent to the Editorial Office for assessment.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1600 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • financial literacy
  • financial education
  • individual and household decision-making
  • corporate and institution financial well-being
  • market behavior
  • overall functioning of economies

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Further information on MDPI's Special Issue policies can be found here.

Published Papers (5 papers)

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Research

14 pages, 268 KB  
Article
Trust in Financial Technology: The Role of Financial Literacy, Digital Financial Literacy, Technological Literacy, and Trust in Artificial Intelligence
by Thomas A. Hanson and Caleb Ott
J. Risk Financial Manag. 2026, 19(2), 97; https://doi.org/10.3390/jrfm19020097 - 2 Feb 2026
Viewed by 2316
Abstract
This study examines the relationships among financial literacy, digital financial literacy, technological literacy, and trust in artificial intelligence (AI) as predictors of consumer trust in fintech applications involving robo-advisors or chatbots. A sample of 117 college students responded to an online survey with [...] Read more.
This study examines the relationships among financial literacy, digital financial literacy, technological literacy, and trust in artificial intelligence (AI) as predictors of consumer trust in fintech applications involving robo-advisors or chatbots. A sample of 117 college students responded to an online survey with scales designed to measure these constructs. Results confirmed that the three literacy measures were significantly correlated, reflecting their overlapping knowledge and cognitive perspective. However, trust in AI showed no significant correlation with any literacy measure, and regression analysis revealed that trust in AI was the sole statistically significant predictor of trust in consumer fintech. These findings suggest that fintech adoption is driven largely by trust rather than financial or technological competence, creating potential vulnerabilities when consumers lack the literacy to evaluate AI-generated financial advice. The results highlight the need for financial education programs to integrate fintech alongside traditional literacy topics and suggest a possible role for regulatory reform to support users of fintech. Full article
(This article belongs to the Special Issue The Role of Financial Literacy in Modern Finance)
23 pages, 864 KB  
Article
Influence of FinTech Paylater, Financial Well Being, Behavioral Finance, and Digital Financial Literacy on MSME Sustainability in South Sumatera
by Endah Dewi Purnamasari, Leriza Desitama Anggraini and Faradillah
J. Risk Financial Manag. 2025, 18(12), 682; https://doi.org/10.3390/jrfm18120682 - 2 Dec 2025
Cited by 1 | Viewed by 1795
Abstract
This study examines the influence of FinTech Paylater, Financial Well Being (FW), Behavioral Finance (BF), and Digital Financial Literacy (DFL) on the sustainability of Micro, Small, and Medium Enterprises (MSMEs) in South Sumatera, Indonesia. Using a quantitative explanatory design, data from 563 MSME [...] Read more.
This study examines the influence of FinTech Paylater, Financial Well Being (FW), Behavioral Finance (BF), and Digital Financial Literacy (DFL) on the sustainability of Micro, Small, and Medium Enterprises (MSMEs) in South Sumatera, Indonesia. Using a quantitative explanatory design, data from 563 MSME owners were collected through a structured questionnaire and analyzed using Structural Equation Modeling–Partial Least Squares (SEM–PLS). The results show that FinTech Paylater, FW, BF, and DFL have positive and significant effects on MSME sustainability, with DFL emerging as the strongest predictor. Paylater services support sustainability by improving liquidity and access to short-term financing, while FW enhances financial stability and resilience. BF shapes financial decision-making through behavioral control and risk awareness. The integrated model explains 61% of the variance in MSME sustainability and demonstrates that digital capability and psychological factors jointly determine whether FinTech is used productively or consumptively. The findings provide theoretical contributions to the literature on FinTech and MSME sustainability and offer practical implications for policymakers and FinTech providers in designing targeted Digital Financial Literacy programs and responsible Paylater schemes for MSMEs in emerging economies. Full article
(This article belongs to the Special Issue The Role of Financial Literacy in Modern Finance)
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24 pages, 343 KB  
Article
Government Policies for Promoting Financial and Fiscal Literacy: Evidence from a Questionnaire-Based Study
by Héber Gonçalves, Luís Pacheco and Fernando Oliveira Tavares
J. Risk Financial Manag. 2025, 18(11), 649; https://doi.org/10.3390/jrfm18110649 - 18 Nov 2025
Cited by 1 | Viewed by 1433
Abstract
This paper aims to assess the level of financial and tax literacy among the resident population in Portugal, as well as to evaluate their perception of existing public measures in this field. Financial literacy is a key pillar for individual development and for [...] Read more.
This paper aims to assess the level of financial and tax literacy among the resident population in Portugal, as well as to evaluate their perception of existing public measures in this field. Financial literacy is a key pillar for individual development and for making informed economic decisions. Recent data indicate that Portugal lags behind the European average in this area, underscoring the importance of this research. Using a questionnaire applied to a representative sample of the Portuguese population, the data were analysed through statistical methods. The results reveal a reasonable level of knowledge in areas such as budgeting and saving, but also significant shortcomings in the tax domain. In a global context marked by economic, political, and geopolitical instability, financial literacy stands out as a strategic skill essential for both individual and collective resilience. A lack of competence in this area is linked to poor financial decisions, over-indebtedness, and economic exclusion. The findings underline the need for a more systematic and structured approach to financial literacy in Portugal. This study offers practical recommendations designed to promote a more informed, prepared, and financially inclusive population, thereby contributing to the country’s economic sustainability and development. Full article
(This article belongs to the Special Issue The Role of Financial Literacy in Modern Finance)
21 pages, 683 KB  
Article
Assessing the Relative Financial Literacy Levels of Micro and Small Entrepreneurs: Preliminary Evidence from 13 Countries
by Nikolaos Daskalakis
J. Risk Financial Manag. 2025, 18(5), 283; https://doi.org/10.3390/jrfm18050283 - 20 May 2025
Cited by 1 | Viewed by 5941
Abstract
This study analysed the financial literacy (FL) levels of micro and small entrepreneurs (MSMEs) across 13 countries using data from the 2021 OECD/INFE survey. Focusing on the three core aspects of financial literacy—knowledge, behaviour, and attitudes—our analysis reveals that FL levels tend to [...] Read more.
This study analysed the financial literacy (FL) levels of micro and small entrepreneurs (MSMEs) across 13 countries using data from the 2021 OECD/INFE survey. Focusing on the three core aspects of financial literacy—knowledge, behaviour, and attitudes—our analysis reveals that FL levels tend to vary by enterprise size, with small businesses generally scoring higher than micro-enterprises. Moreover, countries’ performances differ across the three FL aspects, and these differences appear to be component rather than country-specific. This study applied the standardised OECD/INFE methodology, enabling cross-country comparisons of MSME financial literacy. The results identify specific strengths and weaknesses across countries and FL components, providing valuable insights into policy design and educational interventions. For instance, while financial behaviour scores are relatively strong, financial attitude scores are consistently lower, indicating a gap that requires targeted attention. Full article
(This article belongs to the Special Issue The Role of Financial Literacy in Modern Finance)
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22 pages, 1338 KB  
Article
Enhancing Consumer Empowerment: Insights into the Role of Rationality When Making Financial Investment Decisions
by Abhishek Sharma, Chandana Hewege and Chamila Perera
J. Risk Financial Manag. 2025, 18(2), 106; https://doi.org/10.3390/jrfm18020106 - 18 Feb 2025
Cited by 3 | Viewed by 3229
Abstract
With an avalanche of market manipulations and unethical tactics in the Australian financial industry, the empowerment levels of female Australian consumers when making financial investment decisions are highly questionable. Through the theoretical lens of a utilitarian perspective, financial investment decisions are often built [...] Read more.
With an avalanche of market manipulations and unethical tactics in the Australian financial industry, the empowerment levels of female Australian consumers when making financial investment decisions are highly questionable. Through the theoretical lens of a utilitarian perspective, financial investment decisions are often built on the pillars of trust, security, and assurance, which allow consumers to make decisions rationally and gain empowerment when making these decisions. However, due to the widespread manipulations prevailing in Australian financial markets, the role of rationality and its influence on consumer empowerment remain understudied. Based on this context, this paper uncovers the association between how each stage of rational decision-making (RDM) (i.e., demand identification, information search, and the evaluation of alternatives) influences the consumer power (i.e., consumer resistance and consumer influence) of female Australian consumers when making financial investment decisions. In doing so, this study employs a quantitative approach, whereby the proposed conceptual framework is tested among 357 female Australian consumers to understand their decision-making power in the presence of heightened situations of market manipulation in the financial industry. The results show that information search has a significant positive relationship with consumer influence and consumer resistance when making financial investment decisions. Additionally, the findings suggest that female Australian consumers should not only rely on individual-based sources of power but also have exposure to network-based sources of power to gain empowerment when making financial investment decisions. Lastly, it is suggested that government bodies, financial institutions, and regulatory authorities should not only implement financial literacy programs but also promote gender diversity across organisations to encourage women’s empowerment (i.e., Goal 5 (SDGs)—Achieve Gender Equality and Empower all Women and Girls). Full article
(This article belongs to the Special Issue The Role of Financial Literacy in Modern Finance)
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