CHAPTER 2

REVIEW OF RELATED LITERATURE

Financial literacy is a vital skill that allows people to make educated and effective
decisions about their financial resources (Lusardi & Mitchell, 2014). In the Philippines, the
integration of technology into financial education has gained traction, with mobile applications
functioning as easily available instruments for improving students' financial understanding and
behaviors (Silva et al., 2024). Bachelor of Science in Accounting (BSA) students at PHINMA
University of Pangasinan are a demographic that not only needs a solid foundation in financial
principles for academic and professional pursuits, but also stands to benefit from the interactive
and personalized learning experiences provided by financial applications. Evaluating the
financial literacy practices of these students through the use of such applications provides
valuable insights into the effectiveness of digital tools in fostering financial competence.

This review aims to examine existing literature on financial literacy, the role of mobile
applications in enhancing financial education, and their impact on students’ financial
behaviors, thereby establishing a framework for assessing the financial literacy practices of
Bachelor of Science in Accountancy (BSA) students at PHINMA University of Pangasinan.

RELATED LITERATURE AND STUDIES

Financial literacy is a valuable ability that allows people to manage their finances
properly, make informed financial decisions, and comprehend economic settings. According
to research, financial literacy among young people is disturbingly low, with many lacking the
fundamental skills required for sound financial decision-making (Lusardi & Mitchell, 2014).
This disparity highlights the importance of early financial education in schools, as research
suggests that people who acquire financial education are more likely to engage in beneficial
financial behaviors (Mandell, 2008). In addition, there are gender disparities in financial
literacy, with women typically demonstrating weaker comprehension than males. This
discrepancy emphasizes the necessity of targeted educational programs that enable women to
become more financially literate (Bucher-Koenen and Lusardi, 2011).
 Financial literacy is a major issue around the world, with many countries reporting
inadequate levels of awareness of basic financial concepts, including interest rates, inflation,
and risk diversification (OECD, 2016). This lack of understanding can lead to bad financial
decisions and increased susceptibility to financial crisis. Implementing school-based financial
education programs can give students the core knowledge they need to make financial decisions
as adults (Fernandes, Lynch, & Netemeyer, 2014). Furthermore, corporate initiatives that
emphasize financial education can assist employees in better managing their finances,
particularly in understanding benefits such as retirement plans (Hastings, Madrian, &
Skimmyhorn, 2013).

Community-based financial literacy efforts, such as workshops and seminars, can

effectively reach people who do not have access to formal education, especially in
impoverished areas (Collins & O'Rourke, 2010). To assess financial literacy, researchers
created standardized assessments such as the "Big Three Questions," which focus on core ideas
required for making educated financial decisions (Lusardi & Mitchell, 2011). Identifying gaps
in financial knowledge can assist policymakers and educators in developing effective solutions,
especially for the most vulnerable communities.

Policymakers must prioritize financial literacy as a vital component of economic well-

being, which includes sponsoring educational programs and activities that improve financial
awareness for people of all ages (Lusardi, 2015). Continuous assessment of financial education
programs is required to ensure their efficacy, with rigorous evaluation criteria assisting in
determining the impact of these initiatives on financial habits and outcomes (Beverly et al.,
2010). Given rising debt levels and economic unpredictability, increasing financial literacy is
critical for improving individuals' ability to manage financial shocks and make prudent
financial decisions, resulting in improved financial stability and security.

Financial well-being is considered to be a strong predictor of subjective well-being.

Prior research defines financial well-being as a state of being in which an individual has control
over their daily finances, the ability to absorb financial shock, the ability to meet one's financial
goals, and the financial freedom to make the choices that allow them to enjoy life (Collins &
Urban, 2020; Netemeyer et al., 2018). Netemeyer et al. (2018) define perceived financial well-
being as two dimensions: the consumer's judgment of present money management situations
and the ability to assess future financial security. Financial literacy is an important aspect of
overall financial well-being. Financial literacy is founded on financial knowledge,
understanding, fundamental financial skills, confidence, and motivation (Warmath &
Zimmerman, 2019). Basic financial information, skills, and understanding are acquired both at
home and in formal education at school (Lusardi, 2015; Lusardi et al., 2010). While the impacts
of financial education interventions fade with time (Fernandes et al., 2014), financial literacy
emerges from experience, life events, and environmental changes (Leskinen & Raijas, 2006).

A substantial body of research has shown that more financially educated persons have
better economic outcomes (Leskinen & Raijas, 2006; Lusardi et al., 2010; Lusardi & Mitchell,
2011, 2014). Personal money management, encompassing everyday financial behaviors (e.g.,
spending and budgeting) as well as long-term financial decisions such as saving, investing, and
borrowing, benefits from strong financial literacy. Furthermore, increased financial literacy
enhances people's ability to recognize and resist fraud (Engels et al., 2020; OECD, 2018).

Digital advances are revolutionizing financial services, causing shifts in consumer

behavior and personal money management. The widespread adoption of digital technology
provides consumers with quick and easy access to a variety of digital services, presenting both
benefits and challenges in personal money management. (Vartiainen et al., 2023). For example,
services like Revolut and Monzo give simple visual dashboards that provide instant insights
into spending habits and overall financial health (Baker et al., 2020). Furthermore, interactive
learning tools, such as those found in KidVestors, use gamification and simulations to teach
financial principles, allowing users to participate in budgeting activities and virtual brokerage
experiences, making finance education both enjoyable and practical (Baker & Hsu, 2021).

Another aspect common to all apps is automated financial management, with programs
like Chip and Plum encouraging disciplined saving by rounding up purchases and investing
leftover change. This not only allows users to easily manage their finances, but it also teaches
them about the advantages of compound growth (Kumar & Singh, 2021). Furthermore, several
applications offer complete financial education on a variety of topics, such as budgeting,
investing, credit management, and entrepreneurship. KidVestors, for example, takes a
comprehensive approach to financial literacy, ensuring that users understand how various
financial concepts are related (Hastings et al., 2013).

Real-time tracking and feedback capabilities enable users to track their financial
progress, instilling accountability and encouraging smarter financial decisions (Lusardi &
Mitchell, 2014). Furthermore, the accessibility and inclusivity of financial literacy apps are
notable, as they are increasingly available in multiple languages and designed to meet diverse
user needs, thereby bridging the gap for individuals who may have previously faced barriers to
financial education (OECD, 2020). However, concerns remain, notably in terms of data
security and privacy, given that fintech apps handle sensitive financial information. Users must
be taught how to protect their information when utilizing these platforms (Zohar, 2015).
Additionally, the overwhelming number of financial apps can lead to confusion among users,
highlighting the need for developers to create streamlined and user-friendly experiences that
facilitate financial literacy without causing frustration (Baker et al., 2020).

FOREIGN LITERATURE

Ubiquitous gadgets provide access to a multitude of online services and digital tools,
presenting both benefits and obstacles for personal money management. For example, while
online shopping and other digital payment systems provide quick and easy shopping
experiences, they also tend to encourage expenditure by lowering consumption barriers.
Furthermore, the action is less palpable than using cash, and purchases can be readily triggered
by algorithms used in persuasive systems (for example, sale notifications, social media
advertising) (Carlsson et al., 2017; Huebner et al., 2020). Furthermore, maintaining many
banking relationships and credit cards may make it difficult for some people to gain a
comprehensive picture of their financial condition (Huebner et al., 2020). Individuals today are
expected to be active and well-informed about their financial activities, as well as willing to
accept responsibility for financial decisions such as investing in additional education or
planning for retirement (Davis & Hasler, 2021; Leskinen & Raijas, 2006; Lusardi, 2015;
Lusardi & Mitchell, 2014).

According to a report on millennial Fintech use, 80% of millennial smartphone owners

use their device for transactional financial purposes (e.g., depositing checks, sending or
receiving money, making mobile payments, and paying bills) and 90% for informational
financial purposes, such as checking credit scores, price comparisons, tracking spending, and
receiving personalized investment advice (Yakoboski et al., 2018). According to the findings,
paying bills is the most common transactional activity, and comparing prices is the most
common informative activity among millennials who use smartphones. Previous research has
found that financial literacy can reduce the impact of mobile payment use on account overdrafts
(Yakoboski et al. 2018). Hence, a new type of financial literacy is essential to improve personal
financial outcomes in a digital world densely populated by Fintech (OECD, 2017; Yakoboski
et al., 2018).

While digital technologies are considered an effective means of achieving goals, most
of these systems are not neutral; they frequently contain persuasive algorithms capable of
influencing people's views and behaviors in some way (Oinas-Kukkonen, 2013). For service
providers, this opens up the option of convincing and altering users' views and behavior using
persuasive technologies that use software design to shape, reinforce, or change user attitudes,
intentions, or behaviors (Fogg, 2009b, 2009a; Shin & Kim, 2018). Persuading consumers to
attain healthy lifestyle behaviors (e.g., weight loss, physical exercise), adopt greener energy
habits (Oinas-Kukkonen, 2013), and purchase other things (Lembcke et al., 2019; Mirsch et
al., 2017). In behavioral economics, nudging refers to external actions that cause changes in
human behavior (Thaler & Sunstein, 2008). As a result, digital nudging has the potential to
significantly impact people's behavior in digital environments (Weinmann, Schneider, and
Brocke, 2016; Benartzi, 2017; Mirsch et al., 2017; Cai, 2020; Lembcke et al., 2019).

Today, not only do large corporations utilize digital nudging in tailored marketing
(Cai, 2020; Mirsch et al., 2017), but also financial service providers offer products that
influence consumer financial behaviors (Dolan et al., 2012). Current literature shows evidence
of the paradoxical nature of nudging as the same tools create different kinds of value for
customers and for companies. This creates a paradox where digital capabilities that provide
benefits for companies may run counter to the interests of customers, and vice versa.

As a result of the pervasiveness of digitalized settings, the financial industry is

evolving rapidly as fintech businesses bring innovative technology and new business models
(Elsinger et al., 2018). Fintech facilitates access to existing and novel financial goods and
services, as well as the ability to customize products and minimize service costs. However, the
rise of fintech brings with it a number of concerns, including the potential for digital service
exploitation and fraud, issues with data protection, and digital profiling. In addition to market-
driven risks, there are regulatory and consumer-driven concerns. Consumers require
knowledge to grasp the quality and hazards of new financial products, as well as skills and
competencies to understand and use digital services and related IT technology, as well as
critical evaluation skills (Elsinger et al., 2018). Recent research stresses the importance of
expanding traditional financial literacy to incorporate digital literacy and demonstrating the
connections between financial literacy, digital literacy, and digital financial literacy (Lyons &
Kass-Hanna, 2021).

FinTech advances may also harm financial well-being by encouraging impulsive

consumer behavior when interacting with financial tools and platforms. Mobile apps, for
example, may appeal to impulsive and unsophisticated people who cannot predict future
preferences. As a result, mobile apps may lead to individuals making poor decisions in 'hot'
situations or under sales pressure. In such circumstances, the shorter period between initial
purchase and final use of financial services is likely to be adverse to customer welfare.
Hundtofte and Gladstone (2017) show that mobile users are more prone to make impulsive
purchases and use payday loans. Mobile loan products are frequently overly accessible,
allowing transient desires to be acted upon. This implies that mobile apps and platforms should
be supplemented with training. Panos and Karkkainen (2019) discovered a negative correlation
between financial literacy and cryptocurrency ownership in a recent cross-country study. This
shows that less financially savvy customers have a limited comprehension of the higher risk-
reward trade-offs associated with cryptocurrencies in comparison to other asset classes. The
market dominance of primarily unsophisticated investors is likely to be a factor fueling
cryptocurrency volatility.

A recent study has underlined FinTech's revolutionary impact in increasing financial

access, particularly among marginalized communities. Digital platforms reduce costs, increase
convenience, and encourage greater participation in formal financial systems. Kumar et al.
(2024) observe that while FinTech infrastructure has grown, its effectiveness in increasing
financial inclusion is dependent on a variety of enabling variables. Digital financial literacy
(DFL) appears as a critical factor in closing the FinTech inclusion gap. Individuals with limited
digital abilities are less likely to accept and utilize FinTech services efficiently. The study
concludes that DFL mediates the relationship between FinTech access and actual financial
inclusion, emphasizing the importance of targeted educational interventions alongside
technology advancement. The perceived soundness and clarity of financial rules have a
considerable impact on FinTech adoption. When users perceive regulatory settings as helpful
and secure, they are more inclined to adopt digital financial tools. Kumar et al. (2024) identify
perceived regulatory support as a moderating variable that enhances the impact of DFL on
financial inclusion outcomes.

The study combines parts of the Technology Acceptance Model (TAM) and the
Unified Theory of Acceptance and Use of Technology (UTAUT), suggesting a framework in
which FinTech indirectly promotes financial inclusion via DFL, with this link further
conditioned by regulatory attitudes. This integrated approach aids in identifying both user-level
and institutional-level characteristics required for inclusive digital finance.

Financial literacy is being increasingly recognized as an important component of

individual financial well-being, especially in the digital age. With the growing use of
smartphones, mobile applications have developed as an innovative and easily accessible
platform for financial education. Malik (2023) conducted a content analysis of 163 financial
literacy applications accessible on the Google Play and Apple App Stores to determine their
usefulness. The study used the Cognitive Theory of Multimedia Learning (CTML) and Jakob
Nielsen's usability heuristics as analytical frameworks to assess the educational and usability
qualities of the apps.

The research found that the majority of apps included features that promote effective
financial education. Specifically, 82% of the apps offered individualized content targeted to
individual user demands, while 91% were deemed user-friendly, increasing accessibility and
engagement. Furthermore, 49% of the apps used gamification tactics to make learning more
dynamic, while 63% featured reminder features to encourage constant user participation.
Furthermore, 61% used multimedia principles such as visual aids and interactive information
in accordance with CTML standards. These findings indicate that financial literacy
applications, when created using evidence-based principles, have the potential to be useful aids
for improving financial knowledge and behaviors. Malik's research emphasizes the necessity
of integrating app development with pedagogical and usability requirements, as well as
deliberate design in digital financial education programs. As mobile technology advances, such
research provides critical insight for educators, developers, and regulators looking to improve
financial literacy through scalable and user-centric digital solutions.

Mobile applications are increasingly being researched as instruments for improving

financial literacy and promoting better financial behavior. French, McKillop, and Stewart
(2020) conducted a randomized control experiment (RCT) with Derry Credit Union members
in Northern Ireland to investigate the usefulness of smartphone apps in enhancing financial
competence. Participants in the treatment group were given four apps that focused on loan
interest comparison, spending tracking, cash flow planning, and debt management. To assess
changes in financial knowledge, skills, and behaviour, the study employed the UK Financial
Capability Outcome Framework.

The findings showed that app users' comprehension of financial concepts and
motivation to engage in solid financial practices improved significantly. Notably, participants
who used the apps were more inclined to track their income and spending, and they reported
greater resilience in the face of financial shocks. These findings imply that smartphone-based
interventions might be an important feature of financial education programs, especially when
they are tailored to meet real financial requirements. The study adds to the growing body of
evidence showing, when properly integrated, technology can play an important role in
improving financial literacy and behavior across diverse populations.

With the rapid growth of Digital Financial Services (DFS), promoting digital financial
literacy among young people has become increasingly vital. Zhang (2021) used the Design
Thinking technique to develop a mobile application aimed at boosting young users'
comprehension of DFS. The software supplied fundamental understanding about digital
financial products, identified potential hazards, and offered practical advice for making sound
financial decisions. To enhance effective learning and user engagement, the app used a variety
of digital nudges, including breaking down difficult content into manageable chunks,
rewarding users, indicating crucial learning points, and providing timely support. This user-
centered design approach highlights the importance of specialized, interactive solutions for
increasing digital financial literacy in younger groups, allowing them to manage the complexity
of digital finance with greater confidence.

By presenting customers with new chances and difficulties, Koskelainen, Kalmi,

Scornavacca, and Vartiainen (2023) examine how the digital age radically alters financial
literacy. They contend that consumers today interact with financial products differently
because to digital technologies and FinTech breakthroughs, necessitating new knowledge and
abilities that go beyond traditional financial literacy. According to the report, consumers today
need to be able to manage complicated digital settings, such as online investing, mobile
banking, and automated financial advising, which calls for improved digital financial
capabilities. The authors advocate for upgrading financial education by incorporating
behavioral insights and digital skills into learning resources and curriculum in order to address
this change.

The swift growth of digital financial services has highlighted how crucial financial
literacy is to helping people successfully traverse intricate digital financial environments.
Using information from the China Household Finance Survey, Huang, Wu, and Yang's (2023)
study investigated the connection between Chinese households' use of digital financial services
and financial literacy. The results showed that using digital financial services, such as online
borrowing, online financial products, and mobile payments, was substantially more likely for
those with greater levels of financial literacy. Interestingly, the effect was stronger for financial
items and online borrowing, which are by nature more complicated, than for mobile payments.
This implies that in order to enable people to make wise choices in increasingly complex digital
financial situations, financial literacy is essential.

The study also showed that financial literacy helps disadvantaged populations, like
low-income families, the elderly, and people living in rural areas, accept and use digital
financial services more effectively. In order to improve digital financial literacy and promote
greater financial inclusion and well-being, these insights highlight the necessity of focused
financial education activities.

By expanding access to financial services, especially for marginalized groups, the

emergence of financial technology, or FinTech, has fundamentally changed personal finance.
Morgan (2021) examines how the expansion of FinTech offers financial literacy and education
both opportunities and challenges. Although financial services are now more widely available
thanks to digital platforms, people who lack enough financial expertise may find the intricacy
of many digital financial products daunting. Morgan highlights the significance of
incorporating digital financial literacy (DFL) into financial education frameworks, with a focus
on vulnerable populations like women, low-income people, rural areas, and small companies.

In the US, financial literacy is still a major issue, which makes effective teaching
methods necessary. A qualitative investigation on the perceptions of financial institution
leaders regarding the use of online educational technologies to improve financial literacy was
carried out by Lee (2019). Twenty officials from Texas banks and credit unions participated in
in-depth telephone interviews for the study revealed a number of standard approaches to
providing online financial education. These strategies include using social media platforms,
creating external links, putting material on websites, collaborating with suitable third parties,
and delivering online financial calculators. The leaders emphasized the enduring value of in-
person instruction while also acknowledging the potential of online technologies to effectively
engage the millennial generation.

Opportunities related to online financial literacy education include achieving social

responsibility, improving marketing efforts, bolstering a company's reputation, and obtaining
favorable regulatory consideration. On the other hand, issues like limited financial and human
resources, poor IT support, ineffective evaluation, and trouble inspiring online learning were
also brought to light. Some leaders proposed adding games, providing financial incentives, and
creating creative applications to address these issues. In order to promote financial literacy for
the benefit of society, policy implications include higher government support, collaborations
with educational institutions, integrating financial literacy into state assessments, and
encouraging cooperation between financial leaders, regulators, educators, and legislators.

Early differences in financial literacy have a substantial impact on people's financial

well-being later in life, according to Panos and Wilson (2020). FinTech advances have brought
a range of digital tools, including investing platforms and budgeting apps, that improve
personal financial management. These developments do, however, come with hazards, such as
increased susceptibility to online fraud and difficulties pertaining to digital financial inclusion.
The writers stress the value of thorough financial knowledge and responsible advice in assisting
people in navigating this changing environment.

Golden and Cordie (2022) emphasize how crucial it is to provide people with the skills
they need to manage their financial resources via digital platforms and technologies. According
to their research, digital financial literacy encompasses more than just traditional financial
knowledge; it also includes the ability to use digital tools like online investing services and
mobile banking applications. Making wise financial decisions in an increasingly digital world
requires this increased knowledge. Additionally, in order to close the gap between user skills
and technological advancements, Golden and Cordie support the inclusion of digital literacy
components in financial education programs, especially for adult learners. They contend that
encouraging digital financial literacy can improve financial inclusion and give people the
confidence they need to interact with the changing financial landscape.

According to Golden and Cordie (2022), digital financial literacy is now a crucial skill
for navigating contemporary financial environments, as it encompasses the ability to utilize
digital technologies such as online investing platforms and mobile banking effectively.
Abdallah, Tfaily, and Harraf (2024) provide additional support for this expansion of financial
literacy. Their study, conducted in Kuwait, revealed that digital financial literacy has a
significant impact on people's financial behaviors, especially through improved financial
knowledge, awareness, and decision-making skills. Because of the widespread use of financial
technologies in the digital age, digital literacy is now essential for reaching financial inclusion
and making wise financial decisions. Together, these studies highlight that the digital age
demands an integrated approach to financial education—one that combines traditional financial
concepts with digital skills to empower individuals to thrive in an increasingly tech-driven
financial world.

A new method for raising students' financial literacy by fusing digital technologies and
experiential learning is presented in the study "MoneyMingle: Bridging Financial Literacy and
Experience through Interactive Loan Education App" by Ahmad Azman et al. (2024). Since
financial illiteracy among teenagers is a common problem, the researchers created the
"MoneyMingle" software, which gives users real-world experience with financial decision-
making by simulating loan procedures. Students and working people are among the varied user
groups that the app's architecture accommodates by providing customized loan simulations that
replicate actual financial situations. This innovative approach aims to bridge the gap between
theoretical financial knowledge and practical application, fostering a generation of financially
literate individuals prepared for real-life financial challenges.

The effectiveness of app features and users' digital literacy are the main topics of
Bavadekar's (2023) study, which explores the variables affecting perceived trust in mobile
banking apps. Mobile banking apps have become essential instruments for providing financial
services to marginalized groups in India, where financial inclusion is still a concern
(Bavadekar, 2023). The study emphasizes how customers' trust in these platforms is greatly
increased by the perceived effectiveness of app features, such as transaction speed, security
features, and user interface design. The report also emphasizes the importance of digital
literacy, pointing out that those who possess greater digital competencies are more likely to
have faith in and make good use of mobile banking services. This aligns with findings from
other studies, which suggest that both technological features and user capabilities are essential
in fostering trust and encouraging the adoption of digital financial services (Bavadekar, 2023).

Yoshino, Morgan, and Trinh Quang Long (2020) investigate the link between financial
literacy and the use of financial technology (fintech) services in Japan. Using data from the
Bank of Japan's comprehensive survey, the authors created a financial literacy index consisting
of 25 items assessing financial decision-making skills and knowledge. Their findings show a
link between higher financial literacy and a greater likelihood of utilizing fintech services,
including electronic money and mobile payment apps. Individuals with higher financial literacy
were less likely to hold crypto assets, indicating a more sophisticated knowledge of financial
risks and advantages. The study also found that behavioral factors influence fintech adoption,
with risk-averse individuals more likely to use fintech services when they have higher financial
literacy.

LOCAL LITERATURE

Silva, Villena, Rabino, and Melo's (2024) study looks at the association between
digital financial literacy and the usage of digital financial instruments among college students
in Calapan City, Philippines. Digital financial literacy is widely regarded as critical for good
personal financial management, particularly among students who frequently utilize digital
financial platforms such as GCash, PayMaya, and PayPal. The study, which included 372
students from chosen higher education institutions in Calapan City, used a multi-stage sampling
procedure to ensure a representative sample. The findings show a strong beneficial relationship
between digital financial literacy and responsible financial habits such as limited spending and
regular savings. Students with greater levels of digital financial literacy were more proficient
in using digital financial tools, implying that improving digital financial literacy can lead to
better financial decision-making among students. The study recommends the incorporation of
digital financial literacy programs into higher education curricula, as well as the development
of workshops to help students improve their money management abilities in the digital age.

The growing use of financial technology (fintech) has altered personal finance
management, especially among millennials in Metro Manila, Philippines. Alyanna Marie L.
Toh et al. (2023) investigated the link between financial literacy and fintech adoption among
this population. Their research found that financial knowledge has an important role in
reducing perceived risks connected with fintech, hence increasing adoption. This finding is
consistent with prior research showing that increased financial literacy can lead to more
educated and confident adoption of fintech services (Lusardi & Mitchell, 2014). The study also
discovered that perceived benefits, simplicity of usage, and trust all influence fintech adoption,
which is consistent with Davis's Technology Acceptance Model (1989). However, the study
discovered no significant mediation impact of financial literacy on these variables, implying
that, while financial literacy is important, other factors also play major roles in fintech adoption.
This highlights the complexities of fintech adoption, in which numerous factors interact to
influence user behavior. The findings advance our understanding of how financial literacy
influences fintech adoption and give insights for policymakers and fintech companies looking
to improve financial inclusion through technology.

Financial inclusion in the Philippines has emerged as a vital aspect in attaining long-
term development. Agner and Desello (2023) investigated the link between financial literacy
and financial inclusion using data from the 2019 Financial Inclusion Survey. Their findings
show that financial literacy increases the likelihood of individuals having formal financial
accounts and using financial services. A one-standard-deviation increase in financial literacy
scores was associated with a 3.7 to 4.2 percentage point increase in the probability of having
at least one account, and a one-point increase in financial literacy scores increased the
likelihood of using a financial service by 4.9 to 6.0 percentage points. Other characteristics that
influenced financial inclusion included age, gender, work status, awareness of Bangko Sentral
ng Pilipinas (BSP) initiatives, income levels above PHP 40,000, and being the major household
financial decision-maker. These findings highlight the importance of increasing financial
literacy as a means of promoting financial inclusion and, as a result, supporting the
accomplishment of numerous development goals in the Philippines.

In the Philippines, the rapid rise of digital financial services has generated a number
of studies into the effects of digital financial literacy on economic behavior. The Philippine
Institute for Development Studies (PIDS) has issued publications underlining the significance
of digital financial literacy in achieving financial inclusion objectives. Their findings show
that, while access to digital financial services has improved, many consumers continue to
confront difficulties due to a lack of awareness about how to utilize these services efficiently
(PIDS, 2020). The research argues for comprehensive training programs that focus on practical
skills like using mobile wallets and comprehending digital transactions in order to empower
people and reduce the hazards connected with digital banking.

According to Visa's 2023 Consumer Payment Attitudes Study, the Philippines is

moving away from cash purchases in favor of mobile wallets and cards. According to the study,
which was conducted with 1,000 Filipino consumers aged 18 to 65, 87% of Filipinos now use
mobile wallets, which is the same as the 87% who continue to use cash. Card usage increased
to 70% in 2023, including swipe, insert, online, and tap-to-pay/contactless purchases. This shift
is being led by younger generations (Gen Z and Gen Y) and wealthier consumers, who are
increasingly accepting cashless transactions. On average, Filipinos go cashless for 10 days,
with 43% carrying less cash as a result of the growing trend of adopting cashless and contactless
payments, as well as the increasing acceptance of cashless payments by businesses and
merchants.

According to a BusinessWorld Online report from 2024, roughly 73.6% of Filipinos

have internet connections, and 73.4% spend an average of four hours per day on social media
sites. This broad use has made social media an important instrument for spreading financial
information, especially among younger audiences. According to the Bangko Sentral ng
Pilipinas (BSP), social media has become a source of financial knowledge and has influenced
financial decision-making by providing simply understandable content on themes such as
financial planning, credit, and investing, which is often humorous.

SYNTHESIS OF THE RELATED LITERATURE AND STUDIES

The studied literature emphasizes the growing significance of financial literacy,

especially in light of the swift advancements in digital technology. Better financial conduct and
long-term economic well-being have been repeatedly linked to financial literacy, which is the
capacity to make wise and sensible judgments about one's own finances. Despite its
importance, research shows that financial literacy is still lacking, particularly among women,
young people, and underrepresented groups. This highlights the need for focused interventions
and early financial education.

To address these gaps, digital technology integration, particularly through financial

technology (FinTech) and mobile applications, has become a potent instrument for improving
financial literacy. Digital platforms can greatly enhance users' comprehension of financial
concepts, budgeting, saving, and debt management, according to empirical research. Increased
engagement and useful financial learning are facilitated by features like gamification, real-time
tracking, tailored learning, and user-friendly interfaces. However, there are both opportunities
and challenges associated with the digital revolution. Risks include rash financial decisions,
information overload, and data security issues are mentioned in the literature. Financial apps'
use of algorithmic pushing and persuasive technologies may have unanticipated effects on
users' choices. Thus, it is essential to achieve digital financial literacy (DFL), which is the
ability to use digital financial tools safely and effectively.

Studies conducted locally and abroad concur that DFL is positively correlated with
better financial practices, especially among students and young people. Research shows that
digital financial instruments have the potential to advance financial inclusion in the Philippine
environment, particularly when students possess the necessary digital competencies. The
results indicate that financial competence can be considerably increased by incorporating DFL
into higher education curricula and providing hands-on learning opportunities via mobile
applications.

In conclusion, a thorough approach to financial education that incorporates digital

competencies, behavioral insights, and classical financial principles is necessary, according to
the reviewed literature. For Bachelor of Science in Accountancy (BSA) students, whose future
professional duties require a high level of financial literacy complemented by technology
competency, such an integrated framework is especially pertinent.
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