Panayiotis C. Andreou
Cyprus University of Technology and Durham University

Sofia Anyfantaki
Bank of Greece and Athens University of Economics and Business


This study examines the level and antecedents of financial literacy and investigates its influence on consumers’ internet banking behaviour. The focus is on Cyprus, a country that experienced an unprecedented financial crisis in 2013 that caused an enormous shrinkage of the banking sector. Ever since then, banks have been investing in financial innovations, such as internet banking (i-banking), aiming to enhance customer service and efficiency in the age of financial digitalization. Notwithstanding, the results show that financial literacy is yet too low in Cyprus, whereby only 37.33% of the study’s survey adults have a good financial knowledge proficiency level. The results indicate that financially literate consumers show a strong preference for frequent use of i-banking, whereby the odds of using i-banking frequently are increased by more than 64% for one standard deviation increase in the respondents’ financial knowledge score. The findings highlight the crucial interplay of digital and financial sophistication, and their positive influence on consumers’ usage of digital financial services. The evidence from Cyprus also points to policy directions according to which digital financial education programs should be a central element in national financial literacy strategies.

Keywords: financial literacy; internet banking; digital literacy; financial education; national strategy.

JEL-classification: D14, D91, G21

Acknowledgements: The views expressed in this article are those of the authors and do not necessarily reflect those of the Bank of Greece or the Eurosystem.


Sofia Anyfantaki
Bank of Greece
21, El. Venizelos Ave
10250, Athens Greece
e-mail: sanyfantaki@bankofgreece.gr


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