Financial Literacy and Its Influence on Customers’ Online Banking Behaviour

Abstract

With the rapid digitization of banking services, financial literacy has become essential for individuals to access and effectively use online banking services. Therefore, this study explores the impact of financial literacy on customers’ online banking behavior, focusing on the Balangoda Divisional Secretariat Division in Sri Lanka. A sample of 382 bank customers was selected using simple random sampling, and data was collected through structured questionnaires and interviews. The analysis, conducted using Multiple Linear Regression and Binary Logistic Regression models in IBM SPSS 23, reveals that financial knowledge, attitudes, and behaviors positively influence online banking behavior. Furthermore, the findings indicate that as financial literacy increases, customers are more likely to engage in online banking services. Therefore, this study highlights the significant role of financial literacy in promoting the adoption of online banking services and emphasizes the need for targeted educational programs by banks to enhance customers’ awareness and confidence in using online banking services.