Struggling to make ends meet: can consumer financial behaviors improve?
International Journal of Bank Marketing
ISSN: 0265-2323
Article publication date: 16 November 2021
Issue publication date: 9 March 2022
Abstract
Purpose
The purpose of the study is to examine the following two research objectives. The first was to examine the predictive relationships that consumer characteristics of financial literacy, thinking styles and self-control have with a consumer's financial behaviors. The second goal was to ascertain financial management products' ability to aid those consumers who need it the most by weakening the predictive effects of consumer traits on financial behaviors.
Design/methodology/approach
The study employed a web-based survey to gather information. The measurement and structural models were analyzed using generalized structured component analysis (GSCA), a component-based structural equation model. The mediation effect of self-control is assessed using the GSCA. The conditional mediation of demographic variables and use of personal financial management products are evaluated using multi-group analysis (MGA) in GSCA.
Findings
Antecedents, financial literacy, thinking styles and self-control consumer characteristics are predictors of financial behaviors. However, self-control plays a more prominent role as a mediator between the other variables, strengthening the overall relationship. Also, financial products can have a beneficial moderation effect assisting those consumers who need them the most.
Practical implications
These insights help in creating target specific financial literacy strategies to influence consumers' financial behaviors. Also, there is a need to develop mechanisms to influence a consumer's self-control and thinking styles to improve financial behavior. In conjunction with other initiatives, the impact of financial literacy has a greater effect on financial behaviors. Further, the insights assist financial institutions and financial technology firms in offering and creating products to help customers make better financial decisions and improve their financial behaviors.
Social implications
The research addressed a significant global issue – consumer financial health. The Great Recession and the COVID-19 recession highlight the need to focus on the consumer and efforts to improve their financial health.
Originality/value
This research highlighted the mediating role of self-control and suggested that existing and future financial products can positively influence consumer behavior drivers.
Keywords
Acknowledgements
The authors thank Dr. Heungsun Hwang for valuable guidance in analyzing data using Generalized Structured Component Analysis. The authors want to thank Carolyn G. Warner for the numerous edits throughout the entire process of creating this article.
Citation
Meneau, L.K. and Moorthy, J. (2022), "Struggling to make ends meet: can consumer financial behaviors improve?", International Journal of Bank Marketing, Vol. 40 No. 2, pp. 263-296. https://doi.org/10.1108/IJBM-12-2020-0595
Publisher
:Emerald Publishing Limited
Copyright © 2021, Emerald Publishing Limited