Financial Literacy and Its Influence on Consumers’ Internet Banking Behaviour

44 Pages Posted: 26 Dec 2019

See all articles by Panayiotis C. Andreou

Panayiotis C. Andreou

Cyprus University of Technology

Sofia Anyfantaki

Bank of Greece; Athens University of Economics and Business

Date Written: December 5, 2019


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 frequently using i-banking 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

Suggested Citation

Andreou, Panayiotis C. and Anyfantaki, Sofia, Financial Literacy and Its Influence on Consumers’ Internet Banking Behaviour (December 5, 2019). Available at SSRN: or

Panayiotis C. Andreou (Contact Author)

Cyprus University of Technology ( email )

School Of Management and Economics
P.O. Box 50329
Lemesos, 3036


Sofia Anyfantaki

Bank of Greece ( email )

21 E. Venizelos Avenue
GR 102 50 Athens

Athens University of Economics and Business ( email )

76 Patission Street
Athens, 104 34

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