Digital Financial Literacy among Retail Investors in Kerala

Digital Financial Literacy among Retail Investors in Kerala

Saritha | Jayaprakasan

Retail Investors | Online Trading

 Vol: 11; No: 4; Dec. 25 | ISSN: 2455-3921   

This research empirically examines why retail investors participate in and trade on the digital platform in the Indian state of Kerala. A 624-respondent retail investor sample received a structured questionnaire. The analysis using Factor Analysis, Multiple Regression, and ANOVA was carried out to test the proposed relationships. Factor Analysis (KMO =. 921; Bartlett’s Test, p <. 001) extracted three major latent variables within 20 scales comprising digital financial literacy: Platform Usability (24.38% of the variance explained), Security Awareness (21.06% of the variance explained), and Financial Knowledge (19.33%), which together explain 64.78 percent of total variance in our model. A Multiple Linear Regression model indicated that these three variables significantly positively predicted annual investment value (R² = .361, F(3,620) = 65.723, p < .001). Financial Literacy was the best predictor (β =. 447, p <. (001), Success followed by Security Awareness (β =. 388, p <. “Website Content (β=.”3, p<.034) and Platform Usability (β=. 258, p < .001). Additionally, an ANOVA revealed a significant digital divide: investors in urban locations are significantly more Security Aware than their rural counterparts (F(1,622) = 55.841, p < .001). It establishes that although technology characteristics, such as ease of use, are significant, investor education (Financial Knowledge) and improving Security Awareness are critical for increasing participation. The findings offer practical implications for fintech companies and policymakers in building a digital investment ecosystem that is inclusive, secure, and empowering, especially in developing countries.

K. Saritha, Assistant Professor and Research Scholar in Commerce, Affiliated to University of Calicut, Malappuram, Kerala, India