Collection
Special Issue: Recent Developments in Financial Research: Digital Finance and Financial Literacy
The financial industry has changed tremendously over the last decades. And so has the usage of financial products and services. A large part of this development has been technology-driven, giving rise to the digitalization of the industry with profound changes for established processes and products. Moreover, innovative business models have become possible that, by rendering formerly necessary infrastructure obsolete, have created new markets. Cost-effective ways of processing large sets of information allow the tailoring of services and products that many have found the “analog” banking world wanting. The opportunities of digitalization also pose new demands on employees, market participants, and customers, however. Within the ever-widening gap between automatization on the one hand and customization on the other, the digitally-induced universe of choices can easily become overwhelming, exhausting the capabilities of decision makers at different positions inside and outside the industry.
At the same time, fundamental weaknesses of the social security and pension systems have left private individuals with much higher responsibility for their own financial well-being than ever before. Many observers have therefore begun to question whether consumers possess the necessary knowledge and competence to make increasingly complex financial decisions. As financial literacy is still rarely taught at school, but rather acquired “by doing”, the changing financial environment will certainly affect the influence that any lack of financial sophistication may have on households’ financial well-being.
Against this background, this special edition tries to bring together research articles on the frontier of both developments: digitalization of the financial industry and individual literacy in dealing with financial decisions within this industry. Currently, the two research streams seem to co-exist rather than to mingle. It may not be a bold guess to expect this to change: As private households become ever more wealthy, their demands should shape the design of financial products and services at least as much as the availability of digital technology. A certain degree of financial literacy may be necessary, however, to voice these demands. While this gives a certain spin on the dynamic relation between financial digitalization and education that can be expected to be covered in future research, it also leaves room for the analog role of financial educators and advisors which is already a strongly-researched topic.
Editors
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Christina E. Bannier
Department of Business and Economics, Banking and Finance, Justus-Liebig-Universität Gießen, Licher Straße, 35394 Gießen, Germany
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Wolfgang Breuer
School of Business and Economics, Department of Finance, RWTH Aachen University, Templergraben 64, 52056 Aachen, Germany
