Schmalenbach Business Review

, Volume 18, Issue 4, pp 343–375 | Cite as

Financial Knowledge, Risk Preferences, and the Demand for Digital Financial Services

  • Christian Königsheim
  • Moritz LukasEmail author
  • Markus Nöth
Original Article


Financial knowledge and risk preferences explain a large part of the variation in important financial decisions of households such as stock holdings, personal debt, retirement savings, or the adoption of financial innovations. Based on a survey among more than 1 700 customers of a German retail bank, we find that both financial knowledge and risk tolerance are significantly positively correlated with the likelihood to use digital financial services. As in previous studies, gender, age, and education additionally influence this decision. Moreover, individuals preferring the traditional banking solution require a higher compensation to switch to a digital service provider than customers of a digital service provider require to switch back to the retail bank, which we interpret as further evidence for the central role of financial knowledge and risk preferences. Our results have implications for both traditional banks and providers of digital financial services.


Digital finance Early adopters Financial literacy Risk preferences 

JEL Classification

D12 D14 G21 



The authors thank the anonymous referees whose comments significantly improved the paper and acknowledge the cooperation and helpful discussions with the anonymous bank. We thank Benjamin Holstein, Alessandro Monaco, and Alexander Nahr for excellent research assistance.


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Copyright information

© Schmalenbach-Gesellschaft für Betriebswirtschaft e.V. 2017

Authors and Affiliations

  1. 1.Chair of Banking and Behavioral FinanceUniversity of HamburgHamburgGermany

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