Financial attitudes decide whether fintech actually helps millennials

Financial literacy plays a decisive role in shaping how millennials manage their finances, even under severe economic stress. A new large-scale study examines how these forces interact, offering rare data-driven insight into financial decision-making under prolonged crisis conditions.

Published in the International Journal of Financial Studies and titled Understanding Millennials’ Financial Behavior: The Role of FinTech Adoption, Financial Literacy, and the Mediating Effect of Financial Attitudes in a Crisis-Affected Emerging Economy, the study analyzes how Lebanese millennials manage money amid institutional breakdown.

Based on responses from 390 participants and grounded in Behavioral Finance Theory, the research moves beyond surface-level explanations to reveal how knowledge, technology, and mindset collectively shape financial behavior when economic stability cannot be taken for granted.

Financial literacy remains the backbone of sound behavior

Participants with higher levels of financial knowledge were significantly more likely to engage in responsible behaviors such as budgeting, saving, debt management, and informed financial planning. This relationship held despite the collapse of traditional banking functions and the volatility of the national currency.

Financial literacy, as the authors describe, is a cognitive resource that allows individuals to interpret complex financial information, evaluate risk, and make deliberate choices rather than reactive ones. In a context where inflation erodes purchasing power and formal credit access is limited, these skills become essential for minimizing losses and maintaining a degree of financial control.

However, the study also challenges the assumption that financial knowledge alone is sufficient. While literacy directly improves financial behavior, its impact is significantly strengthened when paired with positive financial attitudes. This finding reflects the psychological strain of living in a prolonged crisis, where uncertainty and fear can undermine even well-informed decision-making.

The Lebanese case demonstrates that financial literacy does not operate in a vacuum. Knowledge must be accompanied by confidence, discipline, and constructive attitudes toward money to translate into consistent behavior. In unstable environments, emotional responses to risk and loss can overwhelm rational calculation, making attitudes a critical bridge between knowing and doing.

Financial attitudes amplify or weaken financial knowledge

The study identifies financial attitude as the strongest predictor of financial behavior among Lebanese millennials and as a key mediating factor between literacy and action. Financial attitude encompasses beliefs about saving, spending, risk-taking, debt, and long-term planning. These attitudes shape how individuals perceive financial opportunities and threats, especially when external conditions are volatile.

Empirical analysis shows that financial literacy significantly influences financial attitudes, which in turn exert a powerful effect on behavior. In practical terms, millennials who view money management as purposeful, disciplined, and future-oriented are far more likely to apply their financial knowledge effectively. Those with negative or anxious attitudes, by contrast, struggle to convert knowledge into action, even when they understand financial concepts.

This mediating effect is notably stronger than what has been observed in studies conducted in economically stable countries. The authors attribute this to Lebanon’s prolonged crisis, which has heightened reliance on subjective judgment, emotional coping strategies, and heuristic decision-making. When institutional trust collapses, individuals fall back on internal belief systems to guide behavior.

Cultural factors further reinforce this dynamic. Cash dependency, family-based financial support networks, and religious norms around borrowing and saving play an outsized role in shaping attitudes. These social anchors often substitute for formal financial guidance, amplifying the psychological dimension of financial decision-making.

The findings suggest that policies aimed solely at improving financial literacy may fall short if they do not also address attitudes toward money. Educational programs that ignore emotional and psychological dimensions risk producing knowledge that remains inert under pressure.

FinTech adoption helps, but only within limits

FinTech adoption emerges in the study as a positive but secondary driver of financial behavior. Millennials who use digital financial tools such as mobile wallets, online banking, and electronic payments demonstrate better financial management than those who do not. These tools facilitate budgeting, transaction tracking, and access to alternative financial services in a country where traditional banking has become unreliable.

Yet the impact of FinTech adoption is notably weaker than that of financial literacy and financial attitude. The authors point to several structural constraints that limit the behavioral potential of digital finance in Lebanon. Regulatory ambiguity, cybersecurity concerns, intermittent infrastructure, and persistent distrust in financial institutions reduce the extent to which FinTech can fully substitute for a functional banking system.

In practice, many Lebanese millennials use FinTech as a survival mechanism rather than as a platform for long-term financial planning. Mobile payments and digital wallets allow individuals to bypass banking restrictions and manage daily expenses, but they do not automatically promote saving or investment without adequate financial knowledge and positive attitudes.

Technology, the study stresses, is not a neutral solution. FinTech tools can amplify good financial behavior when users are knowledgeable and confident, but they can also expose individuals to new risks when literacy is low. Fraud, misinformation, and speculative behavior remain significant concerns in digitally mediated financial environments.

The authors caution against viewing FinTech expansion as a standalone strategy for financial inclusion in crisis-affected economies. Without parallel investments in education, regulation, and trust-building, digital tools may offer convenience without resilience.

Implications for policy and financial resilience

Rebuilding financial resilience requires an integrated approach that addresses knowledge, attitudes, and technology simultaneously. Interventions that focus on only one dimension are unlikely to produce durable change.

For policymakers, the results highlight the urgency of restoring trust through transparent regulation, consumer protection, and clear communication. Financial attitudes are shaped not only by personal experience but also by perceptions of institutional reliability. In environments where trust remains broken, attitudes will continue to dominate behavior.

For financial institutions and FinTech providers, the research suggests that user-friendly design must be paired with embedded educational features. Tools that help users understand risk, plan budgets, and develop positive financial habits are more likely to support long-term stability than those focused solely on transaction efficiency.

International development actors may also draw lessons from the Lebanese case. In crisis-affected economies, financial literacy programs should prioritize attitudinal change alongside technical instruction. Emotional resilience, confidence-building, and peer-based learning may be as important as teaching interest calculations or budgeting formulas.

The authors acknowledge limitations, including reliance on self-reported data and the cross-sectional design. They call for longitudinal research and cross-country comparisons to assess how these behavioral mechanisms evolve over time and across different crisis contexts. Even so, the study provides rare empirical grounding for debates that are often driven by assumptions rather than evidence.