DIGITAL FINANCIAL LITERACY AND ITS IMPACT ON CONSUMER FINANCIAL BEHAVIOUR IN URBAN INDIA: A MODERATED MEDIATION MODEL

Digital financial literacy (DFL) has become a crucial enabler of informed financial decision-making in India’srapidly evolving fintech ecosystem. With the expansion of UPI, mobile wallets, digital lending, and app-basedinvestment platforms, consumer financial behavior has undergone significant transformation. However,disparities persist in consumers’ ability to understand digital tools, evaluate financial risks, and apply secureonline practices. This 2025 study tests a moderated mediation model in which financial self-efficacy mediatesthe effect of DFL on consumer financial behavior, while perceived digital trust moderates the self-efficacy–behavior relationship.Data were collected from 320 digital finance users across Delhi, Mumbai, Bengaluru, Chennai, and Hyderabadbetween February and September 2025 using a structured questionnaire. Structural Equation Modelling andPROCESS Macro (Model 7; 5,000 bootstraps) confirmed that DFL significantly improves responsible financialbehavior (β = 0.42, p < .001). Financial self-efficacy partially mediates this effect (indirect effect = 0.20; 95%CI [0.12, 0.30]). Perceived digital trust significantly strengthens the self-efficacy → behavior link (interaction β= 0.23, p = .002), producing a significant moderated mediation effect (index = 0.08; 95% CI [0.03, 0.15]).The findings emphasize the joint role of literacy, confidence, and trust in driving positive digital financialoutcomes. Policy implications include targeted literacy programs, trust-enhancing fintech design, andconfidence-building interventions.Keywords: Digital Financial Literacy, Financial Self-Efficacy, Consumer Financial Behavior, Digital Trust,Moderated Mediation Model