The Moderating Role of Financial Literacy on the Relationship between Banking Reforms and Banks Customers' Psychological Well-Being

The study examines the effect of banking reforms on the psychological well-being of bank customers in Ghana, emphasizing how policy changes influence economic well-being, self-esteem, and a sense of community among stakeholders. The purpose of this research is to assess the implications of banking reforms on customers' psychological well-being and explore moderating factors such as financial literacy and gender. Anchored in the pragmatism philosophy, the study adopts a causal research design and employs a quantitative methodology. Primary data were collected through structured, closed-ended questionnaires from 2,500 stakeholders, including customers, employees, and investors, drawn from three key regions: Greater Accra, Ashanti, and Eastern. The findings reveal that banking reforms positively impact economic well-being (β = 0.459, p < 0.001), self-esteem (β = 0.433, p < 0.001), and a sense of community (β = 0.404, p < 0.001). However, when these dimensions are aggregated, the reforms exhibit a negative overall effect on customers’ psychological well-being (β = -0.064). This research contributes to the understanding of the broader psychological impacts of banking reforms, highlighting the need for policies that prioritize customer well-being. The findings underscore the critical role of financial literacy in mitigating adverse effects and suggest areas for further exploration to optimize reform outcomes. The study offers actionable insights for policymakers, financial institutions, and stakeholders in designing customer-centric banking strategies. The study recommends that the economic well-being, self-esteem and sense of community of stakeholders should be taking into consideration to improve the psychological well-being of banking customers.