THE IMPORTANCE OF FINANCIAL LITERACY IN THE DIGITAL ECONOMY

Abstract

The rapid diffusion of digital payments, mobile banking, fintech platforms, and crypto-assets has transformed how individuals earn, spend, save, borrow, and invest. While these innovations expand access and lower transaction costs, they also introduce novel risks, including algorithmic pricing, data misuse, persuasive interface design, scams, and high-volatility products. This article examines the importance of financial literacy as a foundational capability for inclusive and safe participation in the digital economy. Using an analytical review of international frameworks and empirical literature, it argues that digital contexts amplify both the benefits and the hazards of financial decisions, making knowledge, skills, and behaviors—such as budgeting, comparison shopping, risk comprehension, and privacy management—more consequential. The discussion highlights measurement advances, behavioral insights, and “just-in-time” education embedded in apps as promising responses. It concludes that a whole-of-ecosystem approach linking consumer education, platform design standards, and proportionate regulation is essential to ensure that digitalization reduces, rather than reproduces, financial vulnerability.