Promoting financial literacy through a digital platform: A pilot study in Luxembourg

Abstract

This paper investigates the dynamics of individual portfolios in a unique innovation test conducted through a digital financial literacy platform—saalt. We conduct the test at the University of Luxembourg and ask students to construct their own financial portfolios, choosing from among 500+ financial assets; students could adjust their portfolio weights at any time using their registered accounts. Moreover, we stimulate the sharing of portfolio information among students through class presentations and Facebook postings. We find relatively sophisticated diversification strategies and clear momentum‐chasing behaviour for winning stocks; we also discover rapid convergence of individual portfolios to the provided benchmark portfolios. Finally, we find significant peer influences in the test. In general, financial literacy spreads rapidly among students.

Financial literacy in the digital age—A research agenda

“…Another example is the study by Huebner et al (2020) that shows how smartphone app use increases individuals' salience of credit card transactions and resulted reduced spending. Furthermore, prior research also show that text messages can be used as a nudging intervention in student loan repayment process (Johnson et al, 2020), and that financial literacy and portfolio management process can be promoted through digital platform (Li & Meyer‐Cirkel, 2019).…”

“…Nowadays, many financial behaviors are performed in digital environment in which people's behavior can be influenced through digital nudging (Weinmann, Schneider and Brocke, 2016; Benartzi, 2017; Mirsch et al, 2017; Cai, 2020). Digital nudging could be used to improve financial literacy, to influence financial behavior, and to provide financial advice (e.g., Cai, 2020; French et al, 2020; Huebner et al, 2020; Li & Meyer‐Cirkel, 2019). Financial service providers have products that successfully use intervention tools to alter customer behavior and to have an effect on financial capability (Dolan et al, 2012).…”

“…In addition to e-banking and mobile payments, a couple of recent articles examine investments in digital environment. Li and Meyer-Cirkel (2021) study the use of a digital financial literacy platform on students' portfolio performances. They discover rapid convergence of individual portfolios to the provided benchmark portfolios and found significant peer influences as students shared portfolio information through class presentations and Facebook postings.…”

How digital finance affects income distribution: Evidence from 280 cities in China

“…However, other scholars such as [ 30 , 31 ] use relevant data from less developed countries to demonstrate that the coverage of mobile networks can help markets function better and improve the welfare of low-income people. [ 21 ] delve into the two different phenomena of the digital divide and digital dividend in the Internet market and find that the continuous development of digital platforms can allow people to cross the original digital divide and realize the digital dividend.…”

“…Compared with existing studies, this paper may have the following innovations: most of the existing literature on digital finance and income distribution discusses the linear relationship between the two, with the majority of such literature being representative [ 3 , 4 , 20 , 21 ], which have explored whether digital financial development is conducive to raising local income levels and whether there is heterogeneity in the extent to which income levels are raised [ 10 , 22 , 23 ]. In contrast, some representative literature advocates another view that the relationship between digital finance development and income distribution may have non-linear characteristics, which is less represented in the literature [ 8 , 10 ], where they use threshold effect analysis to explore whether there is a threshold value for digital finance to be helpful in raising residents’ income, who used threshold effects analysis to explore whether there is a threshold for digital finance to contribute to higher income.…”