Financial literacy is a crucial element of financial decision-making, exerting significant influence on the behaviour of individual investors, while making budgetary, house…
Abstract
Purpose
Financial literacy is a crucial element of financial decision-making, exerting significant influence on the behaviour of individual investors, while making budgetary, house financing, stock investing and retirement planning decisions. So, the purpose of this research is to determine the relationship between financial literacy and behavioural biases of individual investors in Pakistan.
Design/methodology/approach
In this research paper, a sample of 300 observations was obtained through questionnaires from individual investors residing in Lahore and invested in Pakistan Stock Exchange. The data obtained, was passed through Cronbach’s Alpha and Exploratory Factor Analysis (EFA). The hypothesis developed for the research was tested by Pearson’s Chi-square and Ordinal Regression Analysis.
Findings
The hypothesis testing of the research concluded that there is a negative association between financial literacy and behavioural biases of individual investors. So, it means; with an increase in level of financial literacy, the likelihood of investor facing behavioural biases reduces. It also appeared that male respondents have more financial literacy than female respondents
Originality/value
Previous studies in the field of finance, identified different factors causing the financial behaviour of individual investor of Pakistan, and also focused on level of financial literacy in Pakistan, but these studies have not emphasized the crucial relationship between financial literacy and behavioural biases of individual investors. Thus, the unique empirical analysis developed in this paper has accentuated the financial literacy as a factor that mitigates behavioural biases of individual investor.
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Inzamam Ul Haq and Tahir Mumtaz Awan
This study aims to empirically explore e-banking service quality and its impact on the e-banking loyalty through a mediating impact of e-banking satisfaction. The account holders…
Abstract
Purpose
This study aims to empirically explore e-banking service quality and its impact on the e-banking loyalty through a mediating impact of e-banking satisfaction. The account holders of three domestic systemically important banks of Pakistan were surveyed during COVID-19 to examine the electronic services provided by these banks.
Design/methodology/approach
The data was collected through an adapted questionnaire by using emails and messaging applications. The database of a local marketing company in Pakistan was used, and 976 responses were included in the analysis. The structured equation modeling was used to test the propositions of study.
Findings
The findings delineate that reliability and website design proved to increase e-banking loyalty, particularly during COVID-19. The link between e-banking privacy and security and e-banking loyalty was proved as fully mediated by e-banking satisfaction; however, indirect effect of the reliability and website design with e-banking loyalty was partially mediated.
Practical implications
In strategic planning of e-banking mechanisms and the associated consumer behavior, the results of this study can be helpful for policymakers. In case of similar epidemics and natural calamities, consumers may depict similar behavior as shown during the lockdown and social distancing during COVID-19; hence, the study can help regulatory bodies in preparing their safety roadmap.
Originality/value
The mediating effect of e-banking satisfaction between privacy & Security and e-banking loyalty implies that customer give importance to secure e-banking platforms. There can be a variation in their loyalty because of privacy concerns. The application of cognitive–motivational–relational (CMR) theory in a relationship between e-banking service quality and e-banking loyalty with a mediating role of satisfaction is an emotional response to capture the behavioral changes during COVID-19. It enables researchers to understand the CMR theory concerning COVID-19 and e-banking perspective.
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Nor Hafizah Zainal Abidin, Fatimah Mat Yasin and Ahmad Zainal Abidin
The purpose of this study is to gather the perceptions of the Shari'ah committee members on what and how they safeguard and strengthen their independence in fact and independence…
Abstract
Purpose
The purpose of this study is to gather the perceptions of the Shari'ah committee members on what and how they safeguard and strengthen their independence in fact and independence in appearance during the discharge of their duties.
Design/methodology/approach
Data were gathered through semi-structured interviews with 13 Shari'ah committee members from 13 different Islamic financial institutions (IFIs).
Findings
Based on the Islamic worldview and agency theory, the findings suggest that safeguard measures within the context of the Shari'ah committee are strengthened by the following factors: presence of competencies, personal characteristics of the Shari'ah committee members, board engagement, role of the chairman in the Shari'ah committee and accountability to God. Based on the agency theory, it can be suggested that the characteristics of the Shari'ah committee and the presence of an effective governance structure are able to minimise threats to the independence of the Shari'ah committee and enhance its effectiveness.
Practical implications
The insights from this study highlight that proper and fit criteria need to be enhanced to ensure the independence of the Shari'ah committee members when performing their roles for IFIs. Moreover, it shows that board engagement and chairman involvement in overseeing the Shari'ah committee in the discharge of its duties is able to improve the independence of the Shari'ah committee both in fact and in appearance.
Originality/value
This study contributes to the evidence on safeguard measures in the Malaysian context, which is highly regulated in relation to the Shari'ah governance practices in IFIs. This evidence could be considered by other Shari'ah committees in different contexts.