Financial Literacy and Investment Behavior Among Generation Z

Mrutyunjay R Wali

mrmrityunjaya2@gmail.com

Dayananda Sagar College of Engineering

Dr. Vinod Krishna

vinod-mba@dayanandasagar.eduProfessor

Department of Management Studies Dayananda Sagar College of Engineering

ABSTRACT

This paper examines the relationship between financial literacy and investment behaviour among Generation Z (individuals born approximately between 1997 and 2012), a cohort that has come of age during the rapid digitisation of retail finance. Drawing on the Theory of Planned Behaviour, Financial Socialisation Theory, Behavioural Finance and Prospect Theory, and the Technology Acceptance Model, the paper develops a conceptual framework linking the dimensions of financial literacy — financial knowledge, financial attitude, financial behaviour and digital financial literacy — to investment decision-making, mediated by financial self-efficacy and risk perception, and moderated by social media/finfluencer exposure and fintech platform design.

The paper reviews the growing body of evidence on Generation Z's financial conduct, drawing on case material from India's National Stock Exchange (NSE), the Reserve Bank of India, the Securities and Exchange Board of India (SEBI), the TIAA Institute–GFLEC Personal Finance Index, Bank of America's Better Money Habits research, the CFA Institute, and recent academic work on finfluencers, to illustrate a recurring pattern: Generation Z is simultaneously the most digitally engaged generation of investors and, on standard measures, the least financially literate. The paper discusses the benefits of democratised, technology-enabled investing alongside the challenges it introduces — social-media-driven speculation, gamified platform design, and a widening gap between market participation and financial understanding. It concludes with directions for future research and practical implications for fintech platforms, educators and regulators.

Keywords: Financial Literacy, Investment Behaviour, Generation Z, Behavioural Finance, Fintech, Finfluencers, Digital Financial Literacy, Risk Perception, Financial Socialisation, Retail Investing