Knowledge or confidence? : exploring the interplay of financial literacy, digital financial behavior, and self-assessment in the FinTech era

Purpose: The central research question of the study is how objective financial knowledge and subjective financial confidence interact and relate to digital financial behavior and the use of FinTech tools. By examining both objective knowledge refers to measured, test-based financial competence and subjective confidence denote self-assessed financial understanding, the research offers insight into the psychological and demographic drivers of FinTech use and perceived financial well-being. Design/methodology/approach: Based on the OECD's 2023 international financial literacy survey, the study uses a nationally representative Hungarian sample. It employs non-parametric statistical methods, linear regression, and two-step cluster analysis. Three composite indicators, general digital activity, digital financial engagement frequency, perceived financial security were developed to measure general digital activity, frequency of digital financial engagement, and perceived financial security. Findings: Results reveal a moderate but significant correlation between actual and self-assessed financial knowledge. Men score higher on both measures, though self-assessment bias does not significantly differ by gender. Higher education and income levels are associated with stronger financial literacy and more frequent use of FinTech tools, while age correlates negatively. However, the accuracy of self-perception is not explained by these demographic factors. Cluster analysis identifies four distinct financial knowledge profiles and five consumer digital behavior types, revealing disparities in digital financial inclusion and confidence. Originality: This research contributes a multidimensional perspective on how consumer capabilities, attitudes, and digital behavior influence FinTech adoption. By integrating behavioral, demographic, and psychological factors, the study offers practical implications for targeted financial education and the design of inclusive, human-centered digital financial services-especially relevant for emerging European markets.