Online Banking Users vs. Branch Visitors: Why Are Their Portfolio Returns Different?

Nagano, Mamoru and Uchida, Yuki (2021): Online Banking Users vs. Branch Visitors: Why Are Their Portfolio Returns Different?

Abstract

This study investigates why portfolio returns of online banking users are higher than those of non-online users. We first demonstrate that households that are eager to improve their level of financial literacy are more likely to use online banking. Second, a marginal increase in risk appetite increases portfolio returns of online users; however, this is not the case for non-online users. Third, online banking promotes debt repayment, and this further encourages risk tolerant investments. In sum, we conclude that financial literacy efforts moderate a positive relationship between use of online banking, risk appetite, and portfolio returns. The positive relationship between use of online banking and debt repayment further increases risk appetite.

• Item Type: MPRA Paper
• Language: English
• Keywords: Online Banking;Portfolio Investmen;Risk Appetite;Debt Repayment;Mortgage Debt
• Subjects: G - Financial Economics > G0 - General > G00 - General; G - Financial Economics > G0 - General > G02 - Behavioral Finance: Underlying Principles; G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice ; Investment Decisions

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