Enhancing customer knowledge: the role of banks in financial well-being

Purpose: The purpose of this paper is to explore the role of banks in enhancing consumer knowledge aiming to increasing customer’s financial well-being. Design/methodology/approach: This research applied two quantitative studies with customers of banks in a Latin American country. The literature review and the results of the data analysis founded the development of a model that relates bank information transparency and subjective financial well-being through consumer financial knowledge. Findings: By being transparent banks may transform the financial well-being of their customers. Particularly, this paper shows that consumer financial knowledge mediates the relationship between bank information transparency and the subjective financial well-being of individuals. However, the mediational effect occurs by subjective but not objective financial knowledge. Research limitations/implications: The mediational model of this research does not take in consideration the role that individual factors play in the exposition and processing of the information provided by banks and its final impact on the subjective well-being of individuals. Also, this paper does not explore potential moderators of the theoretical relationships neither include cultural variables in the analysis. Originality/value: Firm transparency has been related to various constructs in the marketing literature; however, its impact on consumer financial well-being is under-researched. This paper shows that companies need to aim to increase the subjective financial knowledge of their customers as a way to improve ultimate well-being of their customers.