Digital Financial Services and Sustainable Development: Temporal Trade-Offs and the Moderating Role of Financial Literacy

Digital financial services have transformed consumer financial behavior, yet their effects on sustainable development outcomes remain poorly understood. This study examines how mobile financial services (MFS) usage influences financial behaviors across temporal dimensions and investigates the moderating role of financial literacy from a systemic sustainability perspective. Drawing on Construal Level Theory, Dual Process Theory, and Social Cognitive Theory, we analyze data from 21,757 U.S. adults from the 2021 National Financial Capability Study to explore relationships between MFS usage, financial literacy dimensions—objective knowledge (OK), subjective knowledge (SK), and perceived ability (PA)—and both short-term and long-term financial behaviors. The results reveal a dual temporal pattern: MFS usage negatively affects short-term behaviors, including spending control and emergency preparedness, while positively influencing long-term behaviors such as retirement planning and investment participation. Financial literacy dimensions demonstrate differential moderating effects, with OK providing protective benefits against short-term risks, while PA can paradoxically exacerbate these adverse short-term effects. These findings highlight complex implications for sustainable development, demonstrating how individual behaviors aggregate to influence systemic financial resilience and progress toward Sustainable Development Goals related to poverty reduction, economic growth, and inequality reduction. Policymakers should adopt behaviorally informed regulatory approaches that address temporal trade-offs. Educators should design digital-specific literacy programs emphasizing realistic risk assessment alongside confidence-building, thereby promoting sustainable financial behaviors in increasingly digital environments.