Development of a financial capability model: a hybrid dual-stage partial least square structural equation modelling and artificial neural network analysis

This study investigates the impact of financial knowledge, financial attitude, financial technology, and financial advice on financial capability. Additionally, it analyses the influence of financial attitude and financial capability on financial satisfaction. The research is conducted through an individual-level survey in Albania. Two methods are used: first, partial least square structural equation modelling (PLS-SEM) is used to determine which constructs have a significant effect on financial capability; in the second phase, an artificial neural network (ANN) model is applied to rank the relative influence of significant determinants identified through by PLS-SEM. The findings reveal that financial knowledge and financial technology have a significant impact on financial capability. Furthermore, the study identifies financial attitude and financial capability as key predictors of financial satisfaction. In practice, these insights can help policymakers and financial institutions in Albania develop effective strategies to enhance financial technology programmes and tailor financial education initiatives.