# Exploring the Impact of Digital and Financial Literacy on Employee Well-Being in Electronic Banking A Theoretical Perspective

Moustakim Jalal, Baaddi Mohammed

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Moustakim Jalal, Baaddi Mohammed. Exploring the Impact of Digital and Financial Literacy on Employee Well-Being in Electronic Banking A Theoretical Perspective. 7th Edition Of The International Conference On The Management Of Organizations And Territories, Etudes et Recherche en Management des Organisations et des Territoires; Université Sidi Mohamed Ben Abdellah de Fes; Faculté des Sciences Juridiques, Economiques et Sociales; Département De Gestion, Oct 2024, Fes, Morocco, Morocco. 10.6084/m9.fishare.27292047. hal-05031897

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7th Edition Of The International Conference On The
Management Of Organizations And Territories

# Exploring the Impact of Digital and Financial Literacy on Employee Well-Being in Electronic Banking: A Theoretical Perspective

Moustakim Jalal

University of Sidi Mohamed Ben Abdellah, Faculty of Legal, Economic, and Social Sciences of Fes, The Laboratory for Research and Studies in Organizational and Territorial Management

Jalal.moustakim@usmba.ac.ma

Baaddi Mohammed

University of Sidi Mohamed Ben Abdellah, Faculty of Legal, Economic, and Social Sciences of Fes, The Laboratory for Research and Studies in Organizational and Territorial Management

Mohammed. Baaddi@usmba.ac.ma

https://doi.org/10.6084/m9 figshare.27292047.v1

## Abstract

E-banking, also known as electronic banking or online banking, has revolutionized the banking system and industry by providing customers easy and convenient access to financial services through digital and online platforms. The rise of electronic banking has been facilitated by advancements in technology and the proliferation of internet connected devices, allowing customers to conduct various transactions without any location barriers. This article investigates the impact of e-banking on employee well-being, with a significant focus on digital and financial literacy.

**Keywords:** Electronic banking, Digital literacy, Financial literacy, Employee well-being, Cybersecurity
# 1. INTRODUCTION

Using electronic platforms to perform banking services is known as Digital Electronic banking. It enables clients to conduct banking activities remotely, utilizing the convenience and availability offered by the internet (Lau, 1997). Internet banking offers valuable benefits for banks and their customers. Banks can cut costs, reach new customer groups, boost operational efficiency, improve their reputation, and provide better customer service and satisfaction (Jayawardhena and Foley, 2000), increases competition among banks themselves (Muniruddeen, 2007). From the customer's viewpoint, internet banking is a highly convenient and efficient way to manage personal finances. It's available 24/7, allowing you to handle transactions from anywhere without having to physically go to the bank in person (Rotchanakitumnuai and Spence, 2003; Sonja and Rita, 2008). Plus, internet banking keeps you quickly updated with rich information (Shapiro, 1999; Palmer, 2002), provides speedy access to transactions (Mavri and Ioannou, 2006), and offers the convenience of complete self-service (Eriksson and Nilsson, 2007).

Several factors such as the rise in internet access, the popularity of smartphones, and the need for easier banking options have fueled and raged the growth of electronic banking. It provides advantages such as round-the-clock access to services and cost-effectiveness, while also posing obstacles like ensuring the security of transactions and adjusting to demographic shifts (Lau, 1997). Research has shown that perceived ease of use and perceived usefulness are critical determinants of user acceptance of electronic banking services. Muniruddeen (2007) observed that around half of individuals who initially adopt e-Banking services fail to maintain regular usage. Electronic banking sector have been impacting all areas of the financial ecosystem. Financial institutions have been able to streamline their processes, reduce operational costs, and improve service delivery. With automation and data analytics, banks have been able to not only manage their resources better but also give one-on-one services to their customers.

## Problematic

The key issue explored in this study is the impact of digital and financial literacy on employee well-being in the e-banking sector. Employees are often expected to quickly adapt to the evolving technological environment, yet their ability to do so may be hindered by insufficient training or a lack of digital fluency. This disconnect creates a challenge for organizations aiming to optimize e-banking systems while safeguarding employee welfare. The central problem is that although e-banking innovations are designed to improve efficiency, they may inadvertently increase the pressure on employees, leading to higher stress levels and dissatisfaction, especially when employees are not adequately prepared or trained. This study seeks to explore how these literacy gaps influence employee experiences with e-banking, and to what extent these factors affect their overall well-being.

## Research Objectives

In response to this problematic, the objectives of this study are as follows:

* To examine the relationship between digital and financial literacy and employee adaptation to electronic banking systems.

* To investigate the key challenges employees face in the transition to e-banking, focusing on how these challenges affect their job satisfaction and stress levels.
* To evaluate the impact of digital and financial literacy on employee well-being, with particular attention to mental health and professional performance.

* To identify strategies and training programs that can be implemented to improve employee digital and financial literacy and, in turn, enhance their well-being in the workplace.

## 2. Development and Adoption of Electronic Banking:

Electronic banking, commonly referred to as e-banking, has evolved significantly over the years, driven by huge and sophisticated technological advancements and changing consumer behaviors, aiming to enhance efficiency and convenience. The concept emerged in the mid-20th century and it's knowing several transformative phases:

In the 1960s, when the first Automated Teller Machine (ATM) was adopted in the banking sector, it caused a revolution in the industry by providing such basic services as cash withdrawal and deposit to customers outside of bank hours. The first ATM was installed by Barclays Bank in London in 1967 (Gandy, 2012). In the 1980s, development of telecommunications networks was not only made possible but was also the main factor of progress in telebanking, which allowed clients to go in for bank operations over the telephone line. When telebanking systems were introduced, they only offered such simple services as balance inquiries and fund transfers (Jones & Hesterly, 2013). The year 1990s was characterised by the emergence of the online banking system with the introduction of the internet. Banks offered their clients the opportunity to handle their accounts and make transactions online through trustworthy and protection-secured sites. During this time of development, secure features like SSL (Secure Socket Layer) were also incorporated to assure online transactions (Sheng et al., 2011).

At the end of 2000, the existence of mobile devices and the growth of wireless networks led to the development of mobile banking applications with a strong user experience and a reliable user interface. The enhancement of mobile banking applications began as a result of the development of technological equipment. The implication of this move was allowing customers to use their smartphones and tablets as bank teller machines, especially with the introduction of the Near Field communication Technology (NFC), enabling contactless mobile payments via smartphones and other devices. That was quite an outcome that enabled the customers to get their banks information with the highest convenience and accessibility (Mallat 2007) found. Banking online has been constantly improved by the application of up-to-date technologies such as biometric authentication (BA), tokenization, machine learning and artificial intelligence (AI) and blockchain. This innovative technologies are not only for increasing the security but also for improving the customer service, and offering a personalized banking experiences (Siau & Shen, 2003).

## 3. Impact on Employee Well-Being:

The shift towards electronic banking has revolutionized both customer and employee experiences in the financial sector. For customers, e-banking provides unprecedented convenience and flexibility, reducing the need for physical branch visits and allowing for 24/7 access to banking services (Chavan, 2013). The ability to perform transactions from anywhere has been shown to reduce time, effort, and cost for consumers, enhancing their satisfaction with banking services (Ainin et al., 2005; Pikkarainen et al., 2004). However, concerns about the security of personal and financial information persist, with data breaches and identity theft
being significant barriers to the widespread adoption of e-banking (Featherman & Pavlou, 2003; Kesharwani & Bisht, 2012). Maintaining high standards of cybersecurity is essential for protecting customer well-being and trust (Yousafzai et al., 2010). Studies indicate that consumers are more likely to adopt electronic banking when banks provide clear and transparent information regarding privacy and data protection policies (Suh & Han, 2002).

For employees, the adoption of digital platforms in banking can lead to both opportunities and challenges. On the one hand, electronic banking automates routine and repetitive tasks, such as data entry and transaction processing, which can free up employees to focus on more complex and intellectually stimulating activities (Kim & Lee, 2008; Pantano & Di Pietro, 2012). This shift in job responsibilities has been linked to higher job satisfaction, as employees are given more opportunities to engage in creative problem-solving and decision-making tasks (Karatepe et al., 2010). Moreover, electronic banking has the potential to reduce occupational stress by decreasing workloads and simplifying daily tasks (Kashyap & Kashyap, 2021).

Despite these advantages, the rapid technological changes in the banking sector can present challenges for employees, particularly those who struggle with adapting to new digital tools and platforms (Sohail & Shanmugham, 2003). The constant need for skill development and retraining can create stress and anxiety for some employees, especially older workers who may be less comfortable with technology (Rangarajan, 2018). Research by Cheng et al. (2016) highlights the importance of continuous professional development and training programs in helping employees adjust to technological changes. Offering targeted training and support can significantly improve employee well-being, reduce burnout, and enhance overall job performance (Laukkanen et al., 2007; Buera et al., 2020). Furthermore, digitalization in banking has reshaped the nature of interpersonal interactions in the workplace. Virtual communication channels and the use of digital tools for collaboration can create a sense of isolation among employees, reducing the level of direct human interaction (Pantano & Priporas, 2016). Studies by Tarafdar et al. (2015) emphasize that while digital tools increase productivity, they can also contribute to work overload and "technostress," particularly in environments that lack proper support systems and work-life balance initiatives.

## 4. Cybersecurity In Electronic Banking:

Although electronic banking offers oodless of advantages, it also comes with various challenges which is cybersecurity vulnerabilities. The growing frequency of cyberattacks targeting banking systems presents considerable dangers for both banks and their clients. Cybersecurity risks like phishing, malware, and hacking may cause unauthorized entry to critical financial data, leading to financial losses and erosion of customer confidence (Kumar & Mukherjee, 2013; Goel & Jain, 2018). According to Johnson's (2018) study, it is essential to have strong cybersecurity measures in place to safeguard electronic banking systems against possible threats. Encryption, multi-factor authentication, and routine security audits are important for effective cybersecurity (Bauer & Hein, 2006; Renaud, 2012). Additionally, banks are required to allocate resources towards cybersecurity education campaigns to inform customers about secure practices for online banking (AlHogail, 2015). Another gap that restricts the use of online banking and increases the chances of cyber threats, especially for customers with limited digital literacy, is the problem of not having the internet neither the knowledge nor the technology for fully using e-banking services (van Dijk, 2006; Ono & Zavodny, 2007). Financial institutions ought to overcome these problems in order to guarantee the safe and widespread use and adoption of online banking. This involves not just putting in place strong cybersecurity measures, but also promoting digital inclusion and literacy. Future studies should
concentrate on creating more sophisticated cybersecurity tactics and plans to safeguard banks and clients against new dangers (Choi et al., 2016; Kshetri, 2018).

**5. Challenges and Opportunities:**

E-banking sector is greatly affected by cyberattacks. Even with technological progress, risks such as phishing, malware, reverse engineering, and data breaches continue to develop, endangering sensitive customer information and financial resources. Integrating older systems with new technologies is difficult and requires a substantial investment in infrastructure and technical expertise (Gonzalez et al., 2010). Hong (2012) recommends that financial institutions should continuously improve their security procedures and dedicate resources to advanced cybersecurity measures to protect against these risks.

Banks face challenges in meeting strict regulations regarding data protection and finance, potentially leading to substantial fines and harm to their reputation (Zavolokina et al., 2016). Certain clients still refuse to use internet banking because they have worries about security. Education and user-friendly interfaces are essential in encouraging acceptance and dealing with these concerns (Lee & Chung, 2009). Both workers and clients need to continuously acquire new skills and adjust to rapid technological progress. Banks must provide ongoing training programs to ensure their employees stay proficient in the latest technologies and cybersecurity practices (Kim et al., 2009).

Automating routine tasks in e-baking is a major key into boosting employees well-being, thereby reducing workload and allowing them to focus on strategic activities and more complex tasks, potentially increasing job satisfaction (Kariuki, 2015). Additionally, it supports remote work, offering flexibility that can reduce stress and enhance overall well-being, making it a valuable perk for employees (Nijp et al., 2012). To secure the banking sector, trainings and professional development workshops are needed, enhancing employees' competencies (Huang & Lin, 2011). Automating regular transactions, through electronic banking enables employees to concentrate more on personalized customer service and advisory roles, leading to stronger customer relationships and job satisfaction (Laukkanen & Pasanen, 2008). This evolving environment promotes innovation, encouraging employee creativity and collaboration, which boosts engagement and well-being (Kohli & Grover, 2008).

Training and professional development opportunities are needed to enhance employees' competencies and career prospects when integrating electronic banking systems (Huang & Lin, 2011). Automating regular transactions through electronic banking enables employees to concentrate on individualized customer service and advisory positions, leading to improved customer relationships and job satisfaction (Laukkanen & Pasanen, 2008). This changing setting fosters creativity and collaboration among employees, leading to increased engagement and well-being (Kohli & Grover, 2008). To optimize electronic banking benefits and address challenges, banks can implement strategies such as Providing comprehensive training in digital literacy and cybersecurity (Al-Jabri & Sohail, 2012), Creating a supportive work environment with mental health support and work-life balance initiatives (Cooper & Cartwright, 1994). Educating customers about electronic banking benefits and simplifying user interfaces (Zhao et al., 2008). Investing in cybersecurity measures, conducting regular audits, and training employees to mitigate cyber threats (Srinivas, 2019). Establishing feedback mechanisms for continuous improvement ensures that electronic banking solutions meet both employee and customer needs (Parasuraman & Zinkhan, 2002).
## 6. CONCLUSION

Technological advancements has changed how banking services are provided. Although there's many advantages, there's also many hindrances such as cybersecurity risks and meeting regulatory standards. Financial institutions need to prioritize investing in digital and financial literacy training for customers and employees in order to successfully embrace new technologies and overcome obstacles. While electronic banking can boost employee satisfaction and well-being by decreasing workloads and offering remote work options, it also demands continuous learning and adjustment to keep up with technological up to date advancements. Banks require conducive work environments that encourage continuous learning and offer resources for employee growth.

The importance of cybersecurity still exists, necessitating strong tactics and frequent updates to safeguard confidential sensitive data. Ensuring that both employees and customers are educated on cybersecurity best practices is crucial for creating a secure banking environment. Banks should embrace innovative solutions, promote continuous improvement, and engage in open communication with stakeholders to overcome integration difficulties such as technological barriers and customer resistance.

To sum up, electronic banking has the potential to enhance both employee welfare and organizational effectiveness. By placing emphasis on enhancing literacy skills, maintaining cybersecurity measures, and cultivating a positive work culture, banks can successfully overcome obstacles and optimize advantages. Further investigation is needed to delve deeper into these dynamics in order to improve banking security and efficiency.
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