Perpustakaan Digital ITB

The digitization of financial services is changing the way people participate in the financial markets as well as their daily lives. Automated technology in the online investment platforms have made it easier for people, especially Generation Z to invest because this feature aims to create an easier way to access the investment process by integrating financial services into investment selections. This research will focus on the relation between financial literacy and investment decisions. Understanding how money functions in today's culture, as well as how one manages and invests their money, is referred to as financial literacy. Financial literacy is divided into four aspects such as behaviour, skill, knowledge, and attitude. By matching the proper financial resource to the right opportunity, investment decisions are made to generate the highest returns. Risks and rewards, two crucial financial management factors, are taken into consideration when making these selections. This study will measure how impactful is financial literacy in people’s decision on investment. The population of this research is the members of Generation Z, people who were born in 1997 to 2021, and are fulfilling the requirements to do an investment, that specifically live in Bandung, Indonesia. Generation Z were chosen because in the future they will take over all of the important roles in Indonesia. Generation Z can learn new information quickly since technology permeates every aspect of their lives. They can learn from this how sound money management can pave the way for a better future. In fact, most of them are not literate well, according to a survey conducted by Otoritas Jasa Keuangan in 2019. This could lead to unsuccessful investment. Therefore, this study is necessary to gauge and gain a deeper understanding of how knowledgeable Generation Z is about money-related topics, particularly investing. Online questionnaires were conducted and there were more than 200 respondents who participated in this research. More than 50% of the respondents are female. The respondents are dominated with students either a university student or high school student with the age between 18 to 21 years old. Quantitative method was used to analyse the data collected. The relationship between financial literacy and investment decision was analysed using linear regression with SPSS software. Scientists and academicians all across the world utilize SPSS, a statistical program created by IBM. This statistical tool may be used to run a number of different statistical tests, and it is very user-friendly. Due to the fact that researchers use linear regression, SPSS is the best statistical tool to use. The study's findings show how investing decisions are impacted by financial literacy and offer suggestions for those working in the financial industry. The result showed that financial literacy affected people’s investment decisions. But, Generation Z’s financial literacy level is still relatively low. Hence, the government has to work hard to increase the financial literacy level of the community so that the financial service provider can have more clients. Hopefully this research can give some guidance for people who are experts in the financial sector and can spread more awareness regarding the importance of finance.