IMPACT OF FINANCIAL SOCIALIZATION ON FINANCIAL BEHAVIOR OF NEPALESE COMMERCIAL BANKS

Abstract

This study explores the impact of financial socialization on the financial behavior of Nepalese commercial banks, focusing on how dimensions such as financial education, cultural influences, and parental influences shape banking practices and financial decision-making. Financial socialization, a critical factor in determining financial outcomes, encompasses the processes through which individuals and institutions acquire financial knowledge and attitudes from various sources. Employing a quantitative research approach, this study analyzes data from a sample of Nepalese commercial banks to assess how financial socialization influences their financial management practices, risk-taking behaviors, and overall financial performance. Descriptive statistics reveal variability in financial socialization factors, highlighting the significance of financial education, cultural influences, and parental guidance in shaping financial behaviors within banks. Correlation analysis indicates strong relationships between these socialization factors and financial behavior indicators, with financial education and cultural influences demonstrating particularly robust associations with effective financial management. Regression analysis further substantiates that financial socialization significantly impacts financial behavior, identifying financial education and cultural influences as key predictors of prudent financial practices. The findings underscore the critical role of financial socialization in enhancing the financial behavior of commercial banks. Financial education is shown to improve decision-making and risk management, while cultural influences and parental guidance contribute to more effective financial strategies. The study suggests that banks should integrate comprehensive financial education programs and consider cultural contexts to foster better financial practices. These insights offer valuable implications for policymakers, financial educators, and bank managers, emphasizing the need for targeted interventions to strengthen financial socialization and improve banking performance in Nepal.