The Dark Side of Fintech: How Fintech Triggers Dysfunctional Consumer Behavior

Fintech offers significant convenience and accessibility; however, its adverse effects are increasingly shaping consumer behavior in problematic ways. Consider a young professional trapped in digital debt or a student overwhelmed by cryptocurrency volatility, such scenarios are becoming more prevalent in the digital financial landscape. This study aims to examine the roles of technological literacy, financial literacy, information privacy concerns, debt management patterns, and cybersecurity risks, identified in Study 1 (Delphi study), in influencing mental health and well-being outcomes, as well as dysfunctional consumer behaviors. Using PLS-SEM in Study 2, data were collected from 309 Fintech users to analyze patterns of impulsive spending, compulsive borrowing, and financial anxiety. The findings reveal that while Fintech enhances financial accessibility, it simultaneously increases psychological stress, leads to suboptimal financial decisions, and fosters risky financial behaviors. Notably, financial literacy does not significantly alleviate emotional distress, suggesting that knowledge alone is insufficient. This study highlights the urgent need for responsible Fintech innovation and stronger consumer protection mechanisms to safeguard financial well-being in the digital era.