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Description
Labuan Federal Territory, Malaysia’s status as a midshore financial hub and a growing center for Islamic fintech services which has contributed to increased financial activity and digital investment access among its population. As a result, young adults aged 18–35 are becoming increasingly exposed to sophisticated investment opportunities and, correspondingly, to higher risks of financial scams. Despite being tech-savvy era, this demographic often lacks the financial literacy needed to recognize fraudulent schemes, a situation worsened by overconfidence in navigating digital financial tools.
This study investigates the interplay between financial literacy, financial behaviour, financial stress, and scam awareness, drawing on the Theory of Planned Behaviour (TPB) and the Transtheoretical Model of Behaviour Change (TTM) as theoretical frameworks. Utilizing data collected through structured surveys and analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM), the research highlights that financial literacy positively correlates with scam awareness, while financial stress diminishes individuals’ ability to critically evaluate risky opportunities.
By integrating theoretical insights with practical implications, this research contributes to a deeper understanding of financial decision-making and vulnerability to fraud, particularly within Labuan’s unique context of Islamic fintech growth. It emphasizes the urgent need for stage-based financial education, targeted awareness campaigns, and digital literacy initiatives tailored to Labuan’s emerging financial landscape. The findings offer actionable recommendations for policymakers, educators, and financial institutions to empower young adults in Labuan enhancing their capacity to make informed financial decisions and reducing their susceptibility to financial fraud in a rapidly evolving digital economy.
