Religiosity, Religious Identity, and Financial Literacy: The Mediating Role of Moral Values in Trust in Financial Institution and Financial Governance

Abstract

Purpose Public trust in financial institutions plays a critical role in maintaining financial stability, yet
significant trust deficits persist globally, including in Indonesia. This study aims to analyze how
religiosity, religious identity, financial literacy, and moral integrity influence institutional trust in
banks and the government, with moral values (tax compliance and anti-bribery behavior) serving
as mediating variables.
Design/methodology/approach
Using data from the World Values Survey (WVS) Waves 6 and 7, covering 92.628 respondents
across 69 countries, this study employs ordinal logistic regression and mediation analysis to assess
the direct and indirect effects of religiosity, financial literacy, and moral integrity on institutional
trust.
Findings
Religiosity positively influences trust in banks and the government, especially through
participation in religious services and the importance of religion. Financial behaviours like saving
and thrift also enhance institutional trust, while moral deviations such as tax evasion and bribery
reduce it. Religious identity alone negatively affects trust, indicating that internalised moral values
matter more. Mediation results confirm that financial morality bridges religiosity and institutional
trust, emphasizing ethics as the foundation of institutional confidence.
Research limitations/implications
Although relying on secondary data, this study provides cross-cultural insights into how moral and
religious dimensions interact to form institutional trust.
Originality/value
This study integrates religiosity, moral integrity, and financial literacy into a unified model of
institutional trust, providing a multidimensional understanding of how values shape financial
credibility and public confidence.