Measuring Individual Financial Access: Scale Development and Validation

Background and Purpose. Individuals need a variety of financial products and services, such as checking/saving accounts, for meeting their daily transaction and saving needs, as well as achieving long-term financial wellbeing through wealth accumulation. “Financial access”, defined as individuals’ access to needed financial products and services, is of keen interest in research and practice related to financial wellbeing. However, little consensus exists about its conceptualization and measurement.

Methods

As part of a larger project aimed at developing a household financial access scale, the researchers designed a survey that included 14 ordinal items to measure three key dimensions of financial access: (1) mainstream financial products and services (domain 1, 4 items; e.g., financial investment products and retirement savings accounts); (2) institutional practices of financial service providers (domain 2, 3 items; e.g., welcoming physical surroundings and service barriers at financial companies); and (3) individual resources and actions for financial access (domain 3, 7 items; e.g., knowledge and affordability of financial services and products). The survey sampling and administration company, Qualtrics, recruited participants and administered the survey online in 2024. Qualtrics recruited 4,094 participants from online panels of individuals who had consented to be contacted for research studies and applied designated quotas on several demographic characteristics to the sample. These quotas reflect the U.S. general population's key demographics (e.g., age, gender) as reported by the U.S. Census. We conducted Exploratory Factor Analysis (EFA), Confirmatory Factor Analysis (CFA), and Item Response Theory (IRT) analyses to examine the item performance in measuring a latent construct of financial access.

Results

The EFA results of these measurement items from this second cross-sectional survey (N = 4,094) were consistent with those from the first cross-sectional survey conducted in 2023 (N = 1,085) within this financial access measurement project. These measurement items clustered well on the hypothesized dimensions of financial access with strong factor loadings. Their robust measurement performance was further confirmed in the CFA and IRT analyses. However, the second-order CFA suggested that the first domain of the latent concept of financial access only had a moderate association with the other two domains, indicating a complex interaction among the financial access domains. Based on the IRT analyses, we proposed a simplified financial access scale (11 items) with a scorecard for researchers and practitioners.

Conclusions and Implications. Using these results, researchers can measure individual financial access that reflects financial access as a multi-dimensional concept. Including aspects beyond ownership of formal financial products and use of services reflects one’s financial environment within which individuals function, as well as individual qualities, abilities, resources and perceptions that play a role in ownership and use of products and services. Thus, this formal financial access scale will help clarify and deepen the conceptualization of financial access, assess the bias and errors in the existing measures, and define the financial access concept boundaries.