International Journal of Advanced Research in ISSN: 2278-6244 IT and Engineering Impact Factor: 6.690 Vol. 6 | No. 2 | February 2017 www.garph.co.uk IJARIE | 1 EFFICACY OF ARTIFICIAL NEURAL NETWORK FOR FINANCIAL LITERACY PREDICTION Meenakshi Sood, Assistant Professor, Department of Electronics and Communication Engineering, Jaypee University of Information Technology Waknaghat, Solan, Himachal Pradesh Puneet Bhushan, Assistant Professor, University Business School Himachal Pradesh University, H.P. Abstract: Financial forecasting is becoming more and more dependent on advanced computer techniques due to high non-linearity and high volatility nature of finance domains. An Artificial Neural Network (ANN) is the current technique being used that can model flexible linear or non-linear relationship among variables and predict financial data more accurately. Financial Literacy (FL) is a combination of attitude, knowledge, skill and behavior to achieve desired financial goals. FL shows non linear dependencies on various socio demographic attributes which are in turn responsible for FL level of an individual. This paper brings neural networks applications in the financial domain. An attempt has been made in this research work to analyze the usefulness of artificial neural network for predicting FL level of individuals. The classification accuracy of 75% has been achieved through MLPNN that can help in knowing the efficacy of demographic determinants. The studies done in this work show that neural network have great promise for financial applications. Keywords: Financial Literacy; Artificial Neural network; Sensitivity; ROC. 1. INTRODUCTION Financial literacy is the knowledge regarding personal financial matters. Financial literacy enables individuals to handle their personal finances effectively and efficiently [1]. Thus financially literate individuals feel more satisfied and confident in decisions relating to money matters. The ability to handle personal finances is must as it helps in achieving individuals financial well being. Financial literacy has gained much importance in the recent past on account of changing financial landscape. These days many new innovative financial products are available in the market as investment options. Most individuals are not willing to invest in such products due to lack of knowledge regarding such products. More chances of getting