BEHAVIOURAL FINANCE IN THE DIGITAL ERA: A STUDY OF DIGITAL NUDGING, RISK PERCEPTION, AND INVESTOR BIASES IN ONLINE TRADING ENVIRONMENTS
CA Mohd Swaleh, Dr N Subbu Krishna Sastry
1.Assistant Professor, CMR University, School of Management, 2.Professor, CMR University, School of Management, Bangalore
Abstract
The rapid growth of financial technology and digital trading platforms has significantly transformed investor behaviour and decision-making processes in modern financial markets. In the digital era, online trading environments increasingly utilize behavioural design techniques such as digital nudging, personalized notifications, algorithmic recommendations, gamification, visual cues, and real-time alerts to influence investor decisions and trading activities. These digital interventions are designed to guide user behaviour, improve platform engagement, and encourage faster financial decision-making. However, the increasing dependence on technology-driven investment environments has also intensified behavioural biases, emotional trading patterns, speculative risk-taking, and irrational investment decisions among investors.
The main aim of the researchers is to examine the influence of digital nudging on investor behaviour, risk perception, and cognitive biases within online trading environments. The study further aims to analyse how FinTech platforms shape investment decisions through behavioural triggers and technological interfaces while evaluating the psychological and financial implications of digital trading practices in the modern investment ecosystem.
The study adopts an empirical and analytical approach by examining investor experiences, behavioural finance theories, FinTech practices, and digital trading patterns. The research identifies that digital nudging techniques significantly affect investor psychology by encouraging impulsive decision-making, overconfidence, herd behaviour, fear of missing out (FOMO), and excessive trading activities. At the same time, digital platforms also improve accessibility to financial markets, provide real-time investment information, and enhance investor participation in digital finance.
The findings reveal that while digital nudging can improve user engagement and financial accessibility, excessive technological influence may increase emotional decision-making and speculative trading risks among investors. The study emphasizes the need for ethical FinTech practices, transparent digital interfaces, investor education, and responsible technological governance to ensure balanced and sustainable investment behaviour in online trading environments.
The researchers in their research concludes that behavioural finance has become increasingly important in understanding investor psychology in technology-driven financial ecosystems.
Keywords: Behavioural Finance, Digital Nudging, FinTech, Investor Behaviour, Risk Perception, Cognitive Biases, Online Trading, Digital Trading Platforms, Financial Technology, Investor Psychology.
Journal Name :
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EPRA International Journal of Economics, Business and Management Studies (EBMS)
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Published on : 2026-05-17
| Vol | : | 13 |
| Issue | : | 5 |
| Month | : | May |
| Year | : | 2026 |