Exploring The Impact of Behavioural Biases on Digital Financial Product Adoption: An Empirical Study of Decision-Making Among Indian Consumers

Digital financial products have transformed the financial landscape, offering unprecedented convenience to consumers. However, their adoption is influenced not only by rational decision-making but also by the intricate world of behavioural biases. The use of digital banking services has witnessed a notable surge among consumers; yet there remains a segment of the population that exhibits resistance towards embracing these services Jain, Raman, & Bhardwaj, (2023). The primary concern in India is to not just transitioning consumers from conventional banking platforms to digital avenues, but also integrating the unbanked population into the standard banking system through digital finance Kaur, Ali, Hassan, & Al-Emran, (2021). This empirical study delves into the complex relationship between three specific behavioural biases—Avoidance of Losses, Habitual Behaviour, and Cognitive Dissonance—and the adoption of digital financial products among Indian consumers. Moreover, it explores the mediating role of trust within this dynamic and aims to construct a robust conceptual framework to enhance digital financial product adoption in the Indian context. Data for this research were collected from 200 respondents through a structured questionnaire. The empirical analysis aims to illuminate the multifaceted landscape of Indian consumers' decision-making processes concerning digital financial products. By uncovering the roles of Avoidance of Losses, Habitual Behaviour, and Cognitive Dissonance, and by examining the mediating influence of trust, we strive to contribute both academically and practically to the enhancement of digital financial product adoption within the Indian market. This study holds valuable implications for policymakers, banking institutions, and researchers. It prompts contemplation on the influence of behavioural biases in the realm of digital banking services, taking into account the varying user types. Recognizing these biases and their interplay with user characteristics can inform strategies to enhance the adoption and utilization of digital banking services.