Behavioral biases and Fintech adoption: Investigating the role of financial literacy

This paper studies the influence of behavioral biases on Fintech adoption. Additionally, the role of financial literacy in adaptation of Fintech services is evaluated. Primary data from customers in the banking sector is gathered using a structured questionnaire. Factor analysis, reliability analysis, and correlation analysis are performed as diagnostic tests. The core purpose is examined through the application of regression model and moderation analysis. Findings reveal that risk-averse customers and overconfident customers are less likely to adopt Fintech services. Additionally, anchoring bias and disposition bias also hinder customers from using Fintech services offered by the banks. Overall, the findings suggest that psychological biases can hinder customers' choices of Fintech services. Financial literacy seems to improve the relationship in a positive direction as people who are financially literate are more adaptive towards Fintech services. The findings of this paper have strong implications for academicians and practitioners. Academicians can find a direction for imparting financial literacy to enhance the acceptability of Fintech services. Also, the findings imply that practitioners should design user friendly interfaces and enhance financial literacy efforts to mitigate bias-driven resistance and improve adoption rates. The study links behavioral biases with the developing sector of Fintech services. Traditionally, investment decisions as an outcome of behavioral biases were the focused dimension. This study opens avenues for research in modern realms of Artificial Intelligence and Fintech.