Behavioral Design in Finance
“Using nudging, financial technology (fintech) apps like Acorns, Robinhood, and YNAB (You Need a Budget) try to affect saving, investment, and budgeting habits. By presenting images of long-term savings or compounding interest, these platforms sometimes incorporate nudges based on hyperbolic discounting, therefore motivating users to give long-term advantages precedence over near-term satisfaction. For instance, Acorns forces consumers to round up regular purchases and automatically invest the spare change—this depends on decoupling, where spending and saving grow psychologically distinct, therefore lowering the agony of saving.
Commonly also found in default settings like auto-investment plans, fintech nudges help to lower financial decision-making friction. Moreover, visual feedback and reward systems support good behavior and view financial operations as easy and satisfying instead of difficult or stressful. … Though nudging in health or savings applications might encourage positive conduct, nudging on social media or e-commerce can also lead to compulsive involvement or needless consumption. Hence, digital nudging should be deliberately created to match platform objectives with user goals, therefore maintaining transparency, respect for autonomy, and informed consent” (Khound & Mishra, 2025).
This article is really interesting when it is put in the context of online banking apps and the financial decisions that someone may take. We live in a digital age and are accustomed to getting notifications and nudges on our phones for a multitude of reasons throughout the day. These notifications that we received could be utilized to help with the financial decision making and goals of a user base. One of the most popular saving apps today, Acorns, is a great example of an interface that allows for long term savings goals to be met easier by breaking it down into everyday interactions.
A big part of the reason that many people fall short of their goals is that they seem overwhelmingly large, however once the psychological barriers are removed the goal becomes more clear and attainable. While these notifications and nudges can have a positive impact there is a chance that they can potentially exploit the users, so finding an ethical middle ground is important when implementing it into a financial situation.
References:
Khound, S., & Mishra, P. (2025). Digital nudging in financial technology apps: Motivating savings and investment behavior.
Ai was not used in the creation of this article
