Abstract

Many digital finance areas now include AI technology; however, it is still unclear exactly how people will perceive information and make decisions regarding their money using AI. Current research has primarily focused on the technical aspect of how reliable an AI system is or meeting compliance requirements. However, there has been limited research focused on the behavioral effects of the automated support and nudging provided by these AI systems. This paper addresses this research gap by discussing how the use of automated technology in combination with behavioral design influences the environment in which people are making financial decisions within a digital context. A structured qualitative review was conducted to bring together the findings of studies conducted in the fields of finance, behavioral science, and AI. The review of the literature identifies how AI technology will be used across the various stages in the decision-making process, as well as how behavioral nudges will help reduce the cognitive load and uncertainty involved in making a decision. The identification of only ten studies shows that empirical research at the intersection of AI, nudging, and financial decisions is still in its infancy. While many of the current AI tools are built to assist individuals in making the best decisions, most of the current tools are only designed to support individuals in executing their decisions and do not support tracking goals or enabling later reflections on the decisions made. Based on transparency, clear communication, and user independence, nudges are likely an effective way to increase trust and support users in making higher quality financial choices. Thus, it seems clear that the principles of behavioural design provide an excellent foundation for building transparent and user-centred solutions for digital finance.

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