Today, I want to take you on a journey to explore how banking and UPI (Unified Payments Interface) apps might be subtly influencing us to spend more through the principles of behavioural economics. But before we dive into that, let me share the story that inspired this post.

Why Don’t Banking Apps Provide Better Financial Analytics?

This brings us to the big question: Why don’t we see robust financial analytics in these apps when we know how useful they could be?

• Lack of Infrastructure: Unlikely, as financial institutions have ample resources.
• Bad User Experience: These companies have top-tier UX designers, so this doesn’t seem valid.
• Behavioural Economics: Now, this is where it gets interesting.

The Role of Behavioural Economics

Behavioural economics is a field that combines psychology and economics to understand how people make decisions. Unlike traditional economics, which assumes rational decision-making, behavioural economics recognizes that our choices are influenced by emotions, biases, and cognitive limitations.

Are They Cheating Us?

The idea that financial institutions might be using behavioural economics to manipulate our spending habits raises an ethical question: Are banks intentionally withholding tools that could help us manage our money better?

For further reading, check out this study on digital payments and overspending.