Brain substrates explain diferences in the adoption and degree of fnancial digitalization

Abstract

This study analyzes neural responses connected to trust and risk to explain fnancial digitalization decisions. It shows that brain responses distinctively inform diferences in the adoption of digital fnancial channels that are not shown by any other sociodemographic or behavioral indicators. From a methodological standpoint, the study explores if usage patterns of digital fnancial channels and instruments are associated with psychological and biological indicators; it uses functional magnetic resonance imaging (fMRI) to investigate whether fnancial digitalization decisions are linked to the evoked brain response to the safety associated with video images of fnancial transactions through digitalized and non-digitalized channels; it conducts trust and risk neuro-experiments to identify their impact on fnancial digitalization decisions and it analyzes whether brain structure is linked to fnancial digitalization behavior. The fndings suggest that high and low frequency users exhibit diferences in brain function and also in volume and fractional anisotropy values. A higher frequency of use of fnancial digital fnancial services is associated with higher brain activation linked to insecurity (lower safety neural evoked responses during the video task and an altered white matter microstructure of the cingulum). Additionally, high frequency users of digital fnancial channels exhibit enhanced activation of brain areas linked to emotional processing during the trust game. These fndings have important implications for the design of public policies to enhance fnancial inclusion through technology and the segmentation and service distribution strategies of private fnancial institutions.