Behavioral Bias in the Use of Fintech Applications Among Generation Z

Abstract

The rapid development of globalization and digital technology has significantly transformed financial systems and public financial behavior, particularly among Generation Z. The emergence of financial technology (fintech) has provided easier access to digital financial services such as e-wallets, online investment platforms, mobile banking, and buy now pay later (paylater) services. However, the increasing use of fintech is also associated with various psychological and behavioral biases that influence financial decision-making. This study aims to analyze the influence of behavioral bias on fintech usage among Generation Z by examining the effects of overconfidence, herding behavior, and fear of missing out (FoMO) on digital financial behavior. This research employs a quantitative approach using associative research methods. Data were collected through online questionnaires distributed to Generation Z fintech users in Indonesia. The sampling technique used was purposive sampling, and the collected data were analyzed using multiple linear regression analysis with the assistance of SPSS/SmartPLS software. The results indicate that overconfidence, herding behavior, and FoMO have positive and significant effects on fintech usage among Generation Z. FoMO was identified as the most dominant factor influencing digital financial behavior due to the strong influence of social media and digital trends. The findings support the behavioral finance theory, which explains that financial decisions are not solely based on rational considerations but are also influenced by psychological, emotional, and social factors.This study contributes theoretically to the development of behavioral finance literature in the context of digital finance and provides practical implications for fintech companies and regulators in improving financial literacy and promoting responsible digital financial behavior among Generation Z.