Digital Hypnotism and Choice Architecture in Financial Robo-Advisor: A Proposed Framework

Abstract

Abstract - The increasing sophistication of financial technology has driven the emergence of robo-advisors—algorithm-based platforms capable of delivering personalized investment recommendations. However, despite improvements in algorithmic accuracy, user compliance with such recommendations remains suboptimal, largely due to cognitive and emotional biases in decision-making. Existing research in behavioral finance, prospect theory, and heuristics demonstrates that investor behavior is shaped by psychological tendencies such as status quo bias, inertia, and framing effects. This study proposes digital hypnotism as a novel approach to address this gap. Drawing from the convergence of classical hypnosis theory and digital technology, digital hypnotism integrates sensory stimuli, suggestive narratives, adaptive personalization, persuasive technology, human–computer interaction, media psychology, and affective computing to subtly influence user perceptions and behaviors. By embedding hypnotic cues within choice architecture and nudging strategies, digital hypnotism offers the potential to shape decision-making at both conscious and subconscious levels, encouraging alignment with long-term investment strategies. Through a literature-based conceptual framework, this study identifies the key elements of digital hypnotism relevant to financial robo-advisors and proposes a structured model for its application. The findings aim to contribute to the behavioral design of fintech solutions, offering practical implications for improving user engagement and adherence to investment recommendations.

Keywords – financial robo-advisor, nugde, choice architecture, digital hypnotism