Perceived Influence of AI-Driven Finfluencer Content on Retail Investors’ Equity Trading Decisions in India

Abstract

The recent heightened retail involvement in equity markets across India has been accompanied by the emergence of AI-based financial influencers known as finfluencers who use predictive analytics and algorithmic analytics to control the mindset of investors. This paper examines the effect of AI-enhanced finfluencer content on the retail investor trading frequency and risk-taking behavior. The convergent mixed-methods design was embraced through the integration of Technology Acceptance Model (TAM) and Prospect Theory by using the survey data of 450 retail investors and semi-structured interviews of 25 participants. Regression findings indicate that perceived AI credibility is a significant predictor of the trading frequency (0.45, p <.001), which is better than the influence of perceived usefulness. As manifested by the positive Nifty 50 monthly returns, which will be described as positive Nifty 50 monthly returns, the correlation between AI credibility and bullish market conditions is notable (50), and the risk-taking increases in the areas of gains. The mediation analysis also shows that the fear of missing out (FOMO) can partially explain the relationship (indirect effect = 0.14, 95% CI [0.08, 0.22]). The qualitative results pinpoint the issues of automation bias and trust in AI-generated financial content supported by the lack of transparency. The results place AI credibility as a reinforcer of behavior but not a neutral informational process.