Fintech Nudges: Overspending Messages and Personal Finance Management

64 Pages Posted: 17 Jun 2019 Last revised: 31 Mar 2020

See all articles by Sung Kwan Lee

Sung Kwan Lee

Chinese University of Hong Kong, Shenzhen

Date Written: November 3, 2019


Using large proprietary money management app data from a major commercial bank in Canada, I study how the app users manage their personal finance upon seeing an overspending message on the mobile app. First, I find that the message recipients reduced spending on the following day by C$8.15, which corresponds to 5.35% of their daily average spending, compared to the non-recipients. Second, these fintech nudges had temporary effect on flow spending and resulted in permanent reduction in cumulative spending. Third, the effects are especially pronounced for the users who are older, have higher liquid wealth, are more finance-savvy, are new to the app experience, or reside in a city with a higher fraction of educated population. Fourth, I find suggestive evidence that these effects could spill over from one app user to another app user in the same household. On the other hand, the message recipients were less likely to monitor their accounts via log-ins afterward, which is selective inattention known as the ostrich effect.

Keywords: Fintech, Nudges, Peer Effects, Ostrich Effect

JEL Classification: D12, D14, D90

Suggested Citation

Lee, Sung Kwan, Fintech Nudges: Overspending Messages and Personal Finance Management (November 3, 2019). NYU Stern School of Business, Available at SSRN: or

Sung Kwan Lee (Contact Author)

Chinese University of Hong Kong, Shenzhen ( email )

2001 Longxiang Road
Longgang District
Shenzhen, Guangdong

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