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The Mediating Role of the Financial Recommender System Advising Acceptance in the Relationship between Investments Trust and Decision-Making Behavior

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  • Cuc Lavinia Denisia

    (Aurel Vlaicu University of Arad, Arad, România Center for Economic Research and Consultancy)

  • Rad Dana

    (Aurel Vlaicu University of Arad, Arad, România)

  • Hațegan Camelia Daniela

    (West University of Timisoara, Timiș, România)

  • Trifan Vanina Adoriana

    (Aurel Vlaicu University of Arad, Arad, România)

  • Ardeleanu Titus

    (Aurel Vlaicu University of Arad, Arad, România)

Abstract

The issue discussed in this paper is how the financial recommendation system intertwines the individuals’ distrust in the act of investing and the outcome of the incurred damages. This study involving a total of 150 participants was conducted. The purpose of the current research is elucidated by identifying the affected variables and using descriptive statistics and correlation analysis. The survey shows that weakening confidence in investments correlates positively with formulation of a demand for the recommendation service of a financial advisor on the one hand, and with caution and rational thinking on the other, which steer the path to careful and rational investment decisions. An attempt to study mediation was performed using PROCESS Model 4 and it should be noted that financial recommender system advising acceptance mediated the relationship between distrust of quality of investment and cautious decision-making. Significant standardized coefficients gave direct evidence of a cause-effect relationship between a lowered trust in decision-making and the preceding caution, with financial advisement adding up to guidance as a mediator illustrating the significance of its role in decision-making. The trust transfer theory that claims the transfer of trust by individuals is just one of the previous experiences, is possibly a good explanation of the outcomes. Losses due to investments may render investors skeptical, and they eventually transfer trust in these financial market to other sources, such as financial recommender systems. The existing paper gets us to the more complex connection between financial information systems, trust, and the choice in the asset industry which, in turn leads to better understanding of the psychological processes that a person uses while making an investment decision. Furthermore, this article highlights the present practicality that is usually directly tied to the process of adoption and integration of financial technology. The results of this study indicate that it may be possible to reduce drastically the negative effect of drops in the confidence of investments in this case or maybe even eliminate the problem. It is clear that the universality of the financial recommendation system is a good helper in this direction.

Suggested Citation

  • Cuc Lavinia Denisia & Rad Dana & Hațegan Camelia Daniela & Trifan Vanina Adoriana & Ardeleanu Titus, 2024. "The Mediating Role of the Financial Recommender System Advising Acceptance in the Relationship between Investments Trust and Decision-Making Behavior," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 18(1), pages 2260-2273.
    • Handle: RePEc:vrs:poicbe:v:18:y:2024:i:1:p:2260-2273:n:1030
    DOI: 10.2478/picbe-2024-0190
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    References listed on IDEAS

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