Financial development is arguably determined by economic development which hinges on the interconnectivity between human activities aimed at making end means.

However, we can not shy away from the fact that the development of the financial sector lies on the shoulder of the deficit and surplus key institutional and individual actors and players. With focus on the key individual actors and players, the decisions which also includes reactions, aversions and strategies; of these players are very important.

For example, financial inclusion in Africa especially in Nigeria is majorly limited by the strong aversion for bank products in the rural area due to illiteracy and lack of customer confidence.

Behavioral finance is already a stand-alone field of finance quite appealing for policymakers, stakeholders, investors, and decision-makers as it helps in assessing the behaviors of markets and stocks under various circumstances.

You can further explore our project on RG which sufficiently addresses this issue:

https://www.researchgate.net/project/COVID-19-and-financial-markets

Please have a look at Prof Shiller’s lectures about this topic https://www.youtube.com/watch?v=chSHqogx2CI

so my hum opinion is that behavioral finance will be integrated in finance

It will really revolutionize the finance function very soon.

As opposed to the established traditional finance theory that assumes investors to be "rational" and "mean variance optimizers", behavioral fiance assumes investors to be "normal" and not "rational". For Behavioral finance, investors have limits to their self control and are influenced by their own biases that push them to make cognitive errors that can lead to wrong decisions. Behavioral finance is already integrated in the finance curriculum at most universities around the world. It will not revolutionize the finance discipline but is and will be an aspect of finance framed by specific assumptions (investments decisions are tainted by emotions and feelings). Behavioral finance has a strong future in the finance discipine because it helps avoid decisions driven by psychological factors (emotions, feelings) that ultimately lead to losses. Q.E.D.

Though at present the field is still in nascent stage, I am sure it will be part of everyone's day to day talks soon... The traditional finance/ economics theories are based on assumptions of rationality whereas behavioral finance/ economics reveals the underlying biases that influence decision making. The area helps policymakers and decision makers to maker better policies and decisions which have the intended impact. It has already become a stand-alone field, gaining prominence everyday.

Hey all

BF is already well established, we are at the stage these two schools created together. Interplay is what matters now, especially in these transformational economies. Winning the game has roots in both.

People and Finance is often an unbalanced equation. Finance has its more or less generic rules. But People is a very unhomogeneic term, for the simple reason that we humans are all different and no two of us will “always “ behave and always make the same decision in all the “same” situations.

Which ends up meaning that at best the discipline of Behaviorial Finance can only, like economics, be very much a “coeteris paribus” discipline.

It will yes have interesting basic rules but very broad in basic character.

Dr. John Consiglio

The University of Malta

Indeed J.A. Consiglio

I think it is the most influencing factor that makes the market inefficient. Just remember for example how fear or greed can stop us from taking a good investment decision in a well operated and financially stable company. people can make the stock price decline just because a wrong investment decision.

Very very true Dr Sbaih.

Best wishes.

John Consiglio

In my opinion, behavioral finance will continue to be a developing area of ​​finance in the future. Behavioral finance related to consumer purchases in the future will be determined by the continuation of the development of online payments and settlements, the development of electronic commerce on the Internet, e-commerce, e-logistics, payments made with the use of cryptocurrencies, the possible impact of subsequent waves of the SARS-CoV-2 coronavirus pandemic ( Covid-19) on consumers 'purchasing decisions, the impact of the increase in pro-environmental awareness of citizens on changes in citizens' purchasing preferences, etc. However, in the field of behavioral finance related to investments made in financial markets, including money and capital markets, an important factor may be the development of computerized transaction systems, which are used by financial institutions, including banks and investment funds, for semi-automated transactions in capital markets, e.g. securities markets according to specific criteria.

Happy New Year 2022,

Be safe and healthy,

Best wishes,

Dariusz

The future of behavioral finance necessitates that the research areas of behavioral corporate finance and investor psychology develop richer models of financial decision-making behavior. A greater focus is needed on cross-cultural factors and how they interact with behavioral influences.

Article “Behavioural Factors Influencing Individual Investor's Choic...

There is a great need for research in the field of psychological and sociological foundations of making financial decisions and, more broadly, investing in markets under the influence of various emotions. For practitioners of finance, there is no doubt that the classical theory of finance, assuming the rational actions of homo economicus, and many other rarely or not occurring assumptions (such as equal access to information about products and markets for each market player) is currently insufficient. Behavioral finance will become the leading field in finance in explaining "atypical" market behavior and explaining the area of uncertainty and what results from certain uncertainties in the future. Thus, the field of BF and, more broadly, experimental economics should be particularly promoted and financed through grants. Best regards

First of all, you need to read related research paper and published articles or reports. When you read many reports after do this your understanding power of your topic will be very hight.

Best wishes

Behavioral finance is relatively a new area in finance that applies psychological principles to study the underline causes of investor behavior, price changes, and the subsequent implications on the overall market movement.

It presents a new paradigm shift in the finance literature and therefore expands the horizon of knowledge in understanding the financial market phenomena. The application of neural science and artificial intelligence in the cognitive processes and the resultant affective biases creates a virgin area in the study of behavioral finance which will continue to evolve and therefore creates a tendency for a new stand-alone discipline of study called behavioral finance.