Digital Trading Platforms, Finfluencer Effects, and Retail Investor Behavior in Emerging Markets

Abstract

This study examines the influence of digital trading platforms on retail investor behavior in emerging markets, using evidence from Nigeria, Kenya, and India. The expansion of mobile-based investment applications, social media financial communities, and FinTech-enabled brokerage platforms has widened retail access to capital markets. However, it has also raised concerns about speculative trading, overtrading, herding behavior, and investor vulnerability to online financial influence. The study is anchored on Behavioral Finance Theory, the Technology Acceptance Model, and Prospect Theory to explain how digital platform features and psychological factors shape retail investment decisions. An explanatory sequential mixed-method design was adopted. Quantitative data were collected from 814 retail investors using platforms such as Bamboo, Trove, Risevest, Zerodha, Groww, eToro, and Chipper Cash Investing, while qualitative insights were obtained through semi-structured interviews. Secondary data were drawn from brokerage reports, Google Trends indicators, and digital financial databases. Data were analyzed using Partial Least Squares Structural Equation Modeling and supplementary statistical analysis in STATA. The findings show that platform accessibility significantly increases trading intensity, while gamification positively influences overtrading. Finfluencer exposure also has a significant positive effect on herding behavior. Financial literacy partially mediates the relationship between digital trading platforms and trading intensity, while risk tolerance strengthens speculative trading behavior. The study concludes that digital trading platforms promote financial inclusion and market access, but also intensify behavioral finance risks. It recommends stronger investor education, ethical platform design, and improved regulation of online financial promotion.