The Finance Brown Bag Seminar is held by the Institute for Finance, Banking and Insurance (WU Vienna) and the Vienna Graduate School of Finance (VGSF). It serves as a presentation platform for PhD students, faculty members, and visitors. An overview of BBS on the website of the Institute for Finance, Banking and Insurance.
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Alberto G. Rossi, Georgetown University
Set it and Forget it: Engineering Investment Habits with FinTech
with Antonio Gargano (University of Houston)
We study how automated investment rules affect saving behavior and investment outcomes using detailed data from a FinTech app designed to help retail investors access mutual funds. Users choose how to design these rules, which vary along dimensions such as frequency, amount, and triggering conditions. Using a randomized encouragement design, we show that automated rules causally increase average savings without crowding out manual contributions. We also show that automated rules reduce trend-chasing behavior: while manual deposits respond strongly to recent returns, automated ones do not, narrowing the gap between fund returns and realized investor returns. However, rule timing remains performance-sensitive—users tend to activate rules after periods of strong returns and suspend them during downturns, especially for equity funds. A survey deployed on the app user population reveals that adopters of automated investment rules are primarily motivated by a desire to avoid procrastination, reduce cognitive load, and simplify decision-making, while non-adopters cite preferences for flexibility and concerns about income volatility. Our findings highlight both the promises and the limitations of automation in improving individual financial outcomes.
