Integrated model of financial literacy, digital trading platforms, and behavioural biases (FL–DT–BB): A comprehensive review of retail investors’ investment decisions

The rapid digitalisation of financial markets has increased retail investor participation, particularly in emerging economies such as India. However, existing literature largely examines financial literacy, digital trading platforms, and behavioural biases independently, limiting an integrated understanding of their combined influence on retail investors’ investment decision-making. This study examines the investment behaviour of retail investors by synthesising prior research on financial literacy, digital trading platforms, and behavioural biases. Specifically, the study investigates how financial literacy and digital trading platform characteristics interact through behavioural biases to influence retail investors’ investment decision-making and develops an integrated Financial Literacy–Digital Trading Platforms–Behavioural Biases (FL–DT–BB) conceptual framework. The study employs a Systematic Literature Review methodology guided by the PRISMA framework. Academic literature was collected from Scopus, Web of Science, JSTOR, ProQuest, SSRN, ResearchGate, and Google Scholar. A total of 122 records were identified, of which 71 studies were retained for qualitative synthesis after screening. The results show that financial literacy improves investors’ understanding of risk–return trade-offs but does not independently ensure rational investment decision-making in digital trading contexts. Evidence further indicates that digital trading platforms, characterised by real-time information and algorithmic features, interact with behavioural biases such as overconfidence, herding, anchoring, and fear of missing out (FOMO) to influence retail investors’ investment decision-making. The findings suggest that retail investors’ investment decisions and outcomes are influenced by the interaction of financial literacy, digital trading platforms, and behavioural biases rather than by any single factor alone. JEL Classification Codes: G41, G11, D14.