Anchoring and Adjustment Heuristic:Examining its Effects on Customer Decisions in Banking Services in Tiruvallur District

The success of the banking sector depends heavily on the decision-making processes of customers, which are often influenced by various cognitive biases. This research study examines the impact of the anchoring and adjustment heuristic on the financial decision- making processes of customers in the banking sector, with a particular focus on the Tiruvallur district. The success of the banking sector depends to a large extent on customer decision- making, which can be influenced by various cognitive biases. The anchoring and adaptation heuristic, a well-established psychological principle, suggests that individuals tend to rely heavily on initial information when making decisions. The aim of this study is to investigate how this heuristic affects the financial decisions of customers in the banking services offered in Tiruvallur district.
The study examines key factors that influence dependence on the anchoring and adjustment heuristic, including financial literacy, demographic factors, and personal experiences. These factors are tested for their importance and impact on customer decision-making processes. Various statistical tests such as regression analysis, ANOVA and chi-square tests are used to analyse the collected data. These tests help to identify significant relationships between the variables studied and to quantify the extent to which the anchoring and adjustment heuristics influence the financial decisions of customers in the banking sector. The study is based on a sample size of 200 participants and covers a study period of four months. The research results of this study will provide valuable insights into the role of cognitive biases, in particular the anchoring and adjustment heuristics, in shaping the financial decision-making processes of customers in the banking sector. Keywords: Anchoring and adjustment heuristic, financial decisions, banking sector, cognitive biases, behavioural finance