The rapid digitalization of the banking sector over the past two decades both globally and in Armenia has significantly expanded opportunities for efficiency, accessibility and financial inclusion. In Armenia, strong digital infrastructure, high smartphone penetration, certain economic regulations and active competition among banks have created favorable conditions for digital banking further technological development and adoption by customers.

However, despite this technological readiness, customer behavior has not evolved at the same pace. Many users continue to rely on physical branches and traditional service channels, even when more convenient and less time-consuming digital alternatives are available. This indicates a persistent gap between technological capability and actual usage.

This paper argues that the primary constraint is not technological, but behavioral. Based on behavioral economics and innovation diffusion theory, the study examines how cognitive biases, perceived risk, trust and habit persistence influence financial decision-making. It also introduces the concept of a “flattening” of the traditional innovation adoption curve in digitally saturated environment.

The findings suggest that digital banking transformation should be understood as a behavioral transition rather than a purely technological process. The study provides conceptual insights into more effective customer behavior management strategies in commercial banks.