IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i7p6016-d1112139.html
   My bibliography  Save this article

The Adoption of Robo-Advisory among Millennials in the 21st Century: Trust, Usability and Knowledge Perception

Author

Listed:
  • Tan Zi Yi

    (Faculty of Management, Multimedia University, Cyberjaya 63100, Selangor, Malaysia)

  • Noor Ashikin Mohd Rom

    (Faculty of Management, Multimedia University, Cyberjaya 63100, Selangor, Malaysia)

  • Nurbani Md. Hassan

    (UniKL Business School, Universiti Kuala Lumpur, Kuala Lumpur 50250, Kuala Lumpur, Malaysia)

  • Mohamad Shaharudin Samsurijan

    (School of Social Science, Universiti Sains Malaysia, Gelugor 11800, Pulau Pinang, Malaysia)

  • Andrew Ebekozien

    (School of Social Science, Universiti Sains Malaysia, Gelugor 11800, Pulau Pinang, Malaysia
    Department of Construction Management and Quantity Surveying, University of Johannesburg, Johannesburg 2006, South Africa
    Department of Quantity Surveying, Auchi Polytechnic, Auchi 312001, Nigeria)

Abstract

Robo-advisor has become the new personal wealth management and investment method. Nonetheless, certain predicaments are faced by robo-advisor companies as a tech-savvy young group of individuals seems to be less willing to adopt robo-advisory. This study investigates millennials’ adoption of robo-advisory in terms of financial knowledge, trust and usability perception in the 21st century to enhance sustainability. This quantitative study focuses on individuals belonging to the millennial generation who were born between 1981 and 1996. The findings indicate that the millennials who possess financial knowledge, as well as perceived usability and trust have a significant positive effect on the willingness to embrace robo-advisory as a tool for wealth management. The higher the financial knowledge of an individual, the more likely they are willing to adopt a robo-advisor. Government may provide appropriate avenues to enhance financial knowledge, and credible and user-friendly platforms with resources to boost the millennials’ usage of robo-advisors for their wealth management. With robust artificial intelligence, robo-advisory continues to support users, especially millennials, through three dimensions of sustainable development: environment, society, and economy.

Suggested Citation

  • Tan Zi Yi & Noor Ashikin Mohd Rom & Nurbani Md. Hassan & Mohamad Shaharudin Samsurijan & Andrew Ebekozien, 2023. "The Adoption of Robo-Advisory among Millennials in the 21st Century: Trust, Usability and Knowledge Perception," Sustainability, MDPI, vol. 15(7), pages 1-16, March.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:7:p:6016-:d:1112139
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/7/6016/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/7/6016/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Melinda Timea FULOP & Nicolae MAGDAS, 2022. "Opportunities And Challenges In The Accounting Profession Based On The Digitalization Process," European Journal of Accounting, Finance & Business, "Stefan cel Mare" University of Suceava, Romania - Faculty of Economics and Public Administration, West University of Timisoara, Romania - Faculty of Economics and Business Administration, vol. 10(2), pages 38-45, June.
    2. Meyll, Tobias & Walter, Andreas, 2019. "Tapping and waving to debt: Mobile payments and credit card behavior," Finance Research Letters, Elsevier, vol. 28(C), pages 381-387.
    3. Thakor, Anjan, 2020. "Corrigendum to: Fintech and Banking: What Do We Know?," Journal of Financial Intermediation, Elsevier, vol. 43(C).
    4. David Risi & Falko Paetzold & Anne Kellers, 2021. "Wealthy Private Investors and Socially Responsible Investing: The Influence of Reference Groups," Sustainability, MDPI, vol. 13(22), pages 1-24, November.
    5. Umair Akram & Melinda Timea Fülöp & Adriana Tiron-Tudor & Dan Ioan Topor & Sorinel Căpușneanu, 2021. "Impact of Digitalization on Customers’ Well-Being in the Pandemic Period: Challenges and Opportunities for the Retail Industry," IJERPH, MDPI, vol. 18(14), pages 1-21, July.
    6. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    7. Seiler, Volker & Fanenbruck, Katharina Maria, 2021. "Acceptance of digital investment solutions: The case of robo advisory in Germany," Research in International Business and Finance, Elsevier, vol. 58(C).
    8. Jünger, Moritz & Mietzner, Mark, 2020. "Banking goes digital: The adoption of FinTech services by German households," Finance Research Letters, Elsevier, vol. 34(C).
    9. Bernardo Nicoletti, 2017. "Financial Services and Fintech," Palgrave Studies in Financial Services Technology, in: The Future of FinTech, chapter 2, pages 3-29, Palgrave Macmillan.
    10. Itay Goldstein & Wei Jiang & G Andrew Karolyi, 2019. "To FinTech and Beyond," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 1647-1661.
    11. Lopez, Juan Carlos & Babcic, Sinisa & De La Ossa, Andres, 2015. "Advice goes virtual:how new digital investment services are changing the wealth management landscape," Journal of Financial Perspectives, EY Global FS Institute, vol. 3(3), pages 156-164.
    12. Brenner, Lukas & Meyll, Tobias, 2020. "Robo-advisors: A substitute for human financial advice?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 25(C).
    13. Bernardo Nicoletti, 2017. "The Future of FinTech," Palgrave Studies in Financial Services Technology, Palgrave Macmillan, number 978-3-319-51415-4, November.
    14. Mikhail Beketov & Kevin Lehmann & Manuel Wittke, 2018. "Robo Advisors: quantitative methods inside the robots," Journal of Asset Management, Palgrave Macmillan, vol. 19(6), pages 363-370, October.
    15. Necmi K. Avkiran & Christian M. Ringle (ed.), 2018. "Partial Least Squares Structural Equation Modeling," International Series in Operations Research and Management Science, Springer, number 978-3-319-71691-6, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nicole Maria Namyslo & Dominik Jung & Timo Sturm, 2025. "The state of robo-advisory design: A systematic consolidation of design requirements and recommendations," Electronic Markets, Springer;IIM University of St. Gallen, vol. 35(1), pages 1-29, December.
    2. Nargis Mohapatra & Sameer Shekhar & Rubee Singh & Shahbaz Khan & Gilberto Santos & Sandro Carvalho, 2025. "Unveiling the Nexus Between Use of AI-Enabled Robo-Advisors, Behavioural Intention and Sustainable Investment Decisions Using PLS-SEM," Sustainability, MDPI, vol. 17(9), pages 1-21, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Seiler, Volker & Fanenbruck, Katharina Maria, 2021. "Acceptance of digital investment solutions: The case of robo advisory in Germany," Research in International Business and Finance, Elsevier, vol. 58(C).
    2. Mohamed Bouteraa & Brahim Chekima & Nelson Lajuni & Ayesha Anwar, 2023. "Understanding Consumers’ Barriers to Using FinTech Services in the United Arab Emirates: Mixed-Methods Research Approach," Sustainability, MDPI, vol. 15(4), pages 1-22, February.
    3. Bai, Zefeng, 2021. "Does robo-advisory help reduce the likelihood of carrying a credit card debt? Evidence from an instrumental variable approach," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).
    4. Cardillo, Giovanni & Chiappini, Helen, 2024. "Robo-advisors: A systematic literature review," Finance Research Letters, Elsevier, vol. 62(PA).
    5. M. M. Naeser Seldal & Ellen K. Nyhus, 2022. "Financial Vulnerability, Financial Literacy, and the Use of Digital Payment Technologies," Journal of Consumer Policy, Springer, vol. 45(2), pages 281-306, June.
    6. Brenner, Lukas & Meyll, Tobias, 2020. "Robo-advisors: A substitute for human financial advice?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 25(C).
    7. Sufian Radwan Almanaseer & Zaher Abdel Fattah Al-Slehat & Bader Mustafa Al Sharif & Sulieman Daood Aloshaibat & Yazan Emnawer Al-Haraisa & Mohammad Abdlwhab Almahasneh, 2024. "Financial Literacy and Mobile Banking Usage: The Moderating Role of Demographic Characteristics," International Review of Management and Marketing, Econjournals, vol. 14(6), pages 424-432, October.
    8. Chen, S. & Doerr, S. & Frost, J. & Gambacorta, L. & Shin, H.S., 2023. "The fintech gender gap," Journal of Financial Intermediation, Elsevier, vol. 54(C).
    9. Sant'Anna, Dário A.L.M. & Figueiredo, Paulo N., 2024. "Fintech innovation: Is it beneficial or detrimental to financial inclusion and financial stability? A systematic literature review and research directions," Emerging Markets Review, Elsevier, vol. 60(C).
    10. Tianlei Pi & Haoxuan Hu & Jingyi Lu & Xue Chen, 2022. "The Analysis of Fintech Risks in China: Based on Fuzzy Models," Mathematics, MDPI, vol. 10(9), pages 1-13, April.
    11. Guo, Pin & Zhang, Cheng, 2023. "The impact of bank FinTech on liquidity creation: Evidence from China," Research in International Business and Finance, Elsevier, vol. 64(C).
    12. Maik Dehnert & Josephine Schumann, 2022. "Uncovering the digitalization impact on consumer decision-making for checking accounts in banking," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(3), pages 1503-1528, September.
    13. Zaleska Małgorzata & Kondraciuk Przemysław, 2019. "Theory and Practice of Innovation Development in the Banking Sector," Financial Sciences. Nauki o Finansach, Sciendo, vol. 24(2), pages 76-87, June.
    14. Hasan, Iftekhar & Kwak, Boreum & Li, Xiang, 2024. "Financial technologies and the effectiveness of monetary policy transmission," European Economic Review, Elsevier, vol. 161(C).
    15. Sharina Tajul Urus & Intan Salwani Mohamed, 2021. "A Flourishing Fintech Ecosystem: Conceptualization and Governing Issues in Malaysia," Business and Economic Research, Macrothink Institute, vol. 11(3), pages 106-131, December.
    16. Nourallah, Mustafa, 2023. "One size does not fit all: Young retail investors’ initial trust in financial robo-advisors," Journal of Business Research, Elsevier, vol. 156(C).
    17. Jing Jian Xiao & Chunsheng Tao, 2020. "Consumer finance/household finance: the definition and scope," China Finance Review International, Emerald Group Publishing Limited, vol. 11(1), pages 1-25, June.
    18. Yasmeen Ansari & Mansour Saleh Albarrak & Noorjahan Sherfudeen & Arfia Aman, 2022. "A Study of Financial Literacy of Investors—A Bibliometric Analysis," IJFS, MDPI, vol. 10(2), pages 1-16, May.
    19. Kakhkharov, Jakhongir & Bianchi, Robert J., 2022. "COVID-19 and policy responses: Early evidence in banks and FinTech stocks," Pacific-Basin Finance Journal, Elsevier, vol. 74(C).
    20. Maria Gaia Soana & Doriana Cucinelli & Beatrice Ronchini, 2025. "Advisors for micro-entrepreneurs: is one as good as another in accessing alternative finance?," Small Business Economics, Springer, vol. 64(3), pages 989-1033, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:7:p:6016-:d:1112139. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.