The Adoption of Robo-Advisory among Millennials in the 21st Century: Trust, Usability and Knowledge Perception
Abstract
:1. Introduction
2. Literature Review
2.1. Related Research on Robo-Advisory
2.2. Artificial Intelligence in Service
2.3. Adoption Intention towards Robo-Advisors
2.4. Impact of COVID-19 on Young Tech-Savvy Investors
3. Research Method
3.1. Framework and Hypothesis
3.1.1. Financial Knowledge
3.1.2. Perceived Usability
3.1.3. Perceived Trust
3.2. Research Design
4. Data Analysis and Findings
4.1. Descriptive Analysis
4.2. Pearson’s Correlation Analysis
4.3. Regression Analysis
5. Discussion
6. Recommendations
7. Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Variables | Sources |
---|---|
Financial Knowledge (FK) | [45,63,64] |
Perceived Usability (PU) | [15] |
Perceived Trust (PT) | [49,65] |
Willingness to Adopt (WA) | [66] |
Frequency | Percent | ||
---|---|---|---|
Gender | Female | 42 | 48.8 |
Male | 44 | 51.2 | |
Total | 86 | 100.0 | |
Education | High school | 19 | 22.1 |
Bachelor degree | 44 | 51.2 | |
Master degree | 12 | 14.0 | |
Ph.D./Professional Certification | 11 | 12.8 | |
Total | 86 | 100.0 | |
Employment | Employed full-time | 53 | 61.6 |
Employed part-time | 11 | 12.8 | |
Self-employed | 13 | 15.1 | |
Not employed | 9 | 10.5 | |
Total | 86 | 100.0 | |
Monthly Income | Below MYR 3000 | 6 | 7.0 |
MYR 3000–MYR 5000 | 39 | 45.3 | |
MYR 5001–MYR 10,000 | 25 | 29.1 | |
MYR 10,001–MYR 15,000 | 14 | 16.3 | |
Above 15,000 | 2 | 2.3 | |
Total | 86 | 100.0 | |
Prior Experience | No | 27 | 31.4 |
Yes | 59 | 68.6 | |
Total | 86 | 100.0 |
Mean | Std. Deviation | ||
---|---|---|---|
FK1 | I understood the concept of robo-advisors. | 3.91 | 0.777 |
FK2 | I understood my financial goal when investing with robo-advisors. | 4.02 | 0.881 |
FK3 | I understood my risk tolerance for investing with robo-advisors. | 3.94 | 0.886 |
FK4 | I am able to keep close track of my money affairs using robo-advisors. | 3.58 | 0.913 |
FK5 | I believe robo-advisors make investing easier. | 3.98 | 0.767 |
OVERALL | 3.886 | 0.8448 | |
PU1 | I would find robo-advisors useful in managing investments. | 3.84 | 0.824 |
PU2 | I believe robo-advisors would improve my performance in managing investments. | 3.80 | 0.823 |
PU3 | I believe robo-advisors would improve my productivity in managing investments. | 3.76 | 0.839 |
PU4 | I believe robo-advisors would enhance my effectiveness in managing investments. | 3.77 | 0.850 |
PU5 | The advice offered to me is relevant based on my risk tolerance and goals. | 3.92 | 0.770 |
OVERALL | 3.818 | 0.8212 | |
PT1 | I feel comfortable relying on the advice offered to me. | 3.64 | 0.944 |
PT2 | The advice offered to me has nothing to gain by being dishonest with me. | 4.06 | 0.845 |
PT3 | The advice offered to me has nothing but the client’s interest. | 4.06 | 0.845 |
PT4 | I feel safer that there is an advisor that is making this financial decision with me. | 3.86 | 0.948 |
PT5 | I believe robo-advisory services can be trusted. | 3.88 | 0.773 |
OVERALL | 3.900 | 0.871 | |
WA1 | I could imagine using a robo-advisor as a means of financial management. | 3.81 | 0.805 |
WA2 | I am willing to invest with a robo-advisor. | 3.80 | 0.931 |
WA3 | I could imagine using a robo-advisor instead of a human financial advisor. | 3.76 | 0.894 |
WA4 | I am confident to use robo-advisor to reach my financial goal. | 3.64 | 0.932 |
WA5 | I would recommend friends and family to try robo-advisors. | 3.77 | 0.863 |
OVERALL | 3.756 | 0.885 |
FK | PU | PT | WA | |
---|---|---|---|---|
FK | 1 | 0.815 ** | 0.818 ** | 0.837 ** |
PU | 0.815 ** | 1 | 0.848 ** | 0.894 ** |
PT | 0.818 ** | 0.848 ** | 1 | 0.858 ** |
WA | 0.837 ** | 0.894 ** | 0.858 ** | 1 |
Variables | Standardised Coefficients | Statistical Significance Level |
---|---|---|
Financial Knowledge | 0.227 | 0.006 |
Perceived Usability | 0.492 | 0.000 |
Perceived Trust | 0.255 | 0.005 |
F | 42.84 | 0.000 |
R2 | 0.849 | |
Adjusted R2 | 0.844 |
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Yi, T.Z.; Rom, N.A.M.; Hassan, N.M.; Samsurijan, M.S.; Ebekozien, A. The Adoption of Robo-Advisory among Millennials in the 21st Century: Trust, Usability and Knowledge Perception. Sustainability 2023, 15, 6016. https://doi.org/10.3390/su15076016
Yi TZ, Rom NAM, Hassan NM, Samsurijan MS, Ebekozien A. The Adoption of Robo-Advisory among Millennials in the 21st Century: Trust, Usability and Knowledge Perception. Sustainability. 2023; 15(7):6016. https://doi.org/10.3390/su15076016
Chicago/Turabian StyleYi, Tan Zi, Noor Ashikin Mohd Rom, Nurbani Md. Hassan, Mohamad Shaharudin Samsurijan, and Andrew Ebekozien. 2023. "The Adoption of Robo-Advisory among Millennials in the 21st Century: Trust, Usability and Knowledge Perception" Sustainability 15, no. 7: 6016. https://doi.org/10.3390/su15076016