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One size does not fit all: Young retail investors’ initial trust in financial robo-advisors

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  • Nourallah, Mustafa

Abstract

Financial robo-advisors (FRAs) are a cutting-edge financial technology offering automated services that relies on artificial intelligence. However, few studies have investigated how young retail investors (YRIs) build trust in FRAs. Another neglected area is whether FRAs’ universal (“one-size-fit-all”) model will succeed or should take account of cultural dimensions. Based on the initial trust perspective and the unified theory of acceptance and use of technology, this study develops a conceptual model of YRIs’ initial trust in FRAs, testing it in two countries from different parts of the world, i.e., Malaysia and Sweden. The results indicate that trust propensity, performance expectancy, and hedonic motivation address initial trust in FRAs, which in turn drives behavioural intention to use this technology. Although most results are similar in the two countries, there are indications of cultural differences regarding what influences YRIs’ initial trust in FRAs.

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  • 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).
    • Handle: RePEc:eee:jbrese:v:156:y:2023:i:c:s0148296322009353
    DOI: 10.1016/j.jbusres.2022.113470
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    2. Berrin Arzu Eren, 2024. "Antecedents of robo-advisor use intention in private pension investments: an emerging market country example," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(3), pages 683-698, September.
    3. Zhu, Hui & Vigren, Olli & Söderberg, Inga-Lill, 2024. "Implementing artificial intelligence empowered financial advisory services: A literature review and critical research agenda," Journal of Business Research, Elsevier, vol. 174(C).

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