Digital financial advice solutions – Evidence on factors affecting the future usage intention and the moderating effect of experience

Posted: 3 Dec 2019 Last revised: 5 Nov 2021

See all articles by Johannes M. Gerlach

Johannes M. Gerlach

Chair of Financial Services, Faculty of Business Administration and Economics, Heinrich-Heine-University

Julia K. T. Lutz

Chair of Financial Services, Faculty of Business Administration and Economics, Heinrich-Heine University

Date Written: November 01, 2021

Abstract

Recently, Digital Financial Advice Solutions (i.e., “Robo Advice” or “Robo Advisory”) are emerging rapidly within the financial services sectors, which can be outlined by the respective Assets under Managements’ CAGR of 255.9 % from 2016 to 2018 in Germany (Kaya, 2019). However, these developments imply both opportunities and threats for traditional financial institutions: On the one hand, potential customer out-migrations, the loss of cross-selling potentials and potential yields as well as challenged competitiveness pose significant risks. On the other hand, if traditional banks manage to implement appropriate measures timely, the recent developments also offer great market potentials. Thus, it is inevitable to identify, understand and discuss factors that drive the customers’ future usage intention of Digital Financial Advice Solutions. As a result, we derive, from the traditional financial institutions’ point of view, strategic and managerial implications on how to deal with the currently emerging trends of Digital Financial Advice Solutions. For this purpose, we conducted a questionnaire-based online survey, which ultimately led to 600 evaluable observations. Finally, according to the two strands of literature this study bases on, i.e., the Net Valence Framework and Unified Theory of Acceptance and Use of Technology 2, we built a partial least squares (PLS)-based structural equation model (SEM)1 that incorporates a comprehensive set of variables. In doing so, we contribute to not only the general understanding of Digital Financial Advice Solutions and two different strands of literature but also to the solution of issues that are of great relevance for practitioners, too. Subsequently, this study concludes by the derivation of future research requirements regarding these, both theoretically and practically, important matters.

Keywords: Digital financial advice solutions, Robo advisory, Digitization of traditional wealth management services, Future usage intention, Net valence framework, Unified Theory of Acceptance and Use of Technology 2 (UTAUT2)

JEL Classification: G10, G20, M10, M13, M31, O30

Suggested Citation

Gerlach, Johannes and Lutz, Julia Katharina Theresa, Digital financial advice solutions – Evidence on factors affecting the future usage intention and the moderating effect of experience (November 01, 2021). Journal of Economics and Business, Vol. 117, 2021, Available at SSRN: https://ssrn.com/abstract=3489024 or http://dx.doi.org/10.2139/ssrn.3489024

Johannes Gerlach (Contact Author)

Chair of Financial Services, Faculty of Business Administration and Economics, Heinrich-Heine-University ( email )

Universitätsstrasse 1
Duesseldorf, DE NRW 40225
Germany

HOME PAGE: http://www.fidl.hhu.de/

Julia Katharina Theresa Lutz

Chair of Financial Services, Faculty of Business Administration and Economics, Heinrich-Heine University ( email )

Universitätsstraße 1
Duesseldorf, NRW 40225
Germany

HOME PAGE: http://www.fidl.hhu.de/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
662
PlumX Metrics