Counteracting dark sides of robo-advisors: justice, privacy and intrusion considerations

Abstract

PurposeUnder the pressure of dynamic business environments, firms in the banking and finance industry are gradually embracing Fintech, such as robo-advisors, as part of their digital transformation process. While robo-advisory services are expected to witness lucrative growth, challenges persist in the current landscape where most consumers are unready to adopt and even resist the new service. The study aims to investigate resistance to robo-advisors through the privacy and justice perspective. The human-like attributes are modeled as the antecedents to perceived justice, followed by the subsequent outcomes of privacy concerns, perceived intrusiveness and resistance.Design/methodology/approachAn online survey was conducted to gather consumer responses about their perceptions of robo-advisors. Two hundred valid questionnaires were collected and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM).FindingsThe results revealed that (1) perceived anthropomorphism and perceived autonomy are the positive determinants of perceived justice, (2) perceived justice negatively impacts privacy concerns and perceived intrusiveness and (3) privacy concerns and perceived intrusiveness positively influence resistance to robo-advisors.Originality/valueThe present study contributes to robo-advisory service research by applying a privacy and justice perspective to explain consumer resistance to robo-advisors, thereby complementing past studies that focused on the technology acceptance paradigm. The study also offers practical implications for mitigating resistance to robo-advisors.

An exploratory review of the fintech influence field

“…They found that robo-analysts do not have human biases such as overoptimism or representativeness, but not all of their recommendations are profitable. An alternative to the technology-recognition paradigm was explored by Aw et al (2023) using surveys to investigate the reasons for customer resistance to roboadvisors. They reported that perceived fairness, intrusiveness and invasion of privacy are the main drivers of consumer resistance to the technology.…”

AI credibility and consumer-AI experiences: a conceptual framework

“…Kim and Kim, 2018). This study follows the latter stream of research to define perceived justice with AI as consumers' subjective judgment about the degree of justice they expect while using an AI-enabled offering (Aw et al, 2023;Seiders and Berry, 1998). Consumers' justice perceptions about AI are formed throughout the pre-, during, and post-consumption stages (Singh and Crisafulli, 2016) through their own experiences or by encountering company's ads or policy pages (Kukar-Kinney et al, 2007), and get refined over time (Wirtz and Lwin, 2009).…”

“…Apart from AI's accountability, consumer perceptions of AI's expertise (a dimension of AI credibility) also affect their delegation experience positively (Lubars and Tan, 2019). AI's customizability (a subdimension of AI credibility) can help maintain consumers' autonomy, thus avoiding making them feel replaced in the delegation experience (Aw et al, 2023;Sajtos et al, 2020).…”

“…Kim and Kim, 2018). This study follows the latter stream of research to define perceived justice with AI as consumers' subjective judgment about the degree of justice they expect while using an AI-enabled offering (Aw et al. , 2023; Seiders and Berry, 1998).…”

Guest editorial: The dark side of FinTech: unintended consequences and ethical consideration of FinTech adoption

“…In the final article, Aw et al (2024) examine the resistance to the adoption of robo-advisors in their study, specifically from the perspectives of justice and privacy. This study complements past research that predominantly focused on the technology acceptance paradigm.…”