Determinants Shaping Choices for Robo and Human Advisors in German Financial Market: A Theoretical Review

Abstract

The financial industry has experienced a radical change brought about by the development of robo-advisors, a technology that combines financial technology (fintech) and artificial intelligence (AI). With the ongoing growth of digitalisation, AI-based advisory services are transforming the ways in which people engage in financial services to provide new inclusion and access possibilities. These platforms help people, especially those who are not financially smart enough to take advantage of investment options previously available only through the traditional advisory channels. The current theoretical analysis is a critical explanation of the introduction of robo-advisors in German financial marketplace, which is marked by high regulation, cultural conservatism, and a high degree of trust in human advisors. Based on Schumpeter’s Innovation Theory, the models adopted in terms of technology include the Technology Acceptance Model (TAM), the Technology Adoption Life Cycle (TALC), and the Theory of Reasoned Action (TRA), all of which discuss the behavioural and structural levels of adoption. Although these frameworks provide useful insights into the process of innovation diffusion and user acceptance, they do not tend to consider key cultural and ethical aspects of the innovation process, such as privacy, trust, and institutional credibility. Through a synthesis of these models, the current review reveals a comprehensive picture of the interplay of technological advancement, behavioral intention, and cultural context in the decision-making process of technology adoption. It underlines the need for responsible and culturally sensitive innovation in the German fintech market and suggests its practical implications for policymakers, financial institutions, and tech developers who want to drive responsible and sustainable digitalisation.