Are millennials embracing robot bankers because they love robots… or because they hate bankers?

Scandinavian millennials have embraced robot bankers over their human peers amid the Covid-19 crisis, according to regional banks Nordea and Danske. But is this a sign of robotic success or human failure?

Nordea's robotic banker named Nora brought in an impressive 40 percent more business in the last quarter than in the same period last year. The bot also outstripped its human competitors at the same bank, who were relegated to helping established clients scramble to manage their tanking portfolios amid the Covid-19 financial crisis.

Nora did more than just protect the bank from the downturn – millennials flocked to her over human financial advisers. These mostly first-time investors even went on "opportunistic buying sprees," Tanja Eronen, co-head of investment products at Nordea's Helsinki wealth division, told Bloomberg on Sunday, calling the phenomenon "an interesting development."

It was only the 60+ age group who wanted a human adviser to "hold their hand through the panic," helping them frantically sell off their holdings as their value cratered.

And it wasn’t only Nordea that saw a sudden spike in silicon favoritism. Danish bank Danske's investment robot, named June, has helped the institution weather the coronavirus crisis with a shining 42 percent increase in new customers, according to Jacob Hvidberg Falkencrone, a senior wealth management analyst who also serves as the robot's PR man.

Tanja Eronen is emphatic that the age of the robots is upon us, thanks to the coronavirus "help[ing] us win over clients to digital services. Maybe they've been reluctant to use them before, and now that they have to, they learn how it's done and it lowers the threshold for the future." Eronen suggested she doesn't want to give customers a chance to change their minds, adding: "We are constantly looking to automate functions where humans bring no added value."

But what about where humans actually take away value?

Millennials may be investing with robots not because they especially trust the bots (no matter how adorable and friendly they look), or even because the Covid-19 crisis made bankers less accessible – Nordea mainstay Sweden, for one, didn't undergo the lockdown seen in other countries – but because they come without the overheads and psychological baggage associated with human bankers.

Nora's rollout came with access to low-cost investment funds, a fact that probably served as a more powerful draw for millennials than the novelty of investing with a robot banker. Robots don't have to be paid a commission, and any fund that lets the investor keep more of their money is going to appeal to first-time market participants that don't have an existing relationship with an advisor they trust.

Indeed, increasing antipathy toward human bankers – especially among millennials who entered the workplace during the fallout from the 2008 financial crisis and may now be seeing any gains they've made since then wiped out by the coronavirus crisis – could play a role in driving them into the arms of robots. It's easier to see a computer program as incorruptible, even if the bots still work for a financial institution on the receiving end of government bailouts.

Millennials presumably trust robots not to open millions of fake accounts in the names of actual customers, as human bankers working for US bank Wells Fargo did in a decade-long spree of institutional fraud that became public in 2016 and finally led to a $3 billion settlement earlier this year.

They also likely believe robots won't engage in what's ironically known as "robo-signing," the illegal practice of authorizing home foreclosures without verifying the legitimacy of the underlying loans that reached its catastrophic peak during the 2008 crisis. They've been taught to trust robots (and their artificial intelligence cousins) to be fair and impartial, a step above the venal humans populating the financial industry.

Hopefully, they won't have to wait until the next financial crisis to find out if their trust has been misplaced.

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