Effect of Technological Innovation on the Growth of Fintech and Financial Institution in Nigeria

ABSTRACT

New innovations in financial technology “fintech” are allowing Financial Institutions to serve customers in novel and unexpected way. The financial industry is experimenting with automation, predictive analytics, new delivery platforms, digital banking, block chain and more. These changes are helping the institutions provide higher quality services at lower price levels.
Financial technology “fintech” is an innovation in the use of technology in the distribution and creating assess to financial services that aims to increase the effectiveness of both users and banks. This steady growth determines the undeniable value of technologies that stimulate the effect of technology on fintech and financial institutions. This study aims to determine the effect of technological innovations on the growth of fintechs and financial institutions in Nigeria. Fintech and financial institutions, which is assessed in terms of profitability and adoption of various technological innovations including customer independent technology, customer assisted technology and customer transparent technology. The study, which was a census, employed a descriptive cross-sectional design and targeted all the fintech and commercial banks in Nigeria. Secondary data in form of annual financial reports was obtained from Central Bank of Nigeria. In addition, primary data was gathered from personnel from the customer care departments using a structured questionnaire. Data were analyzed using statistics and involved computation of frequencies, descriptive statistics and multiple regression analysis.

Most of the respondents affirmed the positive impacts of technological innovations including ease of access, convenience, user friendliness among others. The study showed that customer care employees at the banks and Fintechs valued technological innovations. The study concluded that the adoption of technological innovation has enhanced Fintech by making it more productive and effective and has a strong positive relationship on Nigeria banking industry by making workers performance more effective and efficient; the adoption of technological innovation has enhanced the fortune of the fintechs and Nigeria commercial banks. The study recommended that fintechs and banks and must be focused in terms of their needs and using the right technology to achieve goals, rather, than acquiring technology because other fintech and banks have it. Regulatory authority like Central Bank of Nigeria must stipulate standards for fintechs and the banks to follow to avoid making fintech industry and the Nigeria banking sector a dumping ground for the outdated technological infrastructures.
Keywords: Technological innovations, Financial Technology (Fintech), Financial Institutions, Profitability.