The Effect of Fintechs on the Traditional Banking System in Nigeria

Abstract

In the Nigerian financial sector, Fintechs disruptions are well pronounced with the introduction of new innovations that improve financial services in the country. This study assesses the effect of Fintechs on the traditional banking systems in Nigeria. Specifically, the study attempted to understand the correlation between the use of the Nigerian legacy banking services and the adoption of the Lending Fintech services; the use of Payments, Mobile Money & Digital Banking Fintech services; and the adoption of Savings, Investment & Crowdfunding Fintech services. The research was carried out as a quantitative survey, using questionnaires and surveys distributed via Google Forms to Nigerians who use social media, who were chosen using a random sampling approach. From the population, the study retrieved the sample data from 217 Nigerians. The primary data was analysed using R language software, and Multivariate Regression and Pearson Correlation Analyses were used to achieve the objectives of the study. The results suggest that, in the context of the financial industry in Nigeria, the use of the traditional bank services has a significant and negative relationship with the adoption of the Lending Fintech services, the use of Payments, Mobile Money & Digital Banking Fintech services, and the adoption of Savings, Investment & Crowdfunding Fintech services. The study suggests that traditional banks should collaborate with Fintech companies to ensure their proper service delivery in the financial industry and to also provide adequate financial services to Nigerians.