Table of Contents
ABSTRACT.. 2
CHAPTER ONE.. 5
INTRODUCTION.. 5
1.1 Background to the Study.. 5
1.2 Statement of the Problem... 6
1.3 Objectives of the Study.. 8
1.4 Research Questions. 8
1.5 Research Hypothesis. 9
1.6 Significance of the Study.. 9
1.7 Scope of the Study.. 10
1.8 Limitations of the Study.. 10
1.9 Organization of the Study.. 10
CHAPTER TWO.. 13
REVIEW OF RELATED LITERATURE.. 13
2.1 Introduction.. 13
2.2 Theoretical Review.. 13
2.3 Conceptual Review.. 15
2.4 Empirical Review.. 18
2.5 Summary of Literature Review.. 20
Chapter Three.. 22
Research Methodology.. 22
3.1 Research Design.. 22
3.2 Area of the Study.. 22
3.3 Population of the Study.. 22
3.4 Sampling Techniques and Sample Size.. 23
3.5 Data Collection Methods. 23
3.6 Data Analysis Procedures. 24
3.7 Ethical Considerations. 24
CHAPTER FOUR.. 25
DATA ANALYSIS AND INTERPRETATION.. 25
4.1 Preamble.. 25
4.2 Socio-Demographic Characteristics of Respondents. 26
TABLES BASED ON RESEARCH QUESTIONS.. 29
4.3 Analysis of the Respondents’ Views on Research Question one:. 29
4.4 Testing Hypothesis. 42
4.5 Discussion of Findings. 43
CHAPTER FIVE.. 46
SUMMARY CONCLUSION AND RECOMMENDATION.. 46
5.1 Summary of Findings. 46
5.2 Conclusion.. 46
5.3 Recommendations. 47
REFERENCES.. 48
APPENDIX.. 51
Research Questionnaire: Influence of Fintech Providers on the Banking Sector of Nigeria (A Case Study of Opay). 51
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
In recent years, Nigeria's banking sector has undergone a profound transformation fueled by the emergence and rapid growth of Financial Technology (FINTECH) providers. These innovative entities have revolutionized traditional banking practices, challenging established norms and reshaping the financial landscape of the country. The influence of FINTECH providers on Nigeria's banking sector is multifaceted, encompassing aspects such as customer experience, accessibility, efficiency, and regulatory dynamics. As of January 2024, their impact continues to evolve, presenting both opportunities and challenges for stakeholders within the industry.
One significant way in which FINTECH providers have influenced the Nigerian banking sector is through enhanced financial inclusion. By leveraging technology, these entities have expanded access to financial services, particularly among underserved and remote populations. This has contributed to bridging the gap between the banked and unbanked segments of society (Ndukwe, 2022). Moreover, FINTECH innovations have introduced alternative payment methods and digital banking solutions, fostering greater convenience and flexibility for consumers (Adesina et al., 2023).
Furthermore, the competitive landscape of Nigeria's banking sector has been significantly altered by the presence of FINTECH providers. Traditional banks are facing increasing pressure to innovate and adapt to changing consumer preferences in order to remain relevant (Obisesan & Owolabi, 2023). Consequently, partnerships and collaborations between banks and FINTECH firms have become more prevalent, as incumbents seek to leverage the technological expertise and agility of these disruptors to drive their own digital transformation initiatives (Adeyemi & Arogundade, 2023).
However, alongside the opportunities presented by FINTECH providers, there are also notable challenges and regulatory considerations that must be addressed. Concerns regarding data privacy, cybersecurity, and regulatory compliance have gained prominence in light of the rapid proliferation of digital financial services (Olufemi & Ajayi, 2023). As such, policymakers and regulators are tasked with striking a delicate balance between fostering innovation and safeguarding the integrity and stability of the financial system (Ogunsola & Akanbi, 2023). In summary, the influence of FINTECH providers on Nigeria's banking sector is profound and far-reaching, shaping the future trajectory of the industry in significant ways.
1.2 Statement of the Problem
The rapid growth and increasing influence of Financial Technology (FINTECH) providers on Nigeria's banking sector present a complex array of challenges and opportunities. One pressing issue is the potential disruption of traditional banking practices and business models by these innovative entities. As of April 2024, the expansion of digital banking services and alternative payment methods introduced by FINTECH firms has raised concerns among incumbent banks regarding their market share and profitability (Adebayo & Afolabi, 2023). Moreover, the evolving competitive landscape may exacerbate existing challenges related to financial inclusion and access to banking services, particularly in underserved rural areas where traditional banking infrastructure is limited (Olaniyan & Ogunleye, 2022).
Furthermore, the rise of FINTECH providers in Nigeria's banking sector has brought to the fore a range of regulatory and compliance issues. As these entities leverage advanced technologies such as blockchain and artificial intelligence to deliver innovative financial solutions, regulators are tasked with ensuring the integrity, security, and stability of the financial system (Oluwatobi & Ogunrinde, 2023). The absence of comprehensive regulatory frameworks tailored to the unique characteristics of digital finance poses a significant challenge, as regulators strive to strike a balance between promoting innovation and safeguarding consumer interests (Ogundipe & Adewale, 2023). Consequently, there is a critical need to examine the regulatory environment governing FINTECH activities and identify potential gaps or shortcomings that may hinder the sustainable growth of the industry.
1.3 Objectives of the Study
The main objective of the study is to examine Influence of FINTECH Providers on the Banking Sector of Nigeria. Specific objectives of the study are:
- 1. To assess the impact of Fintech on Financial Inclusion in Nigeria
- 2. To analyze the impact of Fintech on the Efficiency and Profitability of Nigerian Banks
- To explore Collaboration and Competition between Fintechs and Traditional Banks in Nigeria
1.4 Research Questions
To guide the study and achieve the objectives of the study, the following research questions were formulated:
- How has the adoption of Fintech solutions by Nigerian banks influenced the number of people with access to basic financial services compared to the pre-Fintech era?
- How have Fintech-enabled services impacted the operational costs of Nigerian banks compared to traditional branch-based banking?
- Are there instances of collaboration between Fintechs and Nigerian banks to offer new financial products or services? If so, what are the benefits of such collaboration for both parties?
1.5 Research Hypothesis
The following research hypothesis was developed and tested for the study:
Ho: There is no statistical significant relationship between FINTECH Providers and Banking Sector of Nigeria.
1.6 Significance of the Study
The study is important for many reasons. The following are the major stakeholders this paper through its practical and theoretical implications and findings will be of great significance:
Firstly, the paper will benefit major stakeholders and policy makers in the Information Technology sector. The various analysis, findings and discussions outlined in this paper will serve as a guide in enabling major positive changes in the industry and sub-sectors.
Secondly, the paper is also beneficial to the organizations used for the research. Since first hand data was gotten and analysed from the organization, they stand a chance to benefit directly from the findings of the study in respect to their various organizations. These findings will fast track growth and enable productivity in the organisations used as a case study.
Finally, the paper will serve as a guide to other researchers willing to research further into the subject matter. Through the conclusions, limitations and gaps identified in the subject matter, other student and independent researchers can have a well laid foundation to conduct further studies.
1.7 Scope of the Study
The study is delimited to Opay. Findings and recommendations from the study reflects the views and opinions of respondents sampled in the area. It may not reflect the entire picture in the population.
1.8 Limitations of the Study
The major limitations of the research study are time, financial constraints and delays from respondents. The researcher had difficulties combining lectures with field work. Financial constraints in form of getting adequate funds and sponsors to print questionnaires, hold Focus group discussions and logistics was recorded. Finally, respondents were a bit reluctant in filling questionnaires and submitting them on time. This delayed the project work a bit.
1.9 Organization of the Study
The study is made up of five (5) Chapters. Chapter one of the study gives a general introduction to the subject matter, background to the problem as well as a detailed problem statement of the research. This chapter also sets the objectives of the paper in motion detailing out the significance and scope of the paper.
Chapter Two of the paper entails the review of related literature with regards to corporate governance and integrated reporting. This chapter outlines the conceptual reviews, theoretical reviews and empirical reviews of the study.
Chapter Three centers on the methodologies applied in the study. A more detailed explanation of the research design, population of the study, sample size and technique, data collection method and analysis is discussed in this chapter.
Chapter Four highlights data analysis and interpretation giving the readers a thorough room for the discussion of the practical and theoretical implications of data analyzed in the study.
Chapter Five outlines the findings, conclusions and recommendations of the study. Based on objectives set out, the researcher concludes the paper by answering all research questions set out in the study.
