Disruptive Innovation: A Study of Fintechs' Disruption of Traditional Banking in Nigeria

Abstract

This study aimed to investigate the disruption of traditional banking by fintechs and their effects and influences in Nigeria. It examined various forms and dimensions of fintechs’ disruptive innovation activities and their specific effects on traditional banking. A descriptive survey research design was employed in this study. The sample of the study was drawn from three stakeholder groups consisting of industry professionals across banking, financial, fintechs and other non-banking/finance professionals; agency banking and PoS operators; and customers and end-users of banking and fintech products and services. The study relied mainly on primary data obtained through a structured questionnaire administered and received from 371 respondents. The data collected was analysed and presented using descriptive methods. The statistical techniques employed are the Analysis of Variance (ANOVA) and the regression analysis models. The hypotheses were tested using the one sample t-test and the regression coefficients. The findings showed statistical evidence that fintechs' technological innovations cause significant disruption to traditional banking in Nigeria. It also showed that the effects and influences of fintechs’ disruption of traditional banking are significant. The study concludes that fintechs have become a significant force that is changing Nigeria's traditional banking and financial system. Thus, banks should collaborate with fintechs to leverage their technological capabilities while maintaining their conventional risk management strenghts. Particularly, banks should further integrate fintechs’ innovations into their existing banking systems to improve service delivery.