Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.


Research Bites: Factors influencing fintech adoption in Nigeria

Article Image
This article is part of a series in collaboration with the African Journal of Science, Technology, Innovation and Development.

The financial industry is facing a dynamic and systemic change in financial technology (fintech) innovation globally, and Africa is not left out. However, very little is known about the perception of end users regarding fintech in Africa.

There is a need for the financial industry to firstly comprehend the level of acceptance of consumers concerning technology adoption of financial services prior to the actual adoption of the technology.

It is equally important to know that any technology or innovation developed, but not properly adopted by the end users, is deemed to fail.

Since Nigeria is ranked as the largest economy in Africa and Lagos State is the commercial hub of Nigeria, there is need to estimate the nature of fintech services adopted by the banking customers and the factors influencing their intention to adopt fintech services.

A survey conducted among 467 end users in Lagos State between the last quarter of 2019 and first quarter of 2020 found that perceived usefulness; perceived ease of use; service trust; and social influence from family and friends have positive and significant impacts on users' attitude towards adopting fintech services in Nigeria.

The results indicate that there is a need for regulatory agency in the financial sector to further improve security and safety around the fintech services to further boost the confidence and trust of the end users.

Family, friends and community are also very significant in influencing the users' attitude and intention to adopt Fintech services. It is important for the general public to be sensitized on the importance of financial technology products and services which could be done by banks through various channels such as television, radio and social media.

Popular use cases

The information from the survey respondents showed the nature of fintech services that customers used in the last three years in the commercial hub of Nigeria.

The result reveals that money transfer payments of various forms constitute the largest proportion of the fintech services being used by the respondents (83.3%), followed by savings and investment (75.4%), insurance (71.9%), financial planning (63%), borrowing (60.6%) and others (43.3%).

This indicates that most of the sampled respondents are aware and make use of fintech services, and these could not be separated from the fact that many Nigerian youths are familiar with financial transactions online.

Industry disruptors

Fintech encompasses a number of innovative services which utilize evolving information technologies like cloud computing, Internet of Things (IoT) and big data to widen financial product and service platforms.

This led to companies outside the conventional banks starting fintech services to compete with banks. These companies use technology for diverse financial solutions such as lending, payments, borrowing and personal financial management among others.

These companies aim to entice customers with products and services that are more efficient, user-friendly, automated and transparent than those currently available in the traditional banking system.

Different types of innovations which currently dominate fintech comprise peer-to-peer lending, mobile payment systems, artificial intelligence and machine learning, digital advisory and trading systems, crypto currencies and the Blockchain and equity crowd funding.

Fintech offers different opportunities to users through improvement in transparency, reduction of costs, eradication of middlemen and easier accessibility to financial information.

Banking battle

The fast innovations in the fintech industry pose challenges for banks as they need to adapt to this new technological wave if they want to remain in business.

In order to remain competitive and continue to have a greater market share in the financial industry, banks have started investing in fintech and at the same time acquiring some fintech companies.

Although a reasonable amount of attention has been devoted to fintech in the financial industry, many people still doubt the continuous use of fintech especially in Africa, as the end users are clouded with skepticisms due to the considerable risks attached to it.

This poses a great challenge to the fintech companies to increase the potential benefits of fintech products as well as limit the potential risks.

Fostering alliance between the regulators, the incumbent banks and the fintech companies is essential to reduce the potential financial risks that could emanate in the industry.

The rate at which new ICT and innovation are diffused and adopted goes beyond the features of the technologies and innovation themselves, but also of equal importance are the features of the users to whom it is directed.

While few countries such as China, Australia, United Kingdom, Korea and Finland among others have adopted fintech at a wider level, the rate of adoption still remains at the preliminary stage in many emerging and developing countries.

Continuous innovative technology has been shaping the financial sector and this creates a prospect for the banks and fintech companies to find better alternatives in satisfying the consumers' needs and convenience.

To read more about this research, you can access the full academic research paper from the African Journal of Science, Technology, Innovation and Development.

*Top image source: GSMA's 2021 State of the Industry Report on Mobile Money.

Yusuf Opeyemi Akinwale and Adam Konto Kyari

Innovation hub


Paymentology looks to strengthen its African roots

Global issuer-processor Paymentology's CEO Jeff Parker spoke to Connecting Africa about the company's African roots and aspirations to work with more banks, fintechs and enterprises both on the continent and globally.


Women & technology: impacts of the digital gender divide

Connecting Africa correspondent Chiti Mbizule investigates the state of Africa's digital gender gap and the impact this divide is having on access, education and entrepreneurship opportunities for local women.

More Innovation hub

Latest video

More videos

Partner perspectives

All Partner Perspectives

Sponsored video

More videos

Industry announcements

More Industry announcements

Upcoming events

Africa Tech Festival 2024
November 11-14, 2024
Cape Town, South Africa
More Upcoming events

Africa Tech Perspectives


Uber's Marjorie Saint-Lot on inclusion and sustainability in Africa

Uber's Country Manager for Ghana and Cote d'Ivoire, Marjorie Saint-Lot, shares how the ride-hailing company is approaching public-private partnerships, environmentally friendly initiatives and gender inclusion in Africa.


The 100 most influential African leaders in 2023

A new report from Africa Tech Festival and Connecting Africa puts a spotlight on the top 100 African leaders in the telecoms and technology sector in 2023.


Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.

More Africa Tech perspectives

Guest Perspectives


Omdia View: February 2024

By Omdia Analysts

Highlights in February 2024 in the Middle East and Africa included 5G launches in Senegal and 5G trials in Egypt as well as Kenya's first 5G MVNO. Airtel also launched a new wholesale connectivity business while MTN and Huawei are planning a joint Innovation Technology Lab in South Africa – that and more in this month's Omdia View.


Omdia View: January 2024

By Omdia Analysts

Highlights in January 2024 in the Middle East and Africa included a $200 million fintech deal between MTN and Mastercard as well as 5G network trials by Telecom Egypt – that and more in this month's Omdia View.

More Guest Perspectives

Like us on Facebook

Newsletter Sign Up

Sign Up
Tag id test-002