Customer Insight to Digitalisation and Open-Banking in Nigeria

Abstract

The business world is experiencing rapid technological integrations. Several innovations have contributed to the success of businesses as the customer continues to play a strategic role in innovation’s acceptance or rejection. Open banking is a disruptive innovation that represents a departure from the traditions in emerging markets where financial inclusion has been focused on the consumer. It is rapidly being adopted in developed economies with developing economies such as Nigeria and India making incursions in adopting the innovation. Its ability to impact the business environment and improve access to financial services depends on customers’ consented data thereby making customers significant to its success. The challenge is on rising data privacy violation and data leakage. The purpose of the study is to examine the determinants of the success of open banking in Nigeria from customers’ perspective. The study is a novel study in Nigeria following the focus of extant studies on application and challenges of the innovation. Cross-sectional survey, case study analysis and close-ended questionnaire were adopted in the study while structural equation modeling was employed in analysing the data. The findings revealed that customers consent to open banking is positively influenced by the direct effects of compatibility and customers’ perception of security and trust. Also, the success of the innovation is impacted by the negative link between perceived access, perceived risk and customers consent to open banking. The significant result of the indirect relationships also justifies the importance of these variables in ensuring the success of open banking in Nigeria. With this, emphasis is on strategic management and policy drives that ensure effectiveness and protection of customers.