DIGITAL DISRUPTION IN FINANCE: THE RISE OF FINTECH AND ITS IMPLICATIONS

Abstract

This study investigated the impact of digital disruption (innovation in financial services) on customer satisfaction among users of financial technology (Fintech) related services. Primary data was collected from users of Fintech, with a focus on the Nigerian Fintech space. A quantitative mini-survey method was employed using an online data gathering tool, and the data was analyzed employing descriptive statistics and percentages. It was found that the most-used Fintech provider in Nigeria is Opay. More than half of the respondents claim to use FinTech services every day, suggesting that the channel serves the users well. On ease of use and quality of service, all respondents claimed Fintechs were either average or above average when rated. Four-fifths of the respondents found how Fintechs handle complaints to be satisfactory, while 20% think it is below average. 93% of respondents found the security architecture of FinTech platforms to be standard, while 96% found them reliable in discharging their services. 100% of the respondents are convinced they will recommend their Fintech service providers to others, including family and friends. 66.7% admitted the use of Fintech platforms limited their use of traditional intermediaries like banks, and the top reasons are high transaction costs, poor customer service, no clear interest on savings, and no access to credit, among others. Traditional financial intermediaries like banks should embrace the fast-paced, technology-driven and changing world of finance if they intend to keep up with the emerging innovations. In order to favorably co-exist with Fintechs, traditional intermediaries must consider new ways to reach the underserved, and unbanked and devise means to lower transaction costs. Fintechs need to improve on their security architecture to protect customer data and scarce funds; and must continue to value customer feedback even when they expand. KEYWORD(S): Fintech(financial technology), digital disruption, financial intermediaries, financial inclusion, transaction costs, customer satisfaction