Influence of Fintech Companies on the Performance of Retail Banking Services Among Money Deposit Banks in Nigeria

Financial Technologies, popularly known as FinTechs, have become a disruptive force in many areas of finance, especially in the banking industry. They have crept up on banks, becoming a vibrant competition that many did not see coming decades ago. In responding to the threat of FinTechs, some Deposit Money banks have opted to collaborate rather than compete. As a result, traditional banking in Nigeria has evolved into a highly competitive, technology-driven marketplace where some banks are miles ahead, and others are hanging on for survival. This research work explores how banks have fared adopting Financial Technologies. By default, it also investigates the fate of those who have either chosen not to collaborate, or who are unable to collaborate because of structural, innovative and/or financial deficiencies.  This work uses empirical data in its analyses, with staff of GTBank in Abuja forming the sample population for its investigations. The thrust of this work was discussed serially with professional colleagues, whose opinions helped to shape its direction and scope. However, findings are based on the principles of research. Though not its main focus, this work also draws into focus the importance of FinTechs to the larger Nigerian economy. FinTechs ushered in an era digital transmission of financial value from person to person within and beyond the Nigerian economy. Prior to the emergence of FinTechs and the consequent regulatory environment created for their operation by the Central Bank of Nigeria (CBN), the country had issued six different denominations of the Naira in fourteen years – between 1991 and 2005. Nigeria’s population was 97.7 million and 138.9 million respectively in these two landmark years. With Nigeria’s population now beyond 200 million, the cost of printing enough cash money for use by individuals and businesses has been mitigated by the emergence of FinTechs who aid financial intermediation without any physical movement of cash (PWC 2017). A vast field of study, FinTechs and Banking can lead to an endless work of research. This work is therefore restricted to answering questions around the extent of FinTechs’ incursion into the payments space in the Nigerian economy, the extent of FinTechs on the operational efficiency of Deposit Money banks, the impact of FinTechs in making lending easier, and the influence of FinTechs in the quality of banking services available to bank customers nationwide. In the end, this work will draw contrasts between banks collaborating with FinTechs and those ignoring their existence. It will also make recommendations for readers, and suggestions for further research.