The FinTech Evolution and Its Effect on Traditional Banking in Africa—A Case of Zambia

Abstract

The popularization of FinTechs has sparked new competition for banks as FinTechs are said to be more convenient, efficient and faster unlike bureaucratic requirements of financial institutions such as banks. The aim of this study was to assess the factors leading to adoption of FinTech financial services and how this affects traditional banking in Zambia. The objectives of the study were to evaluate factors influencing the adoption of FinTech financial services and to develop strategies that can help banks to remain relevant and competitive. The study adopted a quantitative research approach to collect data through self-administered questionnaires. The sample size was arrived at using the Cochran formula. The respondents were selected based on a convenient sampling technique which is a non-probability sampling method. The study adopted the diffusion of innovation theory whose variables were used to come up with hypotheses. The data collected through the questionnaires was analyzed using Pearson Correlation and the SPSS software. Results indicated a strong positive correlation of 0.450 between relative advantage and adoption. Further, the study shows that there is a strong positive correlation of 0.621 between Compatibility and Adoption. The study proposes a revised model that shows factors affecting adoption of an innovation that might help banks.