Effect of Financial Technology (Fin Tech) on Financial System Development in Nigeria: 2005 – 2018

Abstract

This study investigated the effect of financial technology (fintech) on the financial system development in Nigeria. The specific objectives are to examine the effect of mobile phone transactions on the financial system development in Nigeria, Point of sales transactions and online transactions on financial system development in Nigerian. The study adopted Ex-post facto research design as it is used to project future outcomes with past events. The dependent variable is financial system contribution to GDP (FSCGDP) while the independent variables are mobile phone transactions (MPT), point of sales transactions (POS) and online transaction (ONLT). Data analysis was done using the Vector Error Correction and system Equation Estimation Technique. The study found that there is a positive and significant impact of ATM transactions, POS and Online transactions on financial system development in Nigeria; also, a long run relationship was found to exist among the variables used. The study therefore, recommends that; There is need for Government to ensure that the relevant agencies make significant efforts toward ending frauds committed through online transactions since it impacts financial sector development positively, financial service industry especially banks should try and sensitized their customers about the use of mobile phone to carry out their financial transactions. From the analysis conducted it was observed that many have little or no knowledge of the tool, emphasis should also be made on the use of POS since it is one of the easiest ways of carrying out financial transactions without carrying cash around, bank customers should also be encouraged to use the ATM machines for most of their transactions, as it will boost the financial system development as shown in the analysis conducted.