Adoption and Application of Financial Technology: Insight into Determinants, Benefits and Challenges in Africa

FinTech has received significant attention in recent years due to its innovative potential to widen access to financial services and products and address socioeconomic ills. Reviews of past and present literature, however, reveal limited studies focusing on the emerging trend and factors of FinTech adoption, an incomplete understanding of its applications, and challenges in the context of Africa, which is known to be the continent with the highest percentage of poor and financially excluded populations. This study therefore aims to address the following research questions: (1) What is the emerging trend of FinTech adoption in financial institutions in Africa? (2) What are the major determinants of fintech adoption from the users’ perspective? (3) What are the benefits and challenges associated with financial technology? Findings reveal that despite the unprecedented investment and development of FinTech in Africa in the last decade, its adoption is still in the early stages, with a rate below 25% compared to about 80% in developed economies, in spite of its potential benefits to financial inclusion, education, gender inclusion, public health, and agriculture. Findings also reveal key factors such as perceived value and usefulness, level of trust and security risk, user friendliness of FinTech, economic benefit, social influence, self-efficacy, and perceived employment as factors that affect Fintech adoption. The industry, however, faces challenges such as inadequate infrastructure, a financial regulatory framework, management issues, high market entry barriers, and incumbent competition. Based on the findings, it was recommended that improving technological infrastructure, promoting technology education and training, improved internet connectivity, collaboration of incumbents with FinTech, and enabling government policy and regulatory environment will help address Fintech challenges, stimulate growth, and encourage high adoption in Africa.