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Factors that Influence FinTech Adoption in South Africa: A Study of Consumer Behaviour towards Branchless Mobile Banking

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  • Barbara Jeanne Slazus
  • Geoffrey Bick

Abstract

The widespread use of mobile phones and growth in internet penetration has created a unique opportunity to increase access to financial services. Financial Technology (FinTech) companies and mobile banking (m-banking) empower customers to use digital platforms to utilise financial services without the physical access requirements of traditional banking. This has led to the rise of FinTech firms that are disrupting traditional industry standards by servicing consumers through a range of digital channels and mobile devices. A new completely branchless bank, Bank Zero, is set to launch in South Africa in 2020 to exploit these opportunities. This consumer behavioural study focuses on analysing FinTech adoption in the South African market. An adapted mixedmethod approach was used to identify the enabling and inhibiting factors that motivate consumers to adopt or reject m-banking. Qualitative research was initially conducted via in-depth interviews with 7 respondents. The most salient factors identified in the literature review were tested, and the results were used to develop a quantitative, online questionnaire. A convenience sample of 217 valid responses was collected, and the data was analysed using exploratory factor analysis (EFA). The EFA identified 6 influencing factors: four enabling and two inhibiting factors. The enabling factors that positively influenced FinTech adoption were: Utility, Socio-Economic Influencers, Mobile Device Trust and Youth. The two inhibiting factors were: Perceived Risks and Associated Costs. Interestingly, 74% of the 217 respondents indicated that they would join a completely branchless bank, using only their mobile phones and the internet to access banking services, showing a high propensity to branchless, m-banking. Finally, the Enhancement Criteria Model based on insights gained from the research findings, is proposed. This model provides recommendation criteria for existing and new FinTech providers who are looking to improve their business models.

Suggested Citation

  • Barbara Jeanne Slazus & Geoffrey Bick, 2022. "Factors that Influence FinTech Adoption in South Africa: A Study of Consumer Behaviour towards Branchless Mobile Banking," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 8(1), pages 43-64, January.
    • Handle: RePEc:ate:journl:ajbev8i1-3
    DOI: 10.30958/ajbe.8-1-3
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    References listed on IDEAS

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    1. Ismail, Tashmia & Masinge, Khumbula, 2011. "Mobile banking: Innovation for the poor," MERIT Working Papers 2011-074, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Gulamhuseinwala, Imran & Bull, Thomas & Lewis, Steven, 2015. "FinTech is gaining traction and young, high-income users are the early adopters," Journal of Financial Perspectives, EY Global FS Institute, vol. 3(3), pages 16-23.
    3. Lee Cronbach, 1951. "Coefficient alpha and the internal structure of tests," Psychometrika, Springer;The Psychometric Society, vol. 16(3), pages 297-334, September.
    4. John P Wentzel & Krishna Sundar Diatha & VSS Yadavalli, 2013. "An application of the extended Technology Acceptance Model in understanding technology-enabled financial service adoption in South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 30(4-5), pages 659-673, December.
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