Project – The Impact of Fintech Adoption on Traditional Banking Services in Lagos State. A study of Access Bank mobile banking platforms

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The global financial services industry has experienced significant transformation over the past two decades due to rapid advances in information and communication technology. One of the most prominent developments is the emergence of financial technology (Fintech), which refers to the use of digital technologies to deliver financial services in more efficient, innovative, and customer-centric ways (Arner, Barberis, & Buckley, 2016). Fintech innovations such as mobile banking, digital payments, online lending, and blockchain technologies have reshaped how financial services are produced, delivered, and consumed.

In both developed and developing economies, Fintech adoption has altered traditional banking operations by enhancing service delivery, expanding financial inclusion, and reducing transaction costs. Mobile banking platforms, in particular, allow customers to perform transactions such as fund transfers, bill payments, balance inquiries, and account management without visiting physical bank branches. As a result, banks are increasingly integrating Fintech solutions into their service models to remain competitive in an evolving financial landscape (Gomber, Kauffman, Parker, & Weber, 2018).

In Nigeria, the adoption of Fintech has accelerated rapidly, driven by increased smartphone penetration, improved internet access, supportive regulatory reforms, and a growing population of digitally savvy consumers. The Central Bank of Nigeria (CBN) has promoted cashless policies and electronic payment systems to improve efficiency and transparency in the banking sector (CBN, 2020). Lagos State, as Nigeria’s commercial and financial hub, has been at the forefront of Fintech innovation, hosting a large number of Fintech startups and digitally enabled banks.

Traditional commercial banks in Lagos State have responded to Fintech disruption by developing and expanding mobile banking platforms. Access Bank Plc, one of Nigeria’s leading commercial banks, has invested heavily in digital banking infrastructure, offering mobile applications such as AccessMore and USSD services to enhance customer experience and operational efficiency. These platforms provide customers with convenient, fast, and secure access to banking services, reducing dependence on physical branches and manual processes.

The adoption of mobile banking platforms has had notable implications for traditional banking services, including customer service delivery, branch operations, transaction volumes, and staff roles. While Fintech adoption has improved service efficiency and customer satisfaction, it has also raised concerns about reduced physical bank patronage, cybersecurity risks, digital exclusion, and changes in employment patterns within the banking sector (Ozili, 2018).

Understanding the impact of Fintech adoption on traditional banking services is particularly important in Lagos State, where customer expectations for speed, convenience, and innovation are high. Despite the growing use of mobile banking platforms, there is limited empirical evidence examining how Fintech adoption by traditional banks such as Access Bank affects conventional banking services, including branch usage, service quality, and customer–bank relationships. This study therefore seeks to examine the impact of Fintech adoption on traditional banking services in Lagos State, using Access Bank mobile banking platforms as a case study.

1.2 Statement of the Problem

The rapid growth of Fintech has created both opportunities and challenges for traditional banking institutions in Nigeria. While mobile banking platforms have enhanced convenience and expanded access to financial services, they have also disrupted conventional banking models that rely heavily on physical branches and face-to-face interactions. In Lagos State, where digital banking adoption is high, traditional banks face increasing pressure to balance digital innovation with the maintenance of effective traditional banking services.

Despite heavy investments in mobile banking platforms by banks such as Access Bank, concerns remain regarding the impact of Fintech adoption on traditional banking operations. Reduced customer visits to bank branches, declining use of over-the-counter services, and changes in customer expectations have altered the nature of service delivery. Some customers, particularly older adults and individuals with limited digital literacy, may struggle to adapt to mobile banking platforms, leading to potential exclusion from essential banking services.

Additionally, operational challenges such as network failures, cybersecurity threats, transaction errors, and system downtimes have raised questions about the reliability and security of mobile banking platforms. These issues may affect customer trust and satisfaction, thereby influencing perceptions of traditional banking services. Bank staff roles and responsibilities have also evolved, with increased emphasis on digital support rather than conventional service delivery, potentially affecting service quality and employment structures.

Although existing studies have explored Fintech development in Nigeria, there is a lack of empirical research focusing specifically on how Fintech adoption by traditional banks influences the delivery and relevance of conventional banking services at the state level. In particular, limited attention has been given to Lagos State and to Access Bank’s mobile banking platforms as a case study.

The absence of detailed empirical evidence makes it difficult for bank management, regulators, and policymakers to assess the extent to which Fintech adoption enhances or undermines traditional banking services. Without such evidence, strategies aimed at achieving an optimal balance between digital innovation and traditional service delivery may be ineffective. Therefore, the problem addressed by this study is the limited empirical understanding of the impact of Fintech adoption on traditional banking services in Lagos State, with specific reference to Access Bank mobile banking platforms.

1.3 Purpose of the Study

The main purpose of this study is to examine the impact of Fintech adoption on traditional banking services in Lagos State, using Access Bank mobile banking platforms as a case study.

1.4 Research Questions

1. What Fintech services are provided through Access Bank mobile banking platforms in Lagos State?

2. How has the adoption of mobile banking platforms affected traditional banking services such as branch usage and customer service delivery?

3. What challenges are associated with the use of Access Bank mobile banking platforms?

1.5 Research Hypothesis

H₀: Fintech adoption has no significant impact on traditional banking services in Lagos State.

1.6 Significance of the Study

The findings of this study will be beneficial to bank management, policymakers, regulators, and customers. It will provide insights into how Fintech adoption affects traditional banking services, inform strategic decision-making within commercial banks, and support the formulation of policies that promote inclusive and sustainable digital banking in Nigeria.

1.7 Scope of the Study

The study focuses on Access Bank customers and branches within Lagos State. It examines the impact of mobile banking platforms on traditional banking services such as customer service delivery, branch usage, and transaction processes. The study does not cover other banks or Fintech firms outside Access Bank.

1.8 Operational Definition of Terms

• Fintech: The use of digital technology to provide financial services in innovative and efficient ways.

• Mobile Banking Platforms: Digital applications and USSD services that enable customers to access banking services via mobile devices.

• Traditional Banking Services: Conventional banking activities provided through physical branches and face-to-face interactions.

• Access Bank: A leading commercial bank in Nigeria offering digital and traditional banking services.

Project – The Impact of Fintech Adoption on Traditional Banking Services in Lagos State. A study of Access Bank mobile banking platforms