THE ROLE OF FINANCIAL TECHNOLOGY (FINTECH) IN ENHANCING CUSTOMER SATISFACTION IN NIGERIA: A CASE STUDY OF OPAY

CHAPTER ONE INTRODUCTION 1.1 Background to the Study Globally, technological advancements have increasingly shaped all aspects of human activity—ranging from social engagement to education, commerce, and financial operations. The widespread availability of mobile devices and innovative technologies has made these interactions more affordable and accessible. According to the Financial Stability Board, financial technology—or FinTech—refers to technological innovation that enhances financial systems and may significantly influence business models, applications, processes, or products in financial markets and institutions. FinTech has transformed the landscape of how consumers and institutions access financial services (Chong et al., 2019). Innovations such as online and electronic banking have enabled banks to deliver faster and more efficient services to clients, thereby making digital banking systems a global standard (Mittal, 2019). FinTech is a progressive industry aimed at enhancing the effectiveness and efficiency of financial service delivery. It introduces novel, disruptive approaches that challenge traditional methods of banking and financial management (Saksonova, 2017). The financial services sector encompasses offerings from banks, credit unions, insurance firms, accountancy companies, and real estate agencies, serving both individuals and corporate clients (Philippon, 2019). Recognized as a backbone of economic efficiency worldwide, this sector is particularly vital in developing countries like Nigeria, where the economy heavily depends on a robust savings-investment cycle. Pandey (2018) and Olowe (2019) emphasize that the core function of financial services is to ensure smooth capital flow from surplus to deficit units. This is facilitated by financial intermediaries—such as banks and finance houses—that play a pivotal role in maintaining liquidity and economic balance. At present, traditional banks and FinTech firms are competing for market share in both advanced and emerging economies (Omankhanlen et al., 2020). Over the last few decades, Nigeria’s financial services landscape has undergone a remarkable transformation, primarily driven by technological innovation. FinTech companies have introduced highly adaptive products and services, integrating digital technologies into every stage of the customer journey (Okoh, 2020). The evolution of these services has been propelled by key drivers, including investment, savings, human capital, and technological infrastructure (Saksonova & Kuzmina-Merlino, 2017). According to Kyari et al. (2021), FinTech providers have embraced modern tools like peer-to-peer payment systems, mobile banking, digital wallets, and blockchain technology. Agbelusi (2018) concurs, citing cybersecurity, big data, and distributed ledger applications as central elements in FinTech service delivery. As Bunea et al. (2017) note, FinTech firms now offer services traditionally provided by banks, such as investment management, asset oversight, and payment facilitation. Kyari and Akinwale (2020), referencing Cornad (2000), explain that FinTech entities administer financial operations using models like crowdfunding and peer-to-peer lending. In the crowdfunding model, funds are raised directly from individuals or corporations without the intermediary role of consultants, reducing marketing costs. Crowd lending similarly connects borrowers directly with investors via FinTech platforms. To function effectively, FinTech enterprises must have a deep understanding of financial systems. This expertise allows them to innovate and deliver financial products more efficiently using digital tools. Blakstad and Allen (2018) observe that FinTech firms are increasingly providing digital payment solutions both within and beyond conventional banking structures. Kyari et al. (2021) further assert that FinTech is now a direct competitor to traditional banks by progressively replicating a full suite of banking services. Nigeria presents a fertile ground for FinTech expansion, owing to its large population and increasing internet penetration. Traditional banking in the country has faced structural limitations—including high operational costs and infrastructure gaps—especially in serving unbanked and underbanked populations (Chinedu, 2019). FinTech firms like Opay have responded to these challenges by delivering more inclusive, cost-effective, and user-friendly financial services. Launched in 2018, Opay has quickly become a major FinTech player in Nigeria. Initially focused on mobile payments, it has since expanded into ride-hailing, food delivery, and financial offerings such as savings and micro-lending (Daniel, 2023). Its success is attributed to its innovative approach, user-centric platform design, and responsiveness to the specific needs of Nigerian consumers. Customer satisfaction in FinTech is influenced by various factors, including ease of use, system reliability, accessibility, security, cost efficiency, and the quality of customer support (Marvel, 2022). For companies like Opay, ensuring high levels of customer satisfaction is vital to retaining users, encouraging referrals, and sustaining long-term growth. Therefore, this study explores how FinTech—using Opay as a case study—impacts customer satisfaction in Nigeria. 1.2 Statement of the Problem The rapid advancement of Financial Technology (FinTech) has reshaped the delivery and structure of financial services globally and in Nigeria. FinTech platforms are recognized for their speed, accessibility, and convenience, outperforming many conventional banking models. Opay, as a prominent player in the Nigerian FinTech industry, provides services spanning digital payments, transport logistics, food ordering, and microfinance. Despite widespread availability, several challenges persist, which may affect customer satisfaction and the broader acceptance of FinTech services. Although FinTech aims to simplify financial processes, questions remain about the true usability and accessibility of its services, especially among diverse demographic groups (Ikott, 2023). For instance, the effectiveness of Opay’s interface in serving both literate and less-educated populations—particularly the unbanked and underbanked—requires scrutiny. Barriers such as complex app navigation, language limitations, and digital literacy disparities can hinder optimal user experience (Daniel, 2023). Chris (2021) stresses the importance of trust in FinTech systems, noting that operational reliability and service security are vital to achieving customer satisfaction. Yet, users have reported issues with failed transactions, slow processing, and occasional system outages. Moreover, threats like cyber fraud, unauthorized account access, and data breaches can significantly erode consumer trust and satisfaction (Marvel, 2022). Equally important is the efficiency of customer service. Delayed responses, poor complaint resolution, and limited customer engagement contribute to negative user experiences and loss of patronage (Agege, 2019; Martin et al., 2020). Furthermore, cost-related issues—including transaction fees and hidden charges—also play a major role in determining user satisfaction. Unfavorable pricing structures can dissuade adoption and continued usage of FinTech services (Marvel, 2022). A detailed analysis of Opay’s pricing strategy and its effect on user satisfaction is therefore essential. Previous research has largely examined customer satisfaction from a general banking perspective. However, this study uniquely focuses on satisfaction specifically related to FinTech services, with Opay as a focal point. To the best of available knowledge, no empirical study has yet addressed how FinTech affects customer satisfaction in Nigeria. This research introduces variables such as transaction efficiency, service security, usability, and overall service performance to evaluate their direct impact on user satisfaction. Hence, the need for this investigation becomes imperative. 1.3 Objectives of the study The primary objective of this study is to investigate The Role of Financial Technology (FinTech) in Enhancing Customer Satisfaction in Nigeria: A Case Study of OPay . Specific objectives of this study are to: i.To assess the various services offered by Opay in Nigeria ii.To assess the level of customer satisfaction with Opay's financial services iii.To identify the key factors (such as ease of use, transaction speed, reliability, customer support, and security measures) that influence customer satisfaction in the context of FinTech services in Nigeria iv.To examine the challenges faced by Opay users and how these impact their overall satisfaction. v.To provide recommendations for improving customer satisfaction in FinTech services, specifically for Opay. 1.4 Research Questions The following research questions which are in line with the objectives of this study will be answered in this study: i.What are various services offered by Opay in Nigeria? ii.What is the level of customer satisfaction with Opay's financial services? iii.What is the factors that influence customer satisfaction in the context of FinTech services in Nigeria? iv.What are the challenges faced by Opay users and how do these challenges impact their overall satisfaction? v.What are the recommendations for improving customer satisfaction in FinTech services, specifically for Opay? 1.5 Research Hypotheses To determine the effectiveness of this study, the following research null hypotheses will be formulated to guide the study and it will be tested at 0.05% levels of significance.: Ho: There are no significant factors that influence customer satisfaction in the context of FinTech services in Nigeria. Ha: There are significant factors that influence customer satisfaction in the context of FinTech services in Nigeri. 1.6 Significance of the study An examination of FinTech and consumer satisfaction in Nigeria, namely through a case study of Opay, holds great importance due to its potential impact on financial inclusion, economic growth, business tactics, regulatory structures, academic discussions, and socioeconomic empowerment. The statement highlights the significant impact that FinTech may have on promoting inclusive economic growth and enhancing the quality of financial services for both individuals and businesses in Nigeria. The study will be highly significant for the general public, as well as for policymakers, students, and scholars. Opay, a FinTech platform, plays a vital role in improving financial inclusion in Nigeria. They provide easily accessible and user-friendly financial services, such as mobile payments, savings, and transfers, to meet the needs of underserved groups who may lack convenient access to conventional banking services. Assessing client satisfaction with these services might reveal the extent to which FinTech platforms are effectively contributing to the objectives of financial inclusion. Customer satisfaction has a direct impact on the business success and sustainability of FinTech companies such as Opay. An examination of the aspects that influence customer satisfaction, such as service quality, simplicity of use, security, and reliability, yields significant evidence for improving business strategies, boosting service offerings, and retaining loyal customers in a competitive market. Moreover, enhanced availability of financial services can foster economic expansion by enabling individuals and small enterprises to engage more actively in the official economy. Increased customer satisfaction with FinTech platforms can serve as an indicator of their efficacy in expediting transactions, minimising expenses, and enhancing overall financial efficiency for users in Nigeria. Moreover, the results can provide valuable insights to policymakers and regulators regarding the influence of FinTech on consumer well-being and market dynamics in Nigeria. This comprehension can direct the creation of regulatory frameworks that promote innovation, safeguard consumers, and encourage fair competition in the FinTech industry. Additionally, this study enhances academic literature by presenting empirical proof about customer happiness in the context of FinTech adoption in emerging markets such as Nigeria. This study contributes to the existing information on the factors that affect user acceptance of digital financial services. It also provides valuable comparative insights by examining global trends in the use of financial technology (FinTech). 1.7 Scope of the study The primary objective of this study is The Role of Financial Technology (FinTech) in Enhancing Customer Satisfaction in Nigeria: A Case Study of OPay. Specific objectives of this study are to: To assess the various services offered by Opay in Nigeria To assess the level of customer satisfaction with Opay's financial services To identify the key factors (such as ease of use, transaction speed, reliability, customer support, and security measures) that influence customer satisfaction in the context of FinTech services in Nigeria To examine the challenges faced by Opay users and how these impact their overall satisfaction. To provide recommendations for improving customer satisfaction in FinTech services, specifically for Opay. Broadly, this study focus is to critically assess financial technology (Fintech)and customer satisfaction in Nigeria. Specifically, this study seeks to assess the various services offered by financial technology in Nigeria, assess the level of customer satisfaction with Fintech services and identify the key factors (such as ease of use, transaction speed, reliability, customer support, and security measures) that influence customer satisfaction in the context of FinTech services in Nigeria.  Further, this study will focus on examine the challenges faced by Fintech users and how these impact their overall satisfaction and it also seeks to provide recommendations for improving customer satisfaction in FinTech services in Nigeria.  The study is carried out in Nigeria.  1.8 Limitations of the study Like in any human attempt, the researchers encountered several small limits during the investigation. The primary constraint was the dearth of comprehensive literature on the topic, given the scarcity of data pertaining to financial technology (Fintech)and customer satisfaction in Nigeria. (A Case Study of Opay). Therefore, a substantial investment of time and effort was required to identify the suitable materials, books, or information and to collect data.  Moreover, this study is limited by its diminutive sample size and restricted geographical range, concentrating just on Nigeria. Hence, the findings of this study cannot be extrapolated, thereby necessitating additional research.  Furthermore, the researcher's restraints were predominantly attributable to financial limitations, as they are a student without a means of revenue to support themselves. The research location's high transportation costs, impacted by current inflation in Nigeria, made it difficult to afford transportation fees. In addition, the researcher encountered a time limitation as a result of the necessity to do this research while simultaneously meeting the responsibilities of attending lectures and engaging in other educational pursuits. 1.9 Definition of terms Financial technology: Financial technology (better known as fintech) is used to describe new technology that seeks to improve and automate the delivery and use of financial services. At its core, fintech is utilized to help companies, business owners, and consumers better manage their financial operations, processes, and lives. Customer satisfaction: Customer satisfaction (CSAT) is a measure of how well a company's products and services meet customers' expectations. It reflects your business' health by showing how well your products are resonating with buyers.