THE ROLE OF FINANCIAL TECHNOLOGY (FINTECH) IN ADAPTING TO ECONOMIC VOLATILITY: A FOCUS ON NIGERIA
Abstract
The digital age has resulted in a transformative shift in the financial industry, enabling financial institutions to reach previously "unbanked" consumers in emerging economies while keeping current traditional bank customers (Saal et al., 2017. Economic volatility, characterized by unpredictable fluctuations in economic growth, inflation, and exchange rates, presents significant challenges for financial stability and development, particularly in emerging markets like Nigeria. Financial technology (FinTech) has emerged as a transformative tool, enabling individuals, businesses, and governments to navigate these uncertainties effectively. This article examines the role of FinTech in adapting to economic volatility in Nigeria, emphasizing its potential to enhance financial inclusion, streamline payment systems, and improve overall economic activities. The selected FinTech services—ATM, PoS, and mobile payments—showed a fluctuating but generally upward trend in production and popularity, peaking in 2020, likely due to the COVID-19 pandemic. Among these, ATMs were the most popular, although PoS and mobile payments have seen significant growth since 2017 and 2019, respectively. Data for this study was collected from the Central Bank of Nigeria, Macrotrends, and Statista, covering data from the past ten years, 2013 to 2023. Regression analysis was used in executing the data analysis. The study highlights how FinTech platforms have leveraged digital innovation to provide scalable solutions during economic disruptions, such as the COVID-19 pandemic, inflationary pressures, and exchange rate volatility.