Journal of Research in Economics and International Finance (JREIF) (ISSN: 2315-5671)
Vol. 5(2) pp. 014 - 028, July, 2016
Copyright © 2016 International Research Journals


Full Length Research Paper

Financial Innovation Adoption and Turnaround Time

Akinyele Akinwumi Idowu*, Dr Patrick Ngumi and Dr. Willy Muturi
Department of Economics Accounting and Finance(DEAF), College of Human Resources and Development (COHRED), Jomo Kenyatta University of Agriculture and Technology (JKUAT), Juja Campus, Kenya.
*Corresponding author e-mail address: idakinyele@gmail.com

ABSTRACT

The challenges associated with the use of manual banking and the dynamic nature of the environment that the industry operates in the country, necessitated the adoption of modern technologies, especially ICT – financial innovation by the Nigerian banking sector. This was aimed at improving service delivery and internal operation. Liberalised domestic regulations, intensified competition and the massive growth in information technology have also fueled the growing desire for innovation in the banking industry (Frei et al., 1998). Innovations provide an impetus for banks to improve their market performance by recovering from palpable inefficiencies prevalent in the banking industry (Frimpong, 2010). Financial innovative products and services have been found to be fast, cheap, reliable and efficient to prosecute banking transactions on either side, emphasizing time and cost advantages. But there is no commensurate evidence in the level of patronage and customer’s adoption. Though it is undeniable that innovation is important in expanding financial inclusion and deepening (Bamidele, 2006), the level and rate of financial innovation adoption has not been encouraging in Nigeria, very low (Agboola, 2006), causing concern in academic, finance, commerce and economic circles. The main objective of this study was therefore to determine how turnaround time affects the adoption of financial innovation products and services in Deposit Money Banks in Nigeria. Based on this objective it was hypothesized that: Turnaround time has no significant influence on the adoption of financial innovation. This study used mixed method design, relying on primary data collected through structured questionnaire and secondary data from authentic sources Descriptive and inferential analyses were used to display and relate data e. g. mean, frequency tables and multinomial regression was used to test the hypothesis. The sample size was 536, and 392 respondents returned the questionnaire duly filled. Evidence from the study showed that majority of the respondents opined that modern banking is faster than traditional banking. Findings on the study further showed that as far as turnaround time is concerned ATM is the most preferred, followed by POS and MB. This preference may have to do with what the customers are used to. As the products get more popular and recognized, there might be improvement. The import of this is that the banks have more works to do on public enlightenment and product awareness. Customers enjoy self-service, freedom from time and place constraint, and reduced stress of queuing in banking hall. Therefore, time, cost savings and freedom from place confinement have been found to be major factors underlying banking financial innovation adoption.

Keywords:  Industrialized, Financial deepening, Financial innovation, Cutting –edge, Core-competence, inefficiency, competitive advantage and Significance