Original Research

The global COVID-19 impact on the financial services industry in South Africa

Simphiwe K. Cele, Nhlanhla B.W. Mlitwa
South African Journal of Information Management | Vol 26, No 1 | a1887 | DOI: https://doi.org/10.4102/sajim.v26i1.1887 | © 2024 Simphiwe K. Cele, Nhlanhla B.W. Mlitwa | This work is licensed under CC Attribution 4.0
Submitted: 11 May 2024 | Published: 30 September 2024

About the author(s)

Simphiwe K. Cele, Graduate School of Business Leadership, University of South Africa, Midrand, South Africa
Nhlanhla B.W. Mlitwa, Graduate School of Business Leadership, University of South Africa, Midrand

Abstract

Background: In December 2019, coronavirus disease 2019 (COVID-19) was detected in Wuhan, China. This virus quickly spread throughout different regions and was declared a pandemic late in January 2020. The spread of the virus has affected every aspect of human life as previously known.

Objectives: This study aimed to investigate the impact of COVID-19 on the adoption of fintechs in South Africa.

Method: Eighteen financial services experts were interviewed using semi-structured interviews to collect data, and ATLAS.ti 28 was used to analyse the data.

Results: During the lockdowns, the industry expedited the implementation of fintech to sustain business operations. Online shopping, mobile payments, and digital banking experienced a surge in adoption as individuals steered clear of crowded stores and bank branches. The upswing in online shopping influenced the embrace of mobile payments and contactless cashless transactions. Moreover, with limited access to physical bank branches, there was a marked shift towards digital banking.

Conclusion: Fintech companies have introduced consumers to alternative financial technologies. The pandemic has accelerated the adoption of fintech as an essential means of transacting and banking. One limitation of the study is its timing because it was conducted during and immediately after the pandemic, therefore, it does not account for the long-term effects of the pandemic on the financial services industry. Consequently, future research could explore the impact of COVID-19 on the industry 5-10 years after the pandemic to evaluate any significant influence on the industry’s transformation.

Contribution: This study will assist the financial services industry to better respond to catastrophes such as COVID-19.


Keywords

fintechs; financial technologies; impact; COVID-19; adoption; lockdown; convenience; accelerate adoption

JEL Codes

G18: Government Policy and Regulation; L86: Information and Internet Services • Computer Software; M15: IT Management; N27: Africa • Oceania; O33: Technological Change: Choices and Consequences • Diffusion Processes

Sustainable Development Goal

Goal 9: Industry, innovation and infrastructure

Metrics

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