Fintech as a driver for customer retention in the South African telecommunications industry
Date
2023
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Witswatersrand, Johannesburg
Abstract
This study explored the impact of financial technology (fintech) adoption by customers on customer retention in South Africa’s telecommunication industry. Telecommunications companies in South Africa have been at the forefront of bringing technological innovation into their processes at a very early stage. However, customer retention as a result of fintech adoption by customers is not clear. To retain customers in a competitive business environment, new products and services are usually employed. This study analysed the impact of fintech service adoption and telecommunication service adoption in retaining customers underpinned by the communication theory and UTAUT. Adoption was determined by the customer’s perceived values and usefulness of the services. Customer retention was determined by the customer’s intention to remain with the network provider and had no intention to switch to another network provider. A 33-item questionnaire was used to gather data from 130 telecommunication customers at Wits Business School (WBS). Correlation analysis, exploratory factor analysis and structural equation modelling were used to analyse the data collected. This correlation analysis revealed that there is a positive correlation and a statistical significance (r = 0,515 and p-value < 0,01) between customer retention and fintech service adoption. In contrast, traditional telecommunication services, an essential part of telecommunication companies, have insufficient evidence to suggest a statistically significant relationship (p-value -0,040) and correlation (r = 0,181) with customer retention. The results of this study provide insights for telecommunication firms to develop and expand fintech services for their existing customers. Implementing financial technology services will confer additional iii value beyond the scope of traditional telecommunication services. Communication was also seen to have a positive impact on fintech adoption over telecommunication adoption, thus having a positive impact as an additional variable. As a result of these findings and efforts employed by telecommunication firms as seen in media reports, SMS campaigns, social media, advertisements, mergersand acquisitions of fintech start-ups, fintech service adoption by customers has an impact on customer retention.
Description
A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Management in the field of Digital Business
Keywords
South Africa, Telecommunications, Fintech, Financial Technology, Customer Retention, UCTD