The Influence of Temperaments on the Adoption of Branchless Banking by SMMEs

Abstract

Recently, innovations driven by Financial Technologies (Fintechs) are posing challenges to the conventional financial service providers and might have a widespread and lasting impact on the financial sector. Branchless banking is a classic Fintech that offer financial services to individuals and corporates, especially Small Medium and Micro Enterprises (SMMEs).

This study set out to investigate the influence of temperaments on adoption of branchless banking by SMMEs. The study’s main focus was to explore how temperaments of SMME owners influence adoption of branchless banking services. Secondly, to examine the factors which inhibit SMME owners from adopting branchless banking services as well as identify incentives for switching from conventional to branchless banks. To achieve these objectives, 12 SMME owners were interviewed. who were selected from a database provided by iSell, which is a company that deals in the residential, commercial, industrial and leisure property markets in South Africa (very active in Gauteng province).

The results indicated that melancholy and phlegmatic temperaments influenced adoption of branchless banking among SMMEs. SMMEs of melancholy temperament were found to be willing to adopt branchless banking compared to their phlegmatic counterparts. The results also showed that the top inhibitors to adoption were preference to engage with physical customer service representatives, requirement of internet access, limited channels to cash out or deposit money and loyalty, trust and satisfaction in the conventional bank services. The results further indicated that lower bank charges were the most important incentive for SMMEs to switch from conventional to branchless banking.

In view of the above findings, branchless banking service providers should tailor their marketing approaches to address potential customers who have different temperaments as well as address the identified inhibitors and incentives