Risk Aversion and the Adoption of Fintech by South African Banks

With Fintech threatening to change the traditional role of banks, it is seen as both a threat and opportunity. Technology offers South African banks the opportunity to address inherent socio-economic imbalances in the economy. However, the potential systemic risk it poses threatens to aggravate the situation if it not properly regulated. This paper uses a non-positivist, qualitative research design - the case study approach - to argue that South African banks have adopted a measured mindset to adopting Fintech because they are fundamentally risk-averse. Structural socio-economic imbalances, legacy systems, and a banking industry that has traditionally been conservative are argued to be the main drivers of this. The findings posited by this paper are intended to sensitise policymakers to the thinking of South African banks when formulating policies that address developments in Fintech in the future.