FinTech for Digital Financial Services: The African Case

Introduction

In a competitive environment dominated by technology, the growth of modern business is closely linked with technological innovations. Betz (1998 p.23) described technological innovation as the invention of new technology and the development and introduction of the technology into the market place. Technological innovations comprised modified products and processes that improve on performance characteristics (OECD, 2002).

For businesses to thrive in this digital era there is need for such business entities to continue to innovate in order to deliver quality products and services to consumers as well as compete effectively in the industry. According to the Oslo manual, an innovation is defined as the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations (Eurostat and OECD, 2005). The Oslo manual further stated that the minimum requirement for an innovation is that the product, process, marketing method or organizational method must be new (or significantly improved) to the firm. Innovations activities are all scientific, technological, organizational, financial and commercial steps which actually, or are intended to lead to the implementation of innovations. Innovations activities also include Research and Development that is not directly related to the development of a specific innovation.

Shukla (2017), while defining innovation as exploiting new ideas leading to the creation of a new product, process or service said it is not just the invention of a new idea that is important, but it is actually, ‘bringing it to market’, putting into practice and exploiting it in a manner that leads to new products, services or system that add value or improve quality. According to him, innovation also means exploiting new technology and employing out-of-the-box thinking to generate new value and to bring about significant changes in society. Berry and Taggart (1994 p. 341) viewed innovation as the total process from the inception of an idea through to the manufacture of a product and finally, to its ultimate sale. They further added that innovation includes invention as the many stages of implementation such as research development, production and marketing.

It is obvious from the foregoing that innovation may have slightly different meanings depending on the industry but its core is universal. Jacob Beckley in an article he wrote for Business NewsDaily said innovation embodies the improvement of something that has come before and it is the evolution of convenience, efficiency and effectiveness. As the Fusion 92 vice president put it, the companies that do their best are the ones that will ultimately have sustained success:

Innovation helps businesses to stay ahead of the competition as the market and trend continue to shift. ImagineNation (2018) asserted that innovation enables businesses to achieve a range of key business outcomes including: (1) engaging and aspiring people to tap into the power of the internal crowd, and empower people to create, invent and innovate new products, processes and services; (2) increasing their return on investment (ROI) to shareholders; (3) achieving business growth goals and improving bottom line results; (4) increasing business value making the business attractive to shareholders, mergers and acquisitions; (5) making productivity and efficiency gains to increase profitability; (6) competing successfully to respond to industry disrupters, increase market share and extend product lifecycles; and (7) responding quickly by developing the internal capability in both human and technology resources to change direction and do things differently.

Businesses that are unable to innovate by recognizing their current resources, opportunities for development, response to customer or organizational needs and anticipation of future trends, run the risk of operating inefficiently (Innovation Xchange, 2018) as well as face decline and extinction. Technological innovations are therefore key enablers of businesses growth and development (Moore 2017; George, McGahan & Prabhu 2012).