Digital empowerment: Banks and the rise of FinTechs in Kenya and Nigeria

This paper examines how the rise of FinTech companies has affected the power of banks. Specifically, we employ comparative case studies of Kenya and Nigeria to explore how the rise of FinTechs has affected banks' ability to exercise control over the emerging digital financial infrastructure. We find that cross-national variation in the relationship between the state and private sector in the allocation of economic resources has led to cross-national differences in the regulatory framework for digital financial services, which in turn explain differences in banks’ ability to control the emerging digital financial infrastructure on which the financial sector increasingly relies. Our article not only makes an empirical contribution by studying how banking meets digitalisation in lower-income country contexts, which are under-researched but also, contributes to broader theoretical discussions about the changing power and purpose of banks in the digital era.