Renegotiating Legitimacy in the Digital Age: Insights from Nigeria

Authors: Taura, N.

Editors: Ede, O.C. and Ogunniyi, O.

Publisher: Palgrave Macmillan


The chapter explores an emerging discourse in regards to new entrants Vs Incumbents shaping the Nigerian digital banking space. We focus on the Nigerian incumbent banks strategy to digital banking in the light of legitimacy erosion, following the threats posed by a wave of new entrant fintechs – as this is underexplored in the literature. We then followed with a discussion on digital infrastructure and the challenges encountered by the incumbent banks with links to e-trust, and digital awareness. Prior to introducing the methodology, we traced the origin of legitimacy challenges encountered by Nigerian incumbent banks to pre-independence (when the first waves of Nigerian indigenous-incumbent banking started).

We conducted interviews with five (5) seasoned bankers in Nigeria about the changing nature of Nigerian banking industry with particular link to re-establishing legitimacy in the digital age as well as new forms of cooperativeness between incumbent banks vs new entrant fintechs. Our discussion of findings is grouped in to emerging themes of barriers to digital banking, investment in digital infrastructure, and technology as a facilitator or inhibitor to cooperativeness and trust. We also find and discussed the implications of three approaches to re-negotiating legitimacy in a digital age favoured by Nigerian incumbent banks namely a) the digital outsource, b) collaborative (in-house digital unit with external partnerships), and finally c) going fully digital. We concluded with insights and learning from a rather unique but intriguing case – with illustration of good practices from Wema Bank Plc (one of the oldest – indigenous-incumbent Nigerian bank – which went fully digital).

Source: Manual