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Automated Teller Machine Transactions and Financial Performance of Deposit Money Banks in Nigeria: An Automated Teller Machine Transactions and Financial Performance of Deposit Money Banks in Nigeria: An Empirical Analysis

Akunoma Onome Omena, PhD Candidate Onuorha AC, PhD, Osuji CC, PhD

Abstract

The increasing reliance on digital banking solutions has significantly transformed financial services, with Automated1Teller1Machine (ATM) transactions playing a critical role in banking operations. This study examines the impact of ATM transactions on the1financial performance of Deposit Money Banks (DMBs) in Nigeria, utilizing a Robust Least Squares (RLS) estimation technique to analyze quarterly data from 2009 to 2023. The study employs Return on Assets (ROA), Return on Equity (ROE), and Capital Adequacy Ratio1(CAR) as proxies for financial performance. The findings reveal that while ATM transactions exhibit a statistically insignificant effect on ROA and ROE, they have a significant positive relationship with CAR, suggesting that ATM services contribute more to the financial stability of banks than to their profitability. The study also highlights key challenges associated with ATM usage, including network failures, fraud risks, and high maintenance costs, which may limit its full potential in enhancing bank performance. Given these findings, the study recommends that Nigerian banks strengthen ATM infrastructure, enhance cybersecurity measures, integrate emerging technologies such as blockchain, and implement customer education programs to optimize ATM efficiency and mitigate associated risks. These measures will enhance financial inclusion, improve customer satisfaction, and sustain the overall financial health of deposit money banks in Nigeria.

Keywords

ATM transactionsfinancial1performance1deposit money banksdigital banking

References

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