Digitalization and the Financial Performance of Deposit Money Banks in Nigeria

Onoja Emmanuel Enenche; Nana Hawawu Jimoh

doi:10.56201/jafm.vol.12.no5.2026.p.490.507

📄 Download Paper

Digitalization and the Financial Performance of Deposit Money Banks in Nigeria

Onoja Emmanuel Enenche, Nana Hawawu Jimoh

Abstract

The main objective of the study is to investigate the Effect of information and communication technology on the financial performance of deposit money banks in Nigeria. The specific objectives are to: To ascertain the impact of ATM services on the ROE of deposit money banks in Nigeria and to ascertain the impact of POS banking services on the ROE of deposit money banks in Nigeria. The study adopted an ex-post facto research design because the data for the study are secondary data which were sourced from The Nigerian exchange group , financial statements of Listed deposit money banks. The result of the study indicate that automated teller machine has negative and significant effect on the financial performance of listed deposit money banks in Nigeria while Point of sale have significant effect on the financial performance of listed deposit money banks in Nigeria. The study thus concludes that information and communication technology have positive impact on the financial performance of listed deposit money banks in Nigeria and have enhance the return on equity of the deposit money banks in Nigeria. Amongst the recommendation is that every bank in Nigeria should not only invest heavily on ICT especially the POS, but should distribute same to business outlets where business owners and customers will have access to smooth and hassle-free transactions. It is therefore necessary for the government to emphasize the need for more policies that will boost the efficiency in utilization of ICT equipment by reducing the cost of acquiring them so as to reduce cost and boost the growth of the economy. The banks should embark on aggressive campaign and re-orientation of clients to create awareness for the customers to patronize the facilities especially in the area of use of POS, ATM and so on. Acceptance of these facilities will consolidate the gains from investing in them. In achieving this, every bank should partner with the government to make internet connectivity cheap and accessible, especially in the rural areas. There is significant need for public education and awareness on the benefits of e-payments. All stakeholders must strengthen system security and integrity to prevent/reduce frauds and errors to improve public confidence in e-payments. There is additional need for ensuring ease of use, and customer interactive features in mobile and on-line shopping systems.

References

Abaenewe, Z. C.; Ogbulu, O. M.; Ndugbu, M. O. (2013). Electronic banking and bank performance in Nigeria, West African Journal of Industrial and Academic Research 6(1): 171–187. Adaora, I. M.., Jisike, J. O.& Amalachukwu, C. A. (2018). Effect of automated teller machine fraud on deposit money banks financial performance in Nigeria: Discovery Publication. All Rights Reserved 4 (3), 4-61. Agbada, A. O. (2008). Electronic Banking in Nigeria, Problems and Prospects from theConsumer’s Perspective.Central Bank of Nigeria Bullion, Volume 32, number 4: October – December. Agwu M.E., Atuma O., Ikpefan, O.A. & Aigbiremolen, M.O. (2014). Impediments to e- banking services marketing in developing economies – a study of Nigerian banks. European Journal of Business and Social Sciences ; 5(3),2-25 Ahmed, A.M. & Khababa, N. (2009). Performance of the banking sector in Saudi Arabia, Journal of Financial Management Analysis, 12 (2), pp. 30-36. 4. Akwu, A. U., Duke, A. E., & Inuaesiet, V. U (2021). Impact of information and Communication Technology on the Development of Nigeria: A Critical Overview. International Journal of Public Administration and Management Research 7,(1) 56-78. Ajzen, I. (1985), From intentions to actions: A theory of planned behaviour in J. Kuhl, J. Beckmann , Action Control from Cognition to Behaviour, Springer Verlag, New York. Al-Smadi, M.O. & Al-wabel S.A. (2011). The impact of electronic banking on the performance of Jordanian Bank. Journal of Internet Banking and Commerce 16(2). Anyanwuokoro, M., 2008. Methods & processes of bank management. Enugu: Johnkens & Willy Publication Nig. Ltd. Asidok, N. O. & Michael, A. A. (2018). Mobile banking transactions and bank profitability in Nigeria: International Journal of Economics, Commerce and Management United Kingdom 6(6) 5-9 Auta, M. E. (2010). E-banking in developing economy: empirical evidence from Nigeria.Journal of Applied Quantitative Methods. 5(2). Balogun, E.O., 2016. Effect of information technology on organizational performance In nigerian banking industries. Research Journal of Finance and Accounting, 7. Bingilar, P.F. & Bariweni, B. (2019). Electronic payment systems implementation and theperformance of commercial banks in Nigeria. EJBMR, European Journal of Business and Management Research 4(5) Byrd, T. A. & Turner, D. E. (2001). ‘‘An exploratory examination of the relationship between flexible IT infrastructure and competitive advantage’’, Information and Management, 39, 41- 52. 15. Chorafas, D.S., 1988. Implementing networks in banking and financial services. New York: Houndmills. Dabwor, T. D., Ezie, O. & Anyatonwu, P. (2017). Effect of ICT adoption on competitive performance of banks in an emerging economy, the Nigerian experience. Journal of Humanities and Social Science, 22(8): 81-89. 17. Davis F. D. Bagozzi, R. P. and Warshaw, P. R. (1989).User Acceptance of Computer Technology.ISBN 982-1003. Delgado, J., Hernando, I. & Nieto, M. J. (2007). Do European primarily internet banks show scale and experience efficiencies? European Financial Management. 13(4), 643-671. 18. JAFM JAFM DeYoung, R. (2015). The performance of internetbased business models: evidence from the banking industry. Journal of Business, 78(3), 893- 947. 19. Furzaneh, H., 2012. An analysis on the impact of information and communication technologyon deposit money banks. International Journal of Management Sciences, 5: 12-18. Guru, K. G. & Staunton, J. (2012). Determinants of commercial bank profitability in Malaysia University Multimedia Working Papers. 23. Hunton, B. and K. Flowers, 1997. Introduction to information technology and decision making. The Macmillian Edu Ltd. Husni, A. K., & Noor, M. A. S. (2011). The impact of e-banking on bank profitability: empirical evidence from Jordan. Middle Eastern Finance and Economics, 13: 142 – 158. Ikpefan, O.A. and M. Agwu, 2015. Leadership of modern financial institutions and the changing paradigm of Banking in Nigeria. Journal of Internet Banking and Commerce, 20(3): 1-17. Available at: https://doi.org/10.4172/1204-5357.1000137. Ighoroje, E.J., & Okoroyibo, E. E., (2020), Cashless policy and the performance of depositmoney banks in Nigeria. European Journal of Accounting, Auditing and Finance Research, 8(5), 85-104. Joseph, M. V. (2019). Impact of electronic banking on the profitability of commercial banks in Kenya: Journal of Technology and Systems 1(18) 18 – 39. Kelvin, O. (2012). Mobile money for financial inclusion. Journal of Macro Finance, Africa 4(14). Lamminen, J., H. Forsvik, V. Voipio and L. Lehtonen, 2015. Decision making process for clinical it investments in a public health care organization–contingency approach to support the investment decision process. Finnish Journal of eHealth and eWelfare, 7(2-3): 122-134. Lasisi, M. A. R. & Abubakar, S. J. (2020). An empirical study of automated teller machine and user satisfaction in Nigeria: A study of united bank for Africa in sokoto metropolis: International Journal of Management Technology 2, (3)1- 11, Micropayment Systems, UK Cambridge: Journal of Electronic Commerce Research, 5(4) Luka, M.K. and I.A. Frank, 2012. The impact of ICTs on banks: A case study of the Nigeria banking industry. International Journal of Advanced Computer Science and Applications, 3(9): 145-149. Malhotra, P. & Singh, B. (2009). The Impact of Internet Banking on Bank Performance and Risk: The Indian Experience. Eurasian Journal of Business and Economics, Volume 2, number 4: Pp. 43 - 62. Morufu, O. (2016) E-payments adoption and profitability performance of deposits money banks in Nigeria. International Journal of Information Technology, 4(3), 89-103. Moudud-Ul-Huq, S., & Hossain, S. A., (2020). Impact of cashless policy on bank’s profitability: Evidence from a developing economy. International Journal of Financial Engineering, 7(3), 1-15 Obiekwe, C. J. & Mike,A. (2017). Electronic payment methods and profitability of banking firms in Nigeria: A Panel Data Analysis. International Journal of Finance and Accounting, 6(3): 67-74. DOI: 10.5923/j.ijfa.20170603.01. Oyinkola, S., 2018. The impact of nformation technology on banking operations in First Bank of Nigeria PLC. Available from www.researchclue.com. Rose, P.S. and S.C. Hudgins, 2006. Bank management & financial services. 6th Edn., New York: McGraw-Hill. JAFM JAFM Sinkey, Jr. & Joseph, F. (1992): Commercial Bank Financial Management. In the Financial Service Industry, (4th Ed.), Macmillan Publishing Company, Ontario. Shehu, U. H., Aliyu, M., & Musa, A. F. (2013). Electronic banking products and performance of Deposit Money Banks. American Journal of Computer Technology and Application,1(10): 138 – 148. Tijani, J.A. & Ilugbemi, A.O. (2015). Electronic payment channels in the Nigeria banking sector and its impacts on national development, Asian Economic and Financial Review, 5(3): 521-531. Ugbede, J. T., Yahaya, A. & Edicha, M. J., (2019). Effect of electronic payment on financial performance of deposit money banks in Nigeria. Lafia Journal of Economics and Management Sciences 4(1). ISSN: 2550 -732X 114. Ukah, M.I., 2013. Adoption of information and communication technology in the banking sector; success or failure? , Markurdi: Superlife Consulting.

Digitalization and the Financial Performance of Deposit Money Banks in Nigeria

Abstract

References

More Articles from JOURNAL OF ACCOUNTING AND FINANCIAL MANAGEMENT