The Impact of Electronic Banking on the Financial Performance of Nigerian Deposits Money Banks

Abstract

The banking industry has been tremendously influenced by technological advancements just like the other aspects of life. The emergence of e-banking has significantly redefined and transformed banks’ operations. Technology is viewed as the major driving force in firms’ performance success. All banks, irrespective of whether local or foreign are investing heavily on emerging technologies that assure customers’ satisfaction, effective and efficient service delivery in e-banking. This is done in an effort to achieve reduction in operating costs, increase volumes of transactions processed and attraction of new clientele. The study aims at discerning impact of electronic banking on the financial performance of Deposits Money Banks in the Nigerian banking industry. The study relied on descriptive study. The study was centered on all the 21 Deposits Money Banks governed and licensed in Nigeria. The study made use of secondary data for the period 2013 to 2017 obtained from reports and publications. Statistical package for the social sciences (SPSS) used to analyses the data’s descriptive statistics. To determine the associations between the return on assets and the electronic banking variables (ATM value of transactions, mobile banking value of transactions and internet banking value of transactions), a multiple linear regression model was put to use. The study established that electronic banking has contributed positively to the financial performance of Nigeria’s commercial banks. The study also showed that mobile, internet banking and use of ATM cards positively and significantly influenced the financial performance of Nigeria’s Deposits Money Banks as measured by the return on assets. The study recommends that Deposits Money Banks in Nigeria increase their efforts towards adoption of e-banking to automate their service delivery to customers and that the banking industry’s policy makers and regulators consider electronic banking as a major input when crafting guidelines to regulate the industry.