EFFECT OF FINANCIAL TECHNOLOGY ON THE PROFITABILITY OF DEPOSIT MONEY BANKS IN NIGERIA

Abstract

This study evaluates the effect of financial technology on the profitability of Deposit Money Banks in Nigeria from 2010 to 2021. The secondary data covering the period of the study were sourced from the CBN statistical Bulletin (2021) and CBN Financial stability Report (2010-2021). The research design adopted in this study is ex -post facto. The Granger Causality Test was utilized to investigate the causal flow between the independent and dependent variables. Rombust Least Square (RLS) regression model was applied in estimating the regression coefficients. This research work is anchored on Technology Acceptance Model. The finding reveals Internet banking has a positive and significant effect on the profitability of DMBs in Nigeria, Automated teller machine has a positive but non-significant effect on the profitability of DMBs in Nigeria, Mobile banking has a negative but non-significant effect on the profitability of DMBs in Nigeria, POS operations have a negative but non-significant effect on the profitability of DMBs in Nigeria. The study's findings suggest that DMBs in Nigeria can significantly have better returns from the adoption of internet banking. This electronic banking channel can reduce operating costs, attract tech-savvy customers, and increase revenue for DMBs. The findings also suggest that while ATMs can provide benefits to DMBs, their effect on profitability may not be statistically significant. Finally, the study found that the adoption of mobile banking and POS operations may not provide significant benefits to DMBs in terms of increased revenue and reduced costs. Generally, the study's findings have important implications for policymakers, bankers, Bank managers, and stakeholders in the Nigerian banking industry. The findings suggest that policymakers can encourage the adoption of internet banking by DMBs in Nigeria to increase the sector's profitability.