E-Channels and Financial Performance of Deposit Money Banks in Nigeria.

Abstract:

The Nigerian banking industry has experienced unstable and declining performance over the past two decades due to economic, technological, and regulatory challenges. In response, banks have invested heavily in ICT and E-channels to enhance their competitiveness and overall performance. However, the impact of technology on banks’ financial performance remains inconclusive. This study, therefore, examined the effect of banks’ e-channels (Automated Teller Machines, Point of Sale terminals, Bank Applications/USSD and Bank Verification Number Enrollment) on the financial performance (Profit After Tax) of deposit money banks in Nigeria. The study adopted a quantitative research design and collected time-series data from 14 sampled deposit money banks over ten years (2015–2024). Data sources included the National Bureau of Statistics (NBS), the Central Bank of Nigeria (CBN) Bulletin and the banks’ annual reports. The study is anchored in the Resource-Based Theory (RBT), and both descriptive statistics (mean, standard deviation, minimum, and maximum) and inferential statistics (correlation and regression analysis) were used to analyse the data. The findings revealed that ATM transactions, POS terminals and BVN enrollment had positive and statistically significant effects on the banks’ financial performance. However, Bank Application/USSD transactions showed a positive but insignificant effect on performance. The study concludes that e-channels have a significant effect on the performance of deposit money banks in Nigeria. The study recommends that banks should invest in the latest ATMs, expand POS outlets, train staff, and strengthen their internet/network services to improve customer convenience for mobile transactions. At the same time, the Central Bank of Nigeria (CBN) should enforce strict compliance with BVN enrollment to reduce fraud and enhance performance.