Adoption of Financial Technology and performance of Deposit Money Banks in Nigeria

Abstract

The present study investigated the impact of Fintech on the performance of Nigerian banks, focusing on United Bank for Africa (UBA) and Zenith Bank as case studies. In this study, the secondary used data are collected from the banks’ quarterly report and payment information system from the Central Bank of Nigeria statistical bulletin from 2012 to 2019. The ARDL technique estimation was employed to analyse the models. The findings reveal that payment technologies have both positive and negative effects on key financial indicators such as earnings per share, price-earnings ratio, return on assets, and short and long term return on equity. However, the positive impact outweighs the negative impact. Consequently, payment financial technologies offer promising opportunities for enhancing the performance of Nigerian banks, as they can contribute to an increase in return on assets and equity, earnings per share, and price-earnings ratio. Therefore, the study recommends that banks leverage the positive effects of these payment financial technologies while taking proactive measures to address potential challenges, such as cyber fraud and other obstacles that may adversely affect the performance. Nigerian banks can harness the benefits of Fintech to drive financial inclusion and improve their overall performance.