Abstract
The paper evaluated the cost-benefit implications in the emerging electronic banking space in Nigerian financial sector. Data were collected from CBN statistical bulletin and NDIC annual report. Twenty one (21) banks operating in Nigeria constitutes the population of the study and sample size of twelve (14) years was selected through purposive sample method. Auto-Regressive Distributive Lag (ARDL) was used to analyze the data after stationarizing it through Augumented Dicky Fuller (ADF) unit root test. The findings show that ATM, POS and MB have no significant effect while WIT has negative significant on banks’ profit. The findings further reveal that the combination of these variables has positive and significant effect on banks’ profit. We therefore recommend that banks should fully utilize the benefits provided through electronic banking by ensuring that more ATM terminals are provided in order to reduce crowd. Professionals that can constantly put the machine in order should be emlpoyed and there should be constant money in the machine to enable the banks make more profits and serve the people better at all times. POS should be made available to the users and at a reduced cost without hidden charges to enable people of different categories have access to them. This will help to generate revenue to the banks and reduce their cost of transaction etc.
Highlights
Nigeria financial sector, especially banks, has migrated from crude traditional method of paper works to highly sophisticated electronic banking in this modern time. Shehu, Aliyu & Musa (2013) citing from Daniel (1999) describes electronic banking as the provision of banking services to customer through internet
The coefficient of determination (R2) of 0.984942, which implies that variations in all the explanatory variables account for 98.49% of the variations in profit before tax, while the rest 1.51% of the variations is attributable to other variables not captured in the study
Auto-Regressive Distributive Lag (ARDL) short run result showed that Automated Teller Machine (ATM), Point of Sale (POS), mobile banking (MB) and Web (Internet) Transactions (WIT) showed that ATM, POS and MB are not significant whereas WIT has negative significance at 5 percent level of significance during the period of the study
Summary
Especially banks, has migrated from crude traditional method of paper works to highly sophisticated electronic banking in this modern time. Shehu, Aliyu & Musa (2013) citing from Daniel (1999) describes electronic banking as the provision of banking services to customer through internet. Shehu, Aliyu & Musa (2013) citing from Daniel (1999) describes electronic banking as the provision of banking services to customer through internet. Electronic banking helps to give customers access to their bank account via a website and to enable them enact certain transactions on their account given compliance with stringent security checks (Essenger 1999). The benefits associated with electronic banking in Nigeria are: the emergence of knowledge driven banking industry, global interconnectivity of the Nigerian banking industry with other economies, a sign post for growth and economic development, availability of diverse jobs, optimization of money value of time, widening of banking space by bringing in more persons both far and near into the banking space, increase in the volume of banking transaction due to increase in the number of clients and increasing volume of revenues and profits
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