Abstract
Electronic banking has become a central concept in the banking industry due to its ability to increase operational efficiency and enhance financial performance. Nevertheless, the challenges of huge capital expenditure on development, and the increased cost of operation on the maintenance of e-banking facilities to achieve operational efficiency subsist in Nigeria. This paper examined the effects of electronic banking on the aggregate financial performance of Deposit Money Banks in Nigeria for eight years. The focus was on selected electronic banking products - Mobile payments, Automated teller machine (ATM), Internet banking (WEB) and Point of sale (POS) transactions. Secondary data were collected and analyzed quantitatively. Four hypotheses were formulated and tested at a ninety-five percent confidence interval using the Ordinary Least Square (OLS) inferential statistical tool. The results indicated that e-banking in the aggregate has a positive but insignificant effect on the overall performance of Deposit Money Banks (DMBs) in Nigeria.
Highlights
The impact of technological developments on businesses in the area of information technology is so significant that it cannot be overlooked
The study examined the effects of e-banking on the financial performance of Deposit Money Banks (DMBs) in Nigeria by looking at the aggregate monetary value of the selected e-banking transactions {Mobile payments (MP), Automated teller machines (ATMs), Internet banking(WEB); and Point of sale (POS)} and the overall performance (ROA) of all the twenty-one DMBs as at 2018
It found that the use of e-banking products had a positive but insignificant effect on the overall financial performance of DMBs in Nigeria during the period covered by the study
Summary
The impact of technological developments on businesses in the area of information technology is so significant that it cannot be overlooked. This can be achieved by the click of a button, all through the day and night, and all year round The expectation of this technology-driven banking is a very high level of performance package which indicates goal attainment; customer satisfaction; and improved efficiency and effectiveness of operations amongst other benefits. Alongside the benefits of e-banking are challenges of power failure, inconsistency in services of the on-line connectivity, and insecurity motivated by the activities of hackers and internet fraudsters Addressing these issues requires a substantial financial commitment which raises the cost of operations thereby reducing profitability and leading to poor financial performance. The author posits that most DMBs in the economy possess increased profit without sustainable growth and that the adoption of electronic technologies has reduced the actual returns of bank stakeholders and raised their risk exposure All these combined, affect DMBs financial performance negatively. H02: The use of ATM for banking transaction has not significantly enhanced the financial performance of DMBs in Nigeria H03: The use of Internet banking (WEB) for banking transactions has not yielded any significant improvement on the financial performance of DMBs in Nigeria? H04: The use of POS has not brought about any significant effect on the financial performance of DMBs in Nigeria
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