Fintech Operations and Banks’ Profitability

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The study examined how Fin Techs affect the banks’ profit in Nigeria. The intent of this research was to see how the advancement of Fin Techs has affected banking performance in Nigeria. Annual transaction volumes from digital payment platforms, digital banking platforms, digital lending and loans platforms, and digital investment and crowd contributory platforms were used to achieve this, while profitability in Nigeria was measured using the aggregate ROA for all deposit money banks (DMBs). Secondary data on the selected FinTech platforms and banks for a period of 11 years, from 2010 to 2020 were used for this study. The ordinary least square (OLS) regression estimation technique was utilized for data analysis, with diagnostic tests such as ADF for unit root detection, Jarque-Bera for data normality, and Relation matrix for suspected multicollinearity being employed to assess the data's and model's fitness. The results showed no evidence of auto-correlation and indicated that the model is fit with 74 percent. Furthermore, due to the increased amount of transactions flowing through these technologies in conjunction with banks, the regression result demonstrated that the introduction of FinTechs has greatly boosted banks’ profit. Thus, Nigerian banks have reaped enormous benefits from financial innovations. The paper recommends that banks should take advantage of financial innovations to immediately boost their profitability by reaching out to the unbanked. These FinTechs make it possible for banking to be initiated and completed without emphases on physical appearance.