Digital Finance Channels and the Financial Performance of Deposit Money Banks in Nigeria

Abstract

The study examined the effect of digital finance channels on the financial performance of deposit money banks (DMBs) in Nigeria for the period of (15) years on a quarterly basis from (2009Q1-Q4) to (2023Q1-Q4). The independent variables employed in the study are; Automated Teller Machine (ATM), Mobile banking (MOB), Point of Sale (POS) and Web pay (WP) and financial performance of DMBs proxied Return on Asset (ROA). Data was collected from the CBN Statistical Bulletin for (2009Q1-Q4) to (2023Q1-Q4). Quarterly data was analyzed using descriptive statistics, correlation analysis and Ordinary Least Square Method (OLS) with the help of E-VIEW version 9.0 for the hypotheses raised. The finding shows automated Teller Machine (ATM) has positive and significant effect on financial performance of DMBs in Nigeria, Mobile Banking has positiveand significant effect on financial performance of DMBs in Nigeria, Web-pay has negative and significant effect on financial performance of DMBs in Nigeria and Point of Sales have positive and statistically significant effect on financial performance of DMBs in Nigeria. The study thereby recommends that DMBs continue to expand and strategically deploy ATM networks for increased revenue generation, cost efficiency, customer retentions and satisfaction, enhanced deposit mobilization and support for digital banking integration. Also, the study recommends that there should be public enlightenment on the benefit that is accruable from the usage of Mobile transfer transaction. This would help to reduce the ills associated with the use of mobile banking.