FINANCIAL TECHNOLOGY (FIN TECH) AND FINANCIAL PERFORMANCE OFDEPOSIT MONEY BANKS IN NIGERIA

Abstract

Nigerian banking sector has continued to digitise in response to global trends and customer
preferences, it becomes critical to empirically assess how specific fintech tools contribute to
core bank performance indicators such as aggregate banking sector’s ROA. This study
examines the impact of FinTech payment platforms on the financial performance of Nigerian
deposit money banks within the broader context of Nigeria’s growing digital finance
ecosystem. Focusing on Automated Teller Machines (ATM), Point of Sale (POS) systems, Web
Pay (internet banking), and Mobile Pay (mobile banking), the study investigates their influence
on Return on Assets (ROA) using a population sample of all licensed deposit money banks over
the period 2009 to 2023. Secondary data were sourced from the Central Bank of Nigeria
(CBN) Statistical Bulletin. The study adapts the empirical framework of Bashayreh and Wadi
(2021) but modifies it to align with the Nigerian FinTech context, applying Robust Least
Squares (ROLS) regression analysis to account for heteroskedasticity and potential outliers.
The findings reveal that ATM and POS transactions have significant negative effects on
financial performance, whereas Web Pay and Mobile Pay exert significant positive impacts,
highlighting the uneven financial outcomes of different Fintech channels. Based on these
results, it is recommended that banks prioritized investment in mobile and internet banking
platforms while safeguarding transaction security and consumer protection.