THE IMPACT OF ELECTRONIC BANKING ON THE PROFITABILITY OF DEPOSIT MONEY BANKS

ABSTRACT

This research delves into investigating the impact electronic banking has on the profitability of Deposit money banks in Nigeria. Studies on the impact of electronic banking on the profitability of DMBs in Nigeria have produced mixed results. The banking industry is being influenced by the new innovations brought about by technology the transformation has changed the way banks carry out their services from the traditional means to electronic means. This study investigates how the electronic banking channels through internet, POS and ATM have impacts on the profitability of deposit money Banks in Nigeria. The methodology of this study was quantitative in nature, using time series of data of 2011-2021, the study employed regression technique in the analysis of sourced data. Data were collected through secondary source from annual reports of 5 major DMBs in Nigeria which are major pioneers of the use of e-banking technology in provision of banking services. The study revealed that the total value of ATM transactions has a positive impact on the profits of DMBs same as POS transactions and mobile transactions. The study recommends that DMBs should increase the number of ATM so as to reduce queues at ATM and increase customer usage especially in rural areas as this will increase electronic banking in rural areas. Also, banks are advised to increase the number of their POS agents and conduct regular servicing, maintenance and update of their mobile app to prevent any network interference and ensure smooth mobile transactions especially in the area of USSD codes transactions.