Effects of Financial Innovations on the Profitability of Deposit Money Banks in Nigeria

Abstract

This study examined the effects of financial innovation on the profitability of deposit money banks in Nigeria. the general purpose of the study was to examine the effect of financial innovation on the profitability while the specific objectives was to examine the effect of  automated teller machine, electronic fund transfer,  internet banking, mobile banking and investment on information  communication technology on return on equity of deposit money banks.   The study formulated four hypotheses and used panel data regression to analyze the secondary data extracted from the annual reports and accounts of the fourteen firms for the period 2009 to 2017. Return on equity was the dependent variables while automated teller machine, electronic fund transfer, internet banking, mobile banking and investment on information communication technology on return were the independent variables. Findings of the study revealed that automated teller machine and electronic fund transfer have negative relationship with return on equity while    internet banking, mobile banking and investment on information communication technology have positive relationship with return on equity. The study recommends that deposit money   banks should adopt financial innovations, deposit money banks invest in technological innovations and banks should transform banking service by adapting to mobile banking and agency banking so that not only to providing jobs but also increase market share.

Keywords: Banks’, Deposit, Money, Nigeria, Profitability, financial innovations

DOI: https://doi.org/10.37745/ejaafr/vol8.no1.pp52-73.2020

Article Review Status: Published

Pages: 52-73 (Download PDF)

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