Digital Banking and the Performance of Deposit Money Banks in Nigeria

Abstract

The study examined the impact of digital banking on the financial performance of deposit money banks in Nigeria from 2013 to 2023. The study anchored on Technology Acceptance Model (TAM), which explains users' acceptance of technology, the independence variable were proxied at Automated Teller Machines (ATM), Point of Sale (POS) systems, and mobile banking to bank financial performance ROA, the research Employed an ex-post facto design to analyze the relationship between digital banking and financial performance using Historical data. Using multiple regression analysis, the research quantified the influence of each digital banking channel on profitability, as measured by Return on Assets (ROA). Findings indicate that mobile banking exerts the strongest positive influence on profitability, followed by ATM transactions, while POS transactions show a modest positive impact. Collectively, digital banking activities account for 81% of the variation in profitability. Based on these findings, the study recommended that banks should expand mobile banking services, optimize ATM placement, and adopt a strategic approach to POS investments to maximize profitability. Furthermore, strengthening digital risk management is essential to sustain customer trust and long-term financial gains.