DIGITAL BANKING AND BANKING SECTOR DEVELOPMENT IN NIGERIA

Jeffrey Ogie Eguavoen ¹

Amenze Sandra Airhiavbere ²

Department of Finance, University of Benin, Nigeria ^{1 & 2}

Corresponding Email: jeffreyogie@uniben.edu ¹

Abstract

The study empirically examined the impact of digital banking on banking sector development in Nigeria for the period 2009 to 2023. The specific objectives of the study ware to ascertain whether automated teller machine (ATM), point of sales terminal (POS), internet banking (INTB) and mobile money transfer (MMT) transactions impact on banking sector development (BSD) in Nigeria. The autoregressive distributed lags (ARDL) technique was utilized for the analysis of data and the results demonstrated that, automated teller machine (ATM) has significant negative effect on banking sector development in Nigeria in the short-run; but in the long-run, it failed the 5 percent significant level. Point of sales terminal (POS) transaction has significant positive impact on banking sector development (BSD) in Nigeria in the short-run but does not in the long-run. Internet banking (INTB) transaction has significant negative impact on banking sector development in Nigeria both in the short-run and in the long-run. Mobile money transfer (MMT) transaction is seen not to be significantly related to banking sector development in Nigeria in the short-run as well as in the long-run. The study therefore recommends that, management of banks should continue to ensure that more ATM stands or points where customers can easily withdraw money are provided especially for those who are in hard-to-reach areas. Regular and routine servicing and monitoring of these ATM machines must also be carried out.

Keywords: Digital Banking, Banking Sector Development, Automated Teller Machine, Point of Sales

JEL Classification: G21, Q55.