Electronic Banking And The Performance Of Commercial Banks: Evidence In Nigeria
Daniel Dornubari Sunday
Nigeria Maritime University, Delta State
Ernest Okwudili Chime
University of Port Harcourt, Rivers State.
Keywords: ATM, IDT, Banks, Web pay, Performance
Abstract
This paper investigated electronic banking and the performance of commercial banks in Nigeria from the first quarter of 2009 to the fourth quarter of 2018. The specific objectives of this study is to examine the relationship between electronic banking (automated teller machine, point of sale service, web pay and mobile pay) on the net interest margin of commercial banks in Nigeria; and to determine the direction of causality between electronic banking (automated teller machine, point of sale service, web pay and mobile pay) on the net interest margin of commercial banks in Nigeria. The statistical techniques used include selected diagnostics tests, ordinary least square, Granger Casualty techniques, Johansen co-integration test, and vector error correction model tested at 5% level of significance. The result of the study showed that in the short run automated teller machine was positively and statistically significant to net interest margin, point of sale and web pay were negatively and statistically not significant to net interest margin whereas mobile pay was positively and not statistically significant to net interest margin; in the long run web pay and mobile pay were positively and statistically significant to net interest margin. Also, causality does not move from automated teller machine, web pay and mobile pay to net interest margin and vice versa, but there is unidirectional causality from net interest margin to point of sale service and not vice versa. We concluded that electronic banking affects the performance of commercial banks in Nigeria. Therefore, on recommendation there should be massive awareness on the part of commercial banks on the advantages to be derived by customers on the use of point of sale services as designated point such as supermarkets, petrol stations, fast foods and cinemas etc. and mobile pay.