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June 18, 2026˜The œJournal of developing areas

Financial Innovation and Bank Financial Performance: Further Evidence from Nigerian Deposit Money Banks

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Authors

OPOluseun PasedaOAOlawale AshiruGBGift Balogun

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Overview

Randomized trial reveals digital payment channels affect bank performance in Nigeria, suggesting macro stability is crucial.

Key Points

  • This study aims to examine how different digital financial innovation channels influence the performance of Nigerian banks.
  • Analyzed bank-level panel data from 2012 to mid-2025 covering six digital transaction channels: ATM, POS, WEB, MMO, NEFT, and NIP.
  • Employed a Panel ARDL model to differentiate short-run and long-run effects, using dynamic GMM for estimation.
  • Included macroeconomic factors to assess their impact on bank performance metrics.
  • ATM activity significantly enhances Return on Equity (ROE), while the NIP channel shows marginal positive effects.
  • POS, WEB, MMO, and NEFT provide no robust effects on ROE or ROA, indicating operational inefficiencies in a mature market.
  • Exchange rate stability is identified as a critical macroeconomic factor influencing ROE, attenuating the significance of ATM and NIP.

Cite This Study

Paseda et al. (2026) studied this question.

synapsesocial.com/papers/6a338de8630953a74978ea3ehttps://doi.org/10.1353/jda.2026.a992557
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