Financial Technology Adoption and Financial Stability of Listed Deposit Money Banks in Nigeria

The rapid diffusion of financial technology (FinTech) across global banking systems has fundamentally altered how deposit money banks (DMBs) generate revenue, manage risk, and deliver value to customers. Nigeria's banking sector, undergoing one of Africa's most consequential digital transformation waves, presents an especially compelling laboratory for examining these dynamics. This study investigates the effect of FinTech adoption on the financial stability of 14 listed deposit money banks in Nigeria over the period 2010 to 2024, employing two complementary measures of financial stability — the Z-score and the non-performing loan (NPL) ratio. Using an ex-post facto research design anchored on balanced panel data and controlling for firm size (FS), firm age (FA), board size (BS), board independence (BI), industry type (INDT), CEO tenure (CEOT), financial leverage (FL), and ownership structure (OS), the study applies fixed effects (FE), random effects (RE), and system generalized method of moments (GMM) estimators. Results reveal that FinTech adoption exerts a statistically significant positive effect on Z-scores (β = 1.912; p < 0.01) and a significant negative effect on NPL ratios (β = −6.712; p < 0.01), robustly confirming that greater digital financial service adoption enhances bank solvency and credit quality. Board independence and institutional ownership concentration also emerge as meaningful governance drivers of stability, while financial leverage consistently threatens it. These findings carry important implications for banking regulators, policymakers, and bank management in Nigeria and comparable emerging economies. The study extends the literature by offering the first long-horizon panel evidence on FinTech-stability dynamics within Nigeria's listed DMB framework, and by integrating governance and structural control variables into a unified analytical model.