Financial Technology versus Financial Performance: Empirical Evidence from the Nigerian Banking Sub-Sector

Maku Affor Owen

Abstract


The Nigerian Banking Industry has witnessed series of revolution as a result of technological innovations which has become a common feature of banking in the contemporary business environment. Critical test for the banking sub-sector has been on how to profitably formulate a new and efficient service delivery means in such a way that its clients will enthusiastically learn to use and trust. On the above premise therefore, the study critically examines the relationship between financial technology and financial performance in Nigeria from 2011Q1 – 2018Q4. Using the Vector Error Correction test approach, this study finds a positive long run relationship between financial technology and financial performance in Nigeria. Automated Teller machines (ATM) exert significant positive effect on Return on Equity while internet banking exerts significant effect on financial performance, however, negatively related. Furthermore, analysis of the short-run dynamics reveals that 40% of the resulting disequilibrium is captured at each period, indicating minimal deviations from the equilibrium. In this regard, it was recommended that appropriate regulatory and macroeconomic policies that will foster the development of the Nigerian banking sub-sector should be pursued by the relevant authority.


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References


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