Financial Technology and Commercial Bank Profitability in Nigeria
This study investigates the impact of financial technology on the profitability of commercial banks in Nigeria, covering the period 2009 to 2024. Profitability was measured using Net Interest Margin (NIM), while financial technology adoption was proxied by Automated Teller Machine (ATM) transactions, Point-of-Sale (POS) transactions, mobile banking applications (MBA), and internet banking (INB). An ex-post facto research design was adopted, relying on quarterly secondary data sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin. The population comprised all 24 licensed commercial banks in Nigeria, ensuring comprehensive sectoral coverage. Data analysis employed the Autoregressive Distributed Lag (ARDL) model, which allowed the estimation of both short-run and long-run relationships between fintech channels and bank profitability. Descriptive statistics were first used to summarize the data, followed by stationarity and co-integration tests to confirm the appropriateness of the ARDL framework. The results revealed that mobile banking exerts a positive and significant influence on bank profitability, underscoring its role as the most profitable fintech channel in Nigeria. Conversely, POS transactions and internet banking had negative significant effects, suggesting that while these channels enhance financial inclusion, they impose costs that reduce bank margins. ATM usage was found to have no significant effect on profitability, reflecting its role as a service infrastructure rather than a profit driver. The findings highlight the differential impact of financial technology adoption on commercial bank profitability. The study concludes that mobile banking remains the strongest driver of profitability, while POS and internet banking require strategic review to minimize margin erosion. Based on these insights, it recommends that banks deepen investment in mobile banking platforms, restructure POS and internet banking pricing models, optimize ATM operations, and pursue innovative strategies that balance customer satisfaction with profitability.
Jack, O. T.-O. (2026). Financial Technology and Commercial Bank Profitability in Nigeria. International Journal of Global Humanities and Management Insights (IJGHMI), 2(2), 1–10. https://doi.org/10.63665/ijghmi-y2f2a006
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