EFFECT OF FINANCIAL INNOVATIONS ON FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA

Abstract

This study examined the effect of financial innovations on the financial performance of A Deposit Money Banks (DMBs) in Nigeria. Descriptive research design was employed in the study. The population of the study comprised of all the twenty-two DMBs in Nigeria as at 30th June, 2021. Fourteen (14) banks were selected using a simple random sampling technique. Secondary Data was collected from the annual report and accounts of the sampled Banks for the period of five years (2016-2021). Panel regression technique was used to analyze the data. The financial performance of these banks was measured in terms of Return on Equity (ROE) and Earnings per Share (EPS). And the financial products and services were proxied by Mobile Banking (MB) and Automated Teller Machine (ATM). The study found that MB has a negative effect on ROE and ATM has a positive effect on EPS. The study concludes that financial innovations affect the financial performance of DMBs in Nigeria. It is therefore recommended that banks continue to promote the use of MB and ATM as they have the potential of improving performance and reasonable fee to be charged on transactions that will benefit both the banks and customers.