Impact of Information and Communication Technology on the Performance of Deposit Money Banks in Nigeria

Abstract

This study was carried out with the purpose of determining if the use of information and communication technology such as ATM, POS, MM, WP and IBT in the Nigerian banking system has had a significant impact on the performance of deposit money banks in Nigeria and to analyze whether ICT usage can sustain performance of deposit money banks in the long run. Return on equity is good proxy for measuring bank performance. The ordinary least square (OLS) multiple regression model was used to estimate the variables, the scatter diagram was plotted to determine whether the structural model is linear or non-linear. The log-linear regression model was used to test the impact of various forms of information and communication technology on the banks return on equity (ROE), the computation of the result was done using the econometric computer software package, e-view version 7.0. The result shows that the adoption of various forms of information and communication technology has greatly influenced the quality of banking operations, performance and has specifically increased banks return on equity and information and communication technology usage can sustain returns on equity of deposit money banks in the long run. The study recommends that investment in information and communication technology should form an important component in the overall strategy of banking operation, as these will make Nigerian banks to be efficient, profitable, and competitive, the banks should therefore give emphasis to efficient utilization of the information and communication technology enabled services, and should also partner with the government to make internet connectivity cheap and accessible.