Effects of Electronic Banking on Intermediation Efficiency in Nigeria

ABSTRACT          

This study measured the effects of electronic banking products of automated teller machine (ATM), internet banking (IB), point of sale (PoS) and mobile banking (MB) on intermediation efficiency in Nigeria. The study made use of time series data covering the period from 2006 – 2013 from the Central bank of Nigeria. Tests carried out included descriptive statistics, unit root test, cointegration test, correlation test, while stepwise regression analysis was used to develop the relationship model (IE = 103.894 -1.542logIB -12.154logATM + 4.012logMB). The results of the analysis shows that ATM and MB and IB are the e-banking products that have had significant (adjusted R2 = 97.8%) effects on intermediation efficiency (IE)in Nigeria. Furthermore, while the effects of ATM and IB on IE was found to be negative, that of MB was found to be positive. Also, PoSwas found to have no significant effect on intermediation efficiency in Nigeria. The study concluded that e-banking with specific reference to ATM, mobile banking and internet banking have had significant effects on intermediation efficiency in Nigeria, while mobile banking (MB) had not. The study recommends that concerted efforts need to be made by relevant stakeholders to ensure the negative effects of ATM and internet banking on intermediation efficiency in Nigeria is revised to the desired positive effects, as well as ensure that retailers of goods and services increase their level of adoption of PoS as an instrument of ebanking. This can be achieved through increase promotion and awareness creation of e-banking products by banks as well as improvement in the state of power supply and information and communication technology (ICT) skills of bank customers.