Automated Teller Machine (ATM), Agency Banking and Operational Efficiency of Deposit Money Banks in Nigeria
DOI:
https://doi.org/10.47604/ijfa.3388Keywords:
ATM, Agency Banking, Operational EfficiencyAbstract
Purpose: The rapid advancement in technology is transforming the financial sector, positioning ATMs and agency banking as crucial innovations that significantly enhance the accessibility and efficiency of banking services. This study investigates the impact of Automated Teller Machines (ATMs) and agency banking on the operational efficiency of deposit money banks in Nigeria. The study objective was to assess the influence of Automated Teller Machines (ATMs) and agency banking on operational efficiency.
Methodology: Utilizing an ex post facto research design, the study sampled ten deposit money banks listed on the Nigerian Exchange Group (NGX) as of 31 December 2023. Secondary data were collected from the Nigeria Inter-Bank Settlement System Plc, Central Bank of Nigeria statistical bulletins, and annual reports of the selected banks for the period of 2009 - 2023. Descriptive and inferential statistical techniques, including correlation and panel regression analysis were used to analyze the effect of ATM and agency banking on operational efficiency.
Findings: The findings revealed that ATM usage has a significant positive effect on operational efficiency. Agency banking, measured through Point of Sale (POS) systems, also exhibited statistically significant effect on operational efficiency. The study concluded that technological advancements, particularly in the form of ATMs and agency banking, significantly contribute to the operational efficiency of banks in Nigeria.
Unique Contribution to Theory, Practice and Policy: The study recommended that DBMs in Nigeria should continue investing in digital banking innovations to enhance performance and maintain competitiveness.
Downloads
References
Abdullai & Nyaoga (2017). Effect of Automated Teller Machines Usage on Operational Performance of Commercial Banks in Nakuru County, Kenya. International Journal of Economics, Finance and Management Sciences. 5(3), 162-167. http://dx.doi.org/10.11648/j.ijefm.20170503.14
Munyengabe & Gabriel (2018). Agency Banking and Accessibility to Financial Services: A Survey of Commercial Banks in the Northern Province of Rwanda. International Journal of Innovative Research and Development. 7(7) 397-411. http://dx.doi.org/10.24940/ijird/2018/v7/i7/JUL18118
Adepoju & Mohammed. (2010). Challenges of Automated Teller Machine (ATM) Usage and Fraud Occurrences in Nigeria–A Case Study of Selected Banks in Minna Metropolis. Journal of Internet Banking and Commerce 15(2) 1-10 Retrieved From; https://www.researchgate.net/publication/228464353.
Adewale, A., Isiaka, M., & Oluwaseun, F. (2022). Digital banking trends in Nigeria: An overview. Journal of African Banking and Finance, 15(2), 78-95.
Adesina, O. (2023). Financial inclusion through digital banking: Prospects and challenges in Nigeria. African Development Review, 35(1), 112-128.
Adewoye, J. O., & Omoregie, N. V. (2013). The impact of automatic teller machines on the cost efficiency of Nigeria. Journal of Internet Banking and Commerce, 18(3), 1-21. https://www.icommercecentral.com/open-access/the-impact-of-automatic-teller-machines-on-the-cost-efficiency-of-nigeria.php?aid=38253.
Agwu, Edwin. (2018). The Role of E-Banking on Operational Efficiency of Banks in Nigeria. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3122498.
Agu et al (2016). Challenges of Sustainability of Agency Banking in Nigeria : A Study of Selected Commercial Banks. NG-Journal of Social Development. 5. 106-120. https://doi.org/10.12816/0033110
Agyemang et al (2023). Environmental accounting and performance: empirical evidence from China. Environment, Development and Sustainability. 26. https://doi.org/10.1007/s10668-022-02853-y
Ahaiwe (2021) The Effect of Automated Teller Machines on Banks’ Services in Nigeria International Journal of Development and Management Review 6 96-107
Anifowose & Ekperiware (2022). The effect of automated teller machines, point of sale terminals and online banking transactions on economic growth in Nigeria. Open Access Research Journal of Science and Technology. 4. 016-033. http://dx.doi.org/10.53022/oarjst.2022.4.2.0024.
Ayadi, O. F., Oke, B., Oladimeji, A., & Aladejebi, O. (2023). Agency banking in Nigeria: impact and impediments. SEDME (Small Enterprises Development, Management & Extension Journal), 50(3), 227-247. https://doi.org/10.1177/09708464231195916.
Ayegbeni, U. D. (2020). Agent banking and financial inclusion in Nigeria: challenges and prospects. International Journal of Banking and Finance Research, 6(1), 32-42. https://www.iiardjournals.org/abstract.php?j=IJBFR&pn=Agent+Banking+and+Financial+Inclusion+in+Nigeria%26colon%3B+Challenges+and+Prospects&id=2210.
Ayo, C. K., Oni, A. A., Adewoye, O. J., & Eweoya, I. O. (2016). E-banking users' behaviour: e-service quality, attitude, and customer satisfaction. International Journal of Bank Marketing, 34(3), 347-367.
Bagozzi, Richard. (2007). The Legacy of the Technology Acceptance Model and a Proposal for a Paradigm Shift. J. AIS. 8. https://doi.org/10.17705/1jais.00122
Bankole et al (2011). Mobile Banking Adoption in Nigeria.47(2)1-23 The Electronic Journal on Information Systems in Developing Countries https://doi.org/10.1002/j.1681-4835.2011.tb00330.x.
Bello, A. I., Ladan, S. S., & Ibrahim, M. (2024). Factors that determine agency banking adoption in the Nigerian banking industry. UMYU Journal of Accounting and Finance Research, 6(1), 56-69. https://doi.org/10.61143/umyu-jafr.6(1)2024.005.
Berger & Humphrey (1997). Efficiency of financial institutions: International survey and directions for future research. European Journal of Operational Research, 98(2), 175-212.
Central Bank of Nigeria (CBN) (2013). Guidelines for the regulation of agent banking and agent banking relationships in Nigeria. Abuja: CBN. Retrieved from: https://www.cbn.gov.ng/out/2013/ccd/guidelines%20for%20the%20regulation%20of%20 agent%20banking%20and%20agent%20banking%20relationships%20in%20nigeria.pdf.
Chude & Chude (2014). Impact of agent banking on performance of deposit money banks in Nigeria. Research Journal of Finance and Accounting, 5(9), 35-42.Retrieved from: https://www.iiste.org/Journals/index.php/RJFA/article/view/13034
Chukwuekwu. (2024). The Effect of Electronic Banking on the Performance of Deposit Money Banks Listed in Nigeria. Journal of Business and Econometrics Studies. 1 (3)1-10 . https://doi.org/10.61440/JBES.2024.v1.28.
Dotun & Adesugba (2022). The Impact of Agency Banking on Financial Performance of Listed Deposit Money Banks in Nigeria. Journal of Corporate Finance Management and Banking System. 2. 14-24. https://doi.org/10.55529/jcfmbs25.14.24
Dulacha et al (2024). The effect of agency convenience on financial performance of commercial banks in Isiolo County, Kenya. The Strategic Journal of Business & Change Management, 11 (3), 352 – 360. http://dx.doi.org/10.61426/sjbcm.v11i3.3029
Eze & Chukwu (2023). Regulatory challenges in Nigeria's digital banking landscape. Journal of Banking Regulation, 24(2), 156-173.
Eze et al (2019). Factors Limiting the Full-scale Adoption of Process and Product Innovation inthe Nigerian Construction Industry. SEISENSE Journal of Management. 2. 67-81. https://doi.org/10.33215/sjom.v2i3.145
Glater, J. D., & Swoboda, F. (1995). Taking a bite out of bank jobs. In the quest for convenience and lower costs, ATMs eat into services provided by tellers. The Washington Post, July 10, F1.
Gololo, Ibrahim. (2018). Challenges of the Nigerian Banking Sector and the Way Forward. American Finance & Banking Review. 3. 26-34. https://doi.org/10.46281/amfbr.v3i1.216.
Greenhalgh et al (2004). Diffusion Of Innovations In Service Organizations: SystematicReview and Recommendations. The Milbank quarterly. 82. 581-629. https://doi.org/10.1111/j.088378X.2004.00325.x
Guerrero Escamilla & Vargas (2021). Cross-Sectional and Time Series Data as the Basis for Panel Modelling: The Case of Kidnappings in México from 2010 to 2019. International Journal of Statistics and Probability. https://doi.org/10.68https://doi.org/10.5539/ijsp.v10n2p68.
Halaby, Charles. (2004). Panel Models in Sociological Research: Theory Into Practice. Annual Review of Sociology. 30. 507-544. https://doi.org10.1146/annurev.soc.30.012703.110629
Imam et al (2024). Factors that determine agency banking adoption in the Nigerian banking industry. UMYU Journal of Accounting and Finance Research, 6(1),56-69 https://doi.org/10.61143/umyu-jafr.6(1)2024.005.
Iwedi, Marshal. (2024). Digital Banking Technology and the Operational Efficiency of Banks in Nigeria. African Banking and Finance Review Journal 14(14) 1-13 Retrieved from: https://www.researchgate.net/publication/383000255
Jegede. (2014). Effects of Automated Teller Machine on the Performance of Nigerian Banks. American Journal of Applied Mathematics and Statistics. 2. 40-46. http://dx.doi.org/10.12691/ajams-2-1-7.
Katarzyna, Stapor (2020). Descriptive and Inferential Statistics. https://doi.org/10.1007/978-3-030-45799-0_2
Kazeem, Bayonle (2022). The Effect of Agency Banking Services on Customers' Satisfaction in Nigeria. Journal Of Management Sciences, 4(3) 206-214. Retrieved From: https://www.researchgate.net/publication/362417825
Lockett et al (2009). The Development of the Resource-Based View of the Firm: A Critical Appraisal. International Journal of Management Reviews. 11. 9 - 28. https://doi.org/10.1111/j.1468-2370.2008.00252.x.
Lottu et al (2023). Digital Transformation in Banking: A Review of Nigeria's Journey to Economic Prosperity. International Journal of Advanced Economics,5(8), 215238. https://doi.org/10.51594/ijae.v5i8.572
Murinde et al. (2022). The impact of the FinTech revolution on the future of banking: Opportunities and risks. International Review of Financial Analysis,81,102103. https://doi.org/10.1016/j.irfa.2022.102103
Mwando Sammy (2013) Contribution Of Agency Banking On Financial Performance Of Commercial Banks In Kenya. Journal of Economics and Sustainable Development 4(20) 26-34. Retrieved from: https://www.iiste.org/Journals/index.php/JEDS/article/view/9805/10010
Mostafa Jafari & Fatemeh Rezaee (2014). The effect of resource based view on sustainable capability advantage. Management Science Letters. 4. 2537-2554. https://doi.org/10.5267/j.msl.2014.11.002.
Nigatu, Belete & Habtie (2023). Effects of automated teller machine service quality on customer satisfaction: Evidence from commercial bank of Ethiopia. Heliyon, 9(8)1-12 https://doi.org/10.1016/j.heliyon.2023.e19132
Odumusor, Sackey & Emmanuel (2024). Financial Inclusion and its Effect on Economic Growth in Nigeria. Eternal Scientific Publications 3(2), 231-244. https://doi.org/10.56472/25835238/IRJEMS-V3I2P129
Ogbebor, T. O. (2014). Enhancing Financial Inclusion in Nigeria through Agent Banking; Benefits, Prospects, and Challenges. African Journal of Microfinance and Enterprise Development, 4(2), 22-47.
Oino, I. (2018). Impact of digital banking on operational efficiency of commercial banks in Kenya. International Journal of Finance and Accounting, 3(1), 19-40.
Oluwaseyi, F. (2023). Towards a comprehensive framework for digital banking in Nigeria. African Journal of Science, Technology, Innovation and Development, 15(3), 301-315.
Okonkwo & Igwe (2023). Adoption of mobile banking in Nigeria: A survey of urban and rural users. Technology in Society, 72, 101901.
Osahenvemwen & Iroh (2021). ATM usage Optimization Framework for rural Areas in Nigeria. International Journal of Computer Science and Telecommunications 7(7) Retrieved from: https://www.researchgate.net/publication/357406667
Otonne, A., & Ige, O. T. (2023). Exploring the influence of financial technology on banking services in Nigeria. International Journal of Financial, Accounting, and Management, 5(3), 323-341. https://doi.org/10.35912/ijfam.v5i3.1513.
Oyelade, A. (2019). The Impact Of Firm Size On Firms Performance In Nigeria: A Comparative Study Of Selected Firms In The Building Industry In Nigeria. AESS Publications, 7(1),19 https://doi.org/10.18488/journal.107.2019.71.1.9.
Rabiu et al (2019). Impact of E-banking on the Operational Efficiency of Banks in Nigeria. International Journal of Academic Research in Business and Social Sciences. 9(2) 136145 https://doi.org/10.6007/IJARBSS/v9-i2/5527.
Rondan-Cataluña et al (2015). A comparison of the different versions of popular technology acceptance models: A non-linear perspective. Kybernetes. 44(5) 788-805. https://doi.org/10.1108/K-09-2014-0184.
Sekaran, U. & Bougie, Roger. (2009). Research Methods for Business: A Skill Building Approach (5th Edition). International Journal of Information Technology and Management - IJITM.
Sporta & Muganda (2021). Effects of agency banking on operational efficiency of commercial banks in Kenya. International Research Journal, 2(2), 450-460. Retrieved from: https://www.irjp.org
Umar, H. J., Isah, A., & Nuhu, A. (2024). Factors determining agent banking service acceptance among rural entrepreneurs in Adamawa State. Journal of Business Development and Management Research. 3(7), 93-117. https://africanscholarpub.com/ajbdmr/article/view/122
Venkatesh, Viswanath & Davis, Fred. (2000). A Theoretical Extension of the Technology Acceptance Model: Four Longitudinal Field Studies. Management Science. 46. 186-204. https://doi.org/10.1287/mnsc.46.2.186.11926.
World Bank. (2022). Digital Financial Services. Retrieved from https://www.worldbank.org/en/topic/financialinclusion/brief/digital-financial-services
Zayyanu et al (2022). Effect of Payments System Innovations on the Financial Performance of Commercial Banks in Nigeria. Journal of Service Science and Management. 15. 35-53. https://doi.org/10.4236/jssm.2022.151004.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 UCHENNA, Clems Ozegbe, Prof. UWALEKE, Uchenna Joseph, Dr. ACHEMA, Friday, OTIKO, Ugochukwu Nnamdi, SATUMARI, Abdulaziz Samaila, OKOLIE, Franklin Chukwueloke
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
