CASHLESS POLICY AND THE FINANCIAL PERFORMANCE OF BANKS IN NIGERIA

Abstract

The world is transitioning rapidly with many economies already implementing cashless policies to make transaction seamless. It is a lot easier to move from one location to another without having to worry about moving cash around. The innovation has implication on how banks perform. The study aimed to examine the effect of cashless policy on financial performance of commercial banks in Nigeria. The objectives include determining the effect of ATM transactions, NEFT transactions, POS transactions, and e-banking transactions on financial performance of commercial banks in Nigeria. The study was panel in nature, requiring data from the annual reports of top five (5) commercial banks in Nigeria. Data were collected for the period between 2013 and 2020. The study utilized E-Views 10 statistical software for the analysis. The study employed regression to investigate how ATM transactions, NEFT transactions, POS transactions, and E-banking transactions have affected performance. The findings revealed that ATM transactions, NIP transaction, mobile banking transactions, and cheque transaction have significant impact of the performance of commercial banks in Nigeria. Therefore, the study recommended that banks should sponsor training of technical staffs abroad where they can learn and update themselves about modern and advanced technology used in banking system. It was further recommended that bank management should pay more attention on the activities that would improve the ATM services of their banks to increase the ROA of their banks as this would lead to high customer’s satisfaction and patronage.