The Impact of Automatic Teller Machines On The Cost Efficiency of Nigeria
Banks have intensified their adoption and usage of ATMs as a major e-banking tool to generate substantial contributions to their operations and financial results. Among the expectations of the banks in deploying and usage of ATMs is improving efficiency particularly cost efficiency. There is, however, no clear evidence of banks achieving the desired returns from ATMs investments in the Nigerian banking environment. The broad objective of this study was therefore to analyze the effect of the intensity of ATMs deployment on the cost efficiency of banks in Nigeria. The specific objectives were to ascertain the determinants of ATMs deployment and to evaluate the effect of ATMs deployment on the cost efficiency of Nigerian banks. The study was carried out on twenty two commercial banks post consolidation in which twenty were selected based on purposive and multistage sampling techniques. Secondary data obtained from the five years financial reports and internal operational records of the banks were analyzed using both descriptive and inferential statistical tools. In ascertaining the determinants of ATMs deployment of banks in Nigeria, five factors were considered, these are bank size, bank profitability, salary level, number of banks during period of study and value of ATM transactions. Three of the five variables were found to be significant. These are: bank size, salary level and value of ATM transactions. Also in evaluating the effect of ATMs deployment on the operating cost rate and Asset management rate of banks in Nigeria, four variables were used, number of ATMs as main independent variable and bank size, salary level as well as nonperforming loans being control variables. Number of ATMs, bank size and salary level were found significant. The results showed that bank size, salary level and value of ATM transactions were key determinants of ATMs adoption by banks in Nigeria .The result also revealed that the intensity of ATMs deployment made positive contribution to the cost efficiency of Nigerian banks.
JONATHAN OYERINDE ADEWOYE,NOSA VICTOR OMOREGIE