EFFECTS OF ATM ADOPTION ON INTERMEDIATION EFFICIENCY IN THE NIGERIAN BANKING INDUSTRY
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Authors: Akintunde Ayeni, Hashimu Bulus, Clement Adewole
Keywords: ATM service, adoption, intermediation efficiency, Nigerian banking industry
Abstract: The deployment and use of electronic banking mechanisms and products has the potential of determining the amount of deposits available in banks for intermediation purposes. This study was carried out to investigate the effect of Automated Teller Machine (ATM) adoption on intermediation efficiency in the Nigerian banking industry, taking interest rate and cash reserve ratio into cognizance as other factors that limits banks’ intermediation. The study considered the period 2007-2016 for all deposit money banks in Nigeria. Regression analysis and Vector Auto Correlation were employed to explore these relationships. The study concludes that ATM adoption has a negative significant impact on intermediation efficiency in Nigeria. It also reviles that the interaction between ATM, CRR and interest rate negatively influences intermediation efficiency in Nigeria. In light of this discovery, the study recommends among others, that the CBN should carry out enlightenment programmes that will educate customers on the numerous benefits accrued to using ATM for making transactions, other than withdrawing cash. If customers effortlessly key into this, cash withdrawals will reduce via the ATM, which could possible make more money retained inside banks for intermediation purposes.