Effect of Electronic Banking Channels on Commercial Banks’ Liquidity in Nigeria

Charles Ifeanyi Anumaka, Felicia Nonye Egbeh, Deborah Ngozi Umah and Adesegun Nurudeen Osijirin
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Charles Ifeanyi Anumaka: Department of Healthcare Management, Federal University of Allied Health Sciences, Enugu, Nigeria.
Felicia Nonye Egbeh: Department of Healthcare Management, Federal University of Allied Health Sciences, Enugu, Nigeria.
Deborah Ngozi Umah: Department of Healthcare Management, Federal University of Allied Health Sciences, Enugu, Nigeria.
Adesegun Nurudeen Osijirin: Department of Healthcare Management, Federal University of Allied Health Sciences, Enugu, Nigeria.

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Abstract: Advances in information and communication technology and globalisation have encouraged Nigerian banks to adopt electronic banking services, including automated teller machines, mobile banking and internet banking. These innovations have improved service delivery, but they may also create liquidity risks when not properly managed. This study examined the relationship between electronic banking channels and commercial banks' liquidity in Nigeria. Time-series data obtained from the Central Bank of Nigeria Statistical Bulletin, covering the period 2009–2021, were used. The liquidity ratio was adopted as the dependent variable for measuring banks' stability, while automated teller machine transactions, point-of-sale transactions, mobile banking, web banking and electronic banking penetration rate served as the explanatory variables. The electronic banking penetration rate was introduced as an intervening variable. The data were subjected to preliminary tests, including unit-root analysis, which indicated a mixed order of integration. Consequently, the model parameters were estimated using the Autoregressive Distributed Lag and error-correction procedures with EViews version 10.0. The findings revealed significant short- and long-run relationships between electronic banking channels and commercial banks' liquidity in Nigeria. In the short run, mobile banking, internet banking and electronic banking penetration rate increased banks' liquidity ratio, whereas automated teller machine and point-of-sale transactions reduced it. The study concludes that electronic banking has contributed significantly to the liquidity performance of commercial banks in Nigeria.

Date: 2026-07-01
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Published in Journal of Economics, Management and Trade, 2026, 32 (6), pp.126-151

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05682807

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