Information and Communication Technology Costs and Financial Performance of Deposit Money Banks in Nigeria

Abstract

The study focused on information and communication technology costs and financial performance of deposit money banks in Nigeria. Information and communication technology cost was measured using e-technology/communication cost while financial performance was measured using return on asset, return on equity and earnings per share. Ex-post facto was adopted as the research design of the study. The data were collected through secondary source from annual report and account of the selected deposit money banks. The population of the study is made up of 14 listed deposit money banks while the sample size of 10 deposit money banks was derived using purposive sampling based on availability of data. The data collected were analyzed using ordinary least simple regression analysis. The result revealed that information and communication technology cost has a significant effect on return on equity and earnings per share but has no significant effect on return on asset of listed deposit money banks in Nigeria. Based on the findings, the study concludes that information and communication technology cost has the tendency of influencing the financial performance of deposit money banks in Nigeria. Therefore, the study recommends that banks should take more cost-effective steps and more reliable technologies that do not offer loopholes for illegal activities to take place. There should also be more investment in prevention and detection techniques, because banks invest significant sums in the production of these goods. The cost incurred in providing this security should accounted and reported in the financial statement to guide investors on true nature of the company especially in the area of their return on asset.