Would Digitalization Project Impact Corporate Resilience? An Evaluation of the Nigeria Deposit Money Bank (DMB)

Abstract

This paper examined whether digitalization of key functional units, product and service offerings by Nigeria deposit money banks (DMB) could stymie the steaming competition from Fintech startup firms. Four key bank performance indexes (KPI): - customer deposit, loan & advances to customer, asset under management and operational expense were isolated. Eight Nigeria deposit money banks (DMB) were randomly selected and designated either as, “highly or “less digitalized”. The four selected bank key performance index (KPI), were tested, using rate (%) of change on a pair of a “highly and a less digitalized” bank. The highly digitalized bank proxied Fintech startup firms while the less digitalized are the normal banking firms. The results produced significant difference in favour of the less digitalized normal banks. In all the cases statistically analyzed, the less digitalized banks out performed, in all four key bank KPI, the highly digitalized Fintech startup firms. Our findings denied the much-orchestrated Fintech startup firms outperforming ordinary banks in the financial services market. Conclusively - excessive technological deployment adds tittle or nothing to banks’ performance: revenue generations, competitive stamina and even resilience. Agbaje of Guaranty trust bank (G. T Bank) was right; “…. dominating the market is beyond just acquiring the best of technology.” Fintech startup firms are no threat to the brick-and-mortar model.

Keywords: Fintech, digitalization, customer deposits, asset, loan & advances, ecosystem.

DOI: 10.7176/EJBM/13-24-06

Publication date: December 31^st 2021