Effect of Digital Economy on the Nigeria Financial Structure

Abstract

This study examines the effect of digital economy on the Nigeria financial structure. The literature developed was guided by the diffusion of innovation theory and technology acceptance theory. The study adopted exploratory and ex-post facto research designs with the aid of computer based regression analysis. The Nigeria Deposit Insurance Corporation (NDIC) and the National Financial Inclusion Structure were used as source of data to establish the effect of digital economy on the Nigeria financial structure and also the report of the united nation conference on trade and development was used to explain the opportunity and challenges of digital economy. The data used were the number of e-transactions and the value of e-transaction for ATM and Mobile Money in the deposit money banks as proxy for digital economy and also the percentage of loan to deposit of the deposit money banks as proxy for Nigeria financial structure. The test of hypothesis of this study is a null hypothesis. The R-square value is 0.71; it means that the model has successfully predicted the variables. This implies that 71% changes in the loan to deposit of Deposit Money Banks are explained by the changes in the ATM and Mobile Money. The Adjusted R-squared value of 0.43 is positive and not significant; this therefore indicates that there is no strong relationship between digital economy and financial structure of the Nigerian Deposit Money Banks. Finally, the P-value is 0.29, greater than 0.05. Therefore the study conclude that there is no significant relationship between digital economy and financial structure of the Nigerian Deposit Money Banks. In line with the findings of the study, it is recommended that deposit money banks should remove the bottlenecks associated with the use of their automated teller machines and mobile money and strive to meet international best practice. Also, to prevent the evolving digital economy from exacerbating, more concerted efforts should be made to help countries strengthen their readiness to capture the opportunities arising from digitalization. To prevent the evolving digital economy from exacerbating, more concerted efforts should be made to help countries strengthen their readiness to capture the opportunities arising from digitalization.