Technology Investment and Sustainable Growth of Listed Deposit Money Banks in Nigeria

Abstract

The study examined the effect of technology investment on sustainable growth of listed deposit money banks in Nigeria. The specific objectives was to analyze the effect of technology expense ratio, digitalization rate, IT infrastructure investment, technology adoption rate and innovation rate on sustainable growth of listed deposit money banks in Nigeria. Ex post facto design was adopted in the study. All the thirteen listed deposit money banks made up the study population. The sample size comprised eleven listed deposit money banks in Nigeria after removing Jaiz bank and Unity bank that were yet to publish their 2024 annual reports as at the time this study was being reported. Secondary data used in the study were sourced from the banks’ annual reports from 2015 to 2024. Descriptive analysis was done in addition to test of correlation, test of multicollinearity, heteroskedasticity test, test of autocorrelation, linearity test, and test of cross-sectional dependence. The Panel Estimated Generalised Least Squares was used to test the hypotheses. It was found that: technology expense ratio has a positive and significant effect on sustainable growth of listed deposit money banks in Nigeria (β = 0.4678, p = 0.0000); digitalization rate has a negative but non-significant effect on sustainable growth of listed deposit money banks in Nigeria (β = –0.0000095, p = 0.4961); IT infrastructure investment has a positive and significant effect on sustainable growth of listed deposit money banks in Nigeria (β = 3.7324, p = 0.0000); technology adoption rate has a negative and significant effect on sustainable growth of listed deposit money banks in Nigeria (β = –0.1614, p = 0.0000); innovation rate has a negative and significant effect on sustainable growth of listed deposit money banks in Nigeria (β = –0.8429, p = 0.0000). In conclusion, the mere presence of technological initiatives or increased expenditure does not automatically translate into sustainable growth, instead, the effectiveness of technology investment appears to hinge on strategic alignment, proper implementation, and value optimization. The study recommends that bank executives of listed deposit money banks in Nigeria should ensure consistent and well-structured investment in technological operations, as well as allocate sufficient resources to maintain and upgrade technological systems in order to strengthen operational efficiency, enhance service quality, and ensure that technology spending translates into measurable long-term financial benefits.