EFFECT OF INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) SOFTWARE EXPENDITURE ON FINANCIAL PERFORMANCE AMONG LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

This study examines the effect of Information and communication technology (ICT) software expenditure on financial performance among listed deposit money banks in Nigeria. Employing a quantitative research design, the study systematically assesses financial variables to identify causal relationships between ICT software and financial performance. Secondary data was drawn from annual reports and financial statements of listed deposit money banks in Nigeria. The research is grounded in positivism, focusing on objectivity and empirical validation. The study uses purposive sampling to select banks meeting the criteria of having complete and reliable data for the study. Stata 15.0 and purposive sampling techniques, a non-probability sampling technique where participants are selected based on pre-defined characteristics or criteria relevant to the research question. The findings suggest computer software investment has a negative and significant effect on financial performance in Nigerian deposit money banks (DMBs) due to its high cost of investment, maintenance and risk associations. However, liquidity has a positive and significant effect on financial performance. On the other hand, Leverage does not significantly affect financial performance. The study concludes that computer software costs negatively affect financial performance in Nigerian deposit money banks (DMBs), reflecting the significant initial investments required. In contrast, higher liquidity positively impacts financial performance, emphasizing the importance of maintaining strong liquid assets for short-term obligations and opportunities. Leverage does not significantly affect profitability, suggesting debt levels do not consistently influence financial performance. The study recommends that DMBs strategically manage software investments, carefully assessing costs and returns to avoid harming short-term profits. Additionally, banks should prioritize liquidity management while optimizing capital structures without over-reliance on leverage for financial performance.