IMPACT OF DIGITAL FINANCIAL SERVICES ON SAVINGS DEVELOPMENT IN NIGERIA

Abstract

This study examines the impact of digital financial services (DFS) on savings development in Nigeria, from 2009 to 2021, using the autoregressive distributed lag (ARDL) method. A phenomenon in the annals of Nigeria’s financial system, is the funding-gap to meeting her development needs, evidenced in rising interest rates, increasing budget deficit, failure of national development plans, etc, which this study attributes to lack of digital savings facilities. The findings revealed that in the long-run, automated teller machine (ATM) has positive effect on total savings (TS) while web transfer (WT), mobile transfer (MT), and point of sales (POS) have negative long[1]run effect on TS. It implies that, in the long-run, ATM may develop savings potency of the saver, perhaps by technological instinct and capacity. The study upholds the technology acceptance theory, that digital technology may develop savings in Nigeria. Based on these findings, the Central Bank of Nigeria needs to create an enabling environment and policies to encourage the innovation of more digital savings platforms to diversify and increase savings. Financial institutions should design user[1]friendly interfaces that could facilitate savings and educate bank service consumers about the benefits of using ATM savings platform. Fiscal incentives should be provided to boost savings via ATM. Further studies on savings development are suggested to apply different methods to test the potency of all digital platforms.