Theoretical Review on the Application of Technological Innovation to Banking Performance in Nigeria (Published)
This study provides a concise theoretical review of technological innovation and its implications for bank performance in Nigeria. It synthesizes four dominant frameworks Innovation Diffusion Theory (IDT), Technology Acceptance Model (TAM), Disruptive Innovation Theory, and the Unified Theory of Acceptance and Use of Technology (UTAUT) to explain how digital transformation influences banking outcomes in an emerging economy. The Nigerian banking sector has experienced rapid technological advancement through mobile banking, internet banking, automated teller machines (ATMs), artificial intelligence applications, agent banking, and fintech-driven platforms, which have collectively reshaped service delivery, operational efficiency, financial inclusion, and competitive dynamics. The review shows that IDT explains how banking technologies spread across different user categories based on perceived advantages, compatibility, simplicity, trialability, and observability. TAM emphasizes perceived usefulness and perceived ease of use as central determinants of technology acceptance, which directly affect customer satisfaction, employee efficiency, and institutional performance. Disruptive Innovation Theory highlights how fintech entrants and digital platforms disrupt traditional banking structures, compelling incumbents to adapt or risk losing market relevance. UTAUT integrates key behavioral drivers’ performance expectancy, effort expectancy, social influence, and facilitating conditions to explain both intention and actual usage of banking technologies. Findings indicate that technological innovation enhances bank performance through faster service delivery, cost reduction, improved customer experience, higher profitability, and expanded financial inclusion. However, these outcomes are moderated by infrastructural deficiencies, cybersecurity risks, regulatory constraints, digital literacy gaps, and varying levels of customer trust. The study concludes that technological innovation is central to sustainable competitiveness in Nigeria’s banking sector, but its impact depends on the interaction between technology, users, and institutional environment. By integrating multiple theories, the study offers a robust conceptual foundation for understanding innovation-driven banking performance and provides guidance for researchers, practitioners, and policymakers.
Keywords: Artificial Intelligence, Digital, Financial literacy, Innovation, banking technologies