ASYMMETRIC IMPACT OF FINANCIAL INNOVATION
AND INCLUSIVENESS ON BANKING PERFORMANCE IN
NIGERIA: A NON-LINEAR ARDL APPROACH

The study examined the asymmetric impact of financial innovation and inclusiveness on banking performance in Nigeria, with the objective of investigating the asymmetric relationship between Point of Sale (POS) systems and mobile money on banking performance. Using quarterly data from 2012Q1 to 2022Q4, the study employed the Non-Linear Autoregressive Distributed Lag (NARDL) model, with data sourced from the Central Bank of Nigeria Statistical Bulletin and GlobalEconomy.com (2023). The NARDL results show that, in the long run, ATMs significantly improve banking performance, while POS systems have a weaker positive effect. In the short run, POS remains slightly beneficial, but mobile money negatively impacts performance due to inefficiencies and risks. Despite this, mobile money usage persists under CBN regulations. The Wald test indicates no asymmetry in technological effects, and the error correction term confirms a 34% quarterly adjustment toward equilibrium. Based on these findings, it is recommended that the Central Bank of Nigeria (CBN) encourage collaboration between banks, fintech companies, and regulators to build a secure and efficient digital financial system, and strengthen regulatory oversight and risk management for mobile money and POS systems to enhance banking performance.