Relationship between digital finance technology and profitability in Nepalese commercial banks

Abstract

This study examines the relationship between digital finance technology and profitability in Nepalese commercial banks. The selected independent variables are ATM networks, mobile banking, internet banking, digital wallet, digital lending and point of sales. The profitability of banks is selected as a dependent variable. The primary source of data is used to assess the opinions of the respondents regarding digital finance technology and profitability in Nepalese commercial banks. The study is based on primary data which were collected from 125 respondents. To achieve the purpose of the study, a structured questionnaire is prepared. Regression models are estimated to test the significance and importance of digital finance technology on the profitability in Nepalese commercial banks. The result shows that ATM network has a positive impact on profitability of banks. It indicates that the increase in ATM networks of commercial banks leads to an increase in profitability of banks. Similarly, internet banking has a positive impact on profitability of banks. It indicates that the increase in use of internet banking of commercial banks leads to an increase in profitability of banks. Likewise, mobile banking has a positive impact on profitability of banks. It indicates that better mobile banking facilities of commercial banks lead to an increase in profitability of banks. In addition, digital wallets have a positive impact on profitability of banks. It indicates that better digital wallets lead to an increase in profitability of banks. Further, digital lending has a positive impact profitability of banks. It indicates that the increase in digital lending provided by commercial banks leads to an increase in profitability of banks. Moreover, the point of sale has a positive impact on profitability of banks. It indicates that the better point of sale technology of commercial banks leads to an increase in profitability of banks.