Digital Banking Services and Customer Retention Among Deposit Money Banks in Nigeria

The spread of financial technology has completely redefined the service delivery architecture of deposit money banks (DMBs) in Nigeria, and has consequently redefined the way in which these banks engage and serve their customers. In the present study, the researchers analyze the impact of five different dimensions of digital banking namely: digital banking mobile banking, internet banking, ATM services, USSD banking and digital payment platforms on customer retention among DMBs in Nigeria. This study is based on the theoretical framework of the Technology Acceptance Model (TAM) and the Expectation-Confirmation Model (ECM) and uses cross sectional survey approach with 385 active bank customers in Lagos, Abuja and Kano. The data were analyzed by hierarchical multiple regression analysis using IBM SPSS 26 software and structural equation modelling (SEM) using IBM AMOS 26 software. The results indicate that mobile banking, internet banking and digital payment platforms all positively and significantly influence customer retention (β = 0.312, p < 0.001; β = 0.241, p < 0.001; β = 0.198, p < 0.01, respectively). However, ATM services (β = 0.089) and USSD banking (β = 0.074) have directionally positive but statistically insignificant coefficients. The overall model explains 61.4% of the variation in retention (R² = 0.614). Banks thus need to regard ATM uptime and USSD reliability as a floor for retention. Deposit money banks are encouraged to invest strategically in mobile app development, cyber security infrastructure and further digital payment services to maintain competitive retention benefits.