THE IMPACT OF NIGERIA’S CASHLESS POLICY ON BANKING SECTOR TRANSFORMATION AND ECONOMIC DEVELOPMENT

Abstract

This study investigates the impact of the Central Bank of Nigeria’s cashless policy on the development of the banking sector, with particular emphasis on transaction volumes and costs, financial inclusion, reduction of financial crimes, and customer satisfaction. Drawing on survey data from 200 banking customers across Nigeria and employing regression analysis, the findings reveal that the cashless policy has significantly increased the volume of digital transactions while reducing costs, thereby improving efficiency. It has also broadened access to financial services, particularly for previously underserved populations, and contributed to enhanced trust and inclusion in the formal financial system. Furthermore, the adoption of digital transactions has deterred traditional cash-related crimes by enhancing traceability, although risks of cyber fraud remain. Importantly, the study finds that customer satisfaction and service delivery have improved as banks adapted to digital reforms, reflecting progress toward a more responsive and efficient banking system. The results underscore the need for complementary investments in digital infrastructure, cybersecurity frameworks, and financial literacy programs to ensure the sustainability of cashless reforms and their inclusive contribution to Nigeria’s economic development.