International Journal of Academic Accounting, Finance & Management Research (IJAAFMR)   Year: 2023 | Volume: 7 | Issue: 4 | Page No.: 63-72 Financial Innovations and Financial Performance of Deposit Money Banks (DMBS) In Nigeria: Ardl Approach Download PDF OKOLIE, Joseph O. Abstract: This study examined the relationship between financial innovations (FIs) and financial performance of deposit money banks (DMBs) in Nigeria, for the periods of 2000-2021 (21years). Specifically, the study examined the effect of measures of financial innovations; Automated Teller Machine (ATM) transactions, Point of Sale (POS) transactions, Internet Banking (INTB) transactions and Mobile Banking (MB) transactions and three control variables; Interest Rate (INTR), Exchange Rate (EXCHR) and Poverty Index (PI) on the financial performance [ROE] of DMBs in Nigeria. The study made used of aggregate secondary data for all DMBs in Nigeria that will be source from CBN Statistical Bulletin, CBN Annual Report, CBN Bank Supervisory Annual Report and Nigeria Deposit Insurance Corporation (NDIC) Annual Reports for the period 2000-2020 and analyzed with Autoregressive distributed lag model having established that the model exhibited mixed integration. The findings revealed that ATM has a significant effect on ROE on the short run and long run. POS has an insignificant effect on ROE; INTB has a p-values (0.8798 and 0.8801) are higher than 5% significant level. This implies that INTB has an insignificant effect on ROE on both on the short run and long run.; MOB has an insignificant effect on ROE on both on the short run and long run; INTR has a significant effect on ROE on the short run and long run; EXCHR has an insignificant effect on ROE on the short run but significant effect on long run while PI has a significant effect on ROE on the short run and long run, though is negative.. Hence, the study concluded that financial innovation does not have significant effect on financial performance of deposit money banks in Nigeria. Therefore recommended that, Investment in financial innovations has been proven to enhance the finance of Nigerian DMBs. The banks should therefore give emphasis to efficient utilization of the financial innovations enabled services such POS, MB, ATM and INTB.