BLOCKCHAIN DISTRIBUTED LEDGER TECHNOLOGY AND FINANCIAL EFFICIENCY OF BANKS IN NIGERIA

Abstract

The Nigerian banking sector plays a critical role in the economy by promoting financial inclusion, enabling transactions, and enhancing capital allocation. However, inefficiencies such as delayed transaction processing, fraud, and inconsistent reporting continue to reduce financial performance. This study investigated the effect of blockchain distributed ledger technology (BDLT) on the financial efficiency of banks in Nigeria. The study adopted a quantitative survey research design and utilized data collected through structured questionnaires administered to respondents selected using purposive sampling, which was justified as appropriate for targeting knowledgeable employees directly involved with banking operations, though this limits generalizability. The regression results showed that the overall models for net profit margin, return on assets, and return on equity were statistically significant (p < 0.05). However, at the individual variable level, reliability significantly influenced net profit margin (p = 0.000); reliability and timeliness significantly influenced return on assets (p = 0.000); but none of the three blockchain qualities transparency, reliability, or timeliness had a statistically significant effect on return on equity. Respondents perceived that blockchain contributes to improved accuracy, real-time transaction processing, and fraud reduction, leading to more efficient banking operations. However, challenges such as regulatory uncertainty and technological readiness still hinder full adoption. The study concludes that qualities of blockchain technology provide practical solutions to improve financial efficiency in Nigerian banks. It recommends banks prioritize blockchain integration to streamline operations, reduce fraud, and enhance reporting transparency. Policy reforms and investment in blockchain infrastructure are also advised to encourage sector-wide adoption and long-term sustainability.