Artificial Intelligence on Banking and Capital Market Sectors in Nigeria

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Authors: KEREMAH SYDNEY CLEVER (Ph.D.) & ELESHO FISAYO

Abstract

This study examines the impact of artificial intelligence on the Nigerian banking sector and capital market, specifically focusing on bank credit mobilized to the private sector and market capitalization. Using two models—one for bank credit mobilization (BCM) and another for market capitalization (MCAP), the study employs the Autoregressive Distributed Lag (ARDL) methodology to analyze the long-run relationships and dynamics between these variables over the period 2009 to 2023. Given the nature of the study, the Cobb-Douglas model was employed to verify the underlying assumptions. The results suggest that labor utilization significantly impacts bank credit mobilization, while technological capacity and AI investments have a relatively smaller influence. For market capitalization, however, none of the variables show significant long-run effects. These findings highlight the need to improve the integration of technology in the financial sector and to develop labor productivity and financial literacy to enhance the effectiveness of financial intermediation and market performance. The study contributes to the literature by providing empirical evidence on the complex interactions among technological advancements, government spending, and financial outcomes in an emerging economy such as Nigeria.

Keywords: Artificial Intelligence, Financial Sector, Capital Market, Government Investment, Technological Capacity

2. 2025 - NIJAF - 17 - 202 KEREMAH & ELESHO.pdf

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