Barriers, Risks, and Critical Success Factors of Digital Transformation Initiatives on Organisational Performance in the Nigerian Banking Industry

This study examines the barriers, risks, and critical success factors (CSFs) of digital transformation (DT) initiatives and their relationship with organisational performance across Nigerian deposit money banks (DMBs). The investigation adopts a dual-strand methodology combining an integrative systematic review, reported in strict alignment with the PRISMA 2020 framework, with descriptive financial analyses of seven listed commercial banks over the 2019–2024 financial quinquennium, complemented by aggregate clearing and settlement metrics from the Nigeria Inter-Bank Settlement System (NIBSS). Systematic literature searches across public repositories and citation reference tracking yielded 35 records, of which 16 met the defined eligibility criteria and were synthesised. Cybersecurity was identified as the predominant operational and strategic risk (4 of 16 studies; 25.0%), whilst robust cybersecurity frameworks and modernised technology/digital infrastructure constituted the most prominent CSFs (4 of 16 studies each; 25.0%). Human and cultural barriers represented the most frequently identified impediment (3 of 16 studies; 18.8%), followed closely by infrastructural and technological constraints (2 of 16 studies; 12.5%). Among the six empirical studies examining financial outcomes, two established positive and statistically significant associations with return on assets (ROA), one documented mixed outcomes varying by payment channel, one observed an insignificant effect, and two did not report confirmed directional estimates. Across five banks with continuous longitudinal disclosures, mean ROA rose from 2.48% in 2019 to 3.48% in 2024. However, because this interval was marked by acute macroeconomic shocks, including substantial naira devaluations, elevated inflation, and foreign exchange (FX) revaluation gains, this profitability growth cannot be causally attributed to digital transformation on available evidence. The study recommends that the Central Bank of Nigeria (CBN) institute a regulatory sandbox conditioned upon stringent cybersecurity prerequisites, issue cyber-resilience benchmarks, and mandate disaggregated reporting of foreign exchange revaluation gains versus core operational earnings.