Abstract:
Despite the growth of e-banking adoption worldwide, Ethiopian banks continue to conduct
most of their banking transactions using traditional methods. The purpose of this study is to
examine adoption of E-banking in the commercial bank of Ethiopian banking industry with
respect to the challenges which can influence firms from taking advantage of E-banking
system and expected opportunity derived by adopting the system. The research framework
developed based on technology-organization environment model (TOE).The study used
explanatory research approaches to gather data from a total of 154 employees. The study
targeted a selected Jimma town branch including the district with total population of 250
from which 154 were selected using simple random sampling. Data from the respondents
were collected using questionnaire. The result of the study indicated that, the major barriers
Ethiopian banking industry faces in the adoption of Electronic banking are: security risk,
lack of trust, lack of legal and regulatory frame work, Lack of ICT infrastructure and absence
of competition between local and foreign banks. The study suggests a series of measures
which could be taken by the banking industry and by government to address various
challenges identified. These measures include: Establishing a clear set of legal framework on
the use of technology in banking industry, supporting banking industry by investing on ICT
infrastructure and banks needs to be focused on technological innovation competition rather
than traditional bases of retail bank competition.
