Challenges And Prospests Of Electronic Banking in Commercial Bank Of Ethiopia(A case Pf Jimma Town Branchis)

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.