Challenges and Opportunities of Electronic Banking Services: Evidence From Private Banks in Jimma Town

Abstract

This study aims to identify the challenges and opportunities of E-banking services in Ethiopian Banking industry. Population of the study consist of all 16 private commercial banks that have been in operation. The study was conducted based on the data gathered from four private banks (Dashen Bank S.C., Nib International Bank S.C., United Bank S.C. and Wegagen Bank S.C) which are currently in operation. Stratified random sampling method was employed to draw the sample from the population. A mixed research approach and descriptive research design was employed to answer the research questions. A research framework developed based on technology-organization -environment model (TOE) developed by Tornatzky and Fleischer. The study statistically analyzed data obtained from the survey questionnaire. Data was presented through frequency, percentage, mean and standard deviation. The result of the study indicated that, the major challenges Ethiopian banking industry faces in the adoption and development of E-banking technology are; dynamic change in information technology, network failure, lack of customer awareness with E-banking, unability to withdraw large amount of money, absence financial networks that links different banks, electric power interruption, lack of confidence with security and trust, lack of suffient government support and cost of implemention. The study identified the operationla and services benefits from adopting and developing of E-banking technology such as increase speed and efficiency, improve customer satisfaction, reduce paper work and create better relation between bank and clients. The study also indicated existing opportunities for E-banking adoption and growth such as improve in the banking habit of the society, increasing customer attitude from time to time, commitment of government to strengthen the bank and to facilitate ICT infrastructure. In addition the study also identify positive attitude of customer with e-banking such as E-banking technology helps customer for quickly access account, reduces time spending in the bank, for better managing of financial transaction, for the best means to reduce customer loading burden and other services. The study recommended banks to facilitate proper and continuous training for their employees, increasing security for E-banking products, create deep awareness about E-banking technology to the community while the government should support banking sector by facilitating sufficient ICT infrastructure development and issue clear and workable legal frameworks to ease the adoption and growth of E-banking Technology in Ethiopia.