FACTORS AFFECTING CUSTOMERS’ INTENTION TO ADOPT ATM BANKING SYSTEM IN ETHIOPIA

Abstract

The aim of this paper is to examine the factors affecting customers’ intention to adopt ATM banking system in Ethiopian banking industry, the case of Addis Ababa city. The study applied mixed research design and collect data through the use of primary and secondary data sources. The primary data source involved through the use of questionnaire and interview. The secondary data was obtained from reviewing journals and literature relevant to the subject matter of this research. The target population for the study was among the head office customers of seventeen commercial banks located in Addis Ababa. The study was undertaken on 385 customers and used the simple and multiple regressions to see the relationship between the dependent variable intention to adopt ATM banking system and the independent variables, Attitude, Subjective Norm, Perceived Behavioral Control, Perceived Ease of Use and Perceived Usefulness. Thus the paper had come up with result of subjective norm and attitude has significant impact on intention to adopt ATM-banking. The predictive capacity of subjective norm is much higher. The paper also presented preferred banking system among customers’ and why they choose between tellers based banking and ATM-banking, customers’ preferences for ATM-banking across different educational levels and gender and ATM-banking services used by customers too. The paper showed the existing legal frameworks on ATM-banking. From the respondents’, receiving banking products or services through tellers based channel is more preferred than ATM-banking channel. ATM-banking usage with educational level and gender, better results were recorded for ATM-banking with educational level of bachelor degree and above and for male participants’. ATM-banking usage is lower among participants’ with lower educational level. Also the paper resulted the multipurpose ATM banking service is used for limited functions of withdrawing money and requesting balance statement. Based on the above findings the paper provides recommendation such as: undertaken awareness creation tasks to improve customers’ knowledge on utilizing ATM-banking packages. And also making ATM always functional, secure and privacy keeper as well as frequent monitoring and maintenance is a must. Too the banks should improve ATM features to attract customers.