ASSESSMENT ON THE CHALLENGES AND PROSPECT OF E-BANKING IN ETHIOPIAN BANKING INDUSTRY: A CASE OF SELECTED COMMERCIAL BANKS

Abstract

This study attempts to assess and evaluate the challenges and prospects of electronic banking facilities in the Ethiopian banking industry. With respect to the challenge, this can influence firms from taking advantage of E-banking system and expected prospect by adopting the system. The study was conducted based on the data gathered from six banks in Ethiopia; five private banks. (Dashen bank, Zemen bank, Awash international bank, United bank, Abyssinia bank) and one state owned bank (commercial bank of Ethiopia).descriptive research approach was implemented. The study was used purposive sampling technique target population the study were electronic banking staff. Mixed research approach was uses to answer the research questions that emerge through the review of existing literature. The study data has been obtained from the survey questionnaire and interview also the study was use descriptive analysis techniques .research framework developed based on technology-organization-environment framework and Technology acceptance model to guide the study. The result of the study indicated that, the major challenge Ethiopian banking industry faces in the adoption of Electronic banking are on to technology-organization-environmental model, security risk, lack of trust, lack of legal and regulatory frame work, Lack of ICT infrastructure like electric power and telecom network, lack of sufficient government support. In addition, absence of competition between local and foreign banks, The study also identified perceived ease of use and perceived usefulness as a prospect of adopting E-banking system under technology- acceptance model, such as increase convenience, transaction minimization, cost saving, improvements in speed and efficiency items of time and cost saving. The study recommends that Ethio telecom should have to support banking industry by investing on ICT infrastructure developments, government should support the banking industry by introducing financial education program, establishments of a comprehensive legal and regulatory frame works on the use of technological innovation.