FACTORS INFLUENCING ADOPTION OF ONLINE BANKING SERVICE IN FIVE GRADE FOUR BRANCHES UNDER NORTH DISTRICT IN COMMERCIAL BANK OF ETHIOPIA

Abstract

The purpose of this research was to examine the factors that influence the adoption of online banking in 5 grade four branches of Commercial Bank of Ethiopia. To support the study relevant theoretical and empirical literatures were reviewed. The study was based on TAM (Technology Acceptance Model), which has been used extensively in similar studies, with the extension of other models derived from different writers related to this study. To achieve the objectives of this study, data was collected through self-administered questionnaire from a sample of 307 customers. These respondents were selected using probability sampling technique. The reliabilities of the scales used in the data was checked by Cronbach’s Alpha and reassured the reliability of the data. Descriptive statistics Mean Score, Standard Deviation and inferential statistics like Multiple Regression analysis are used in order to address the initial research objective of the study. The results of this study indicate that all independent variables except perceived risk positively influence customer adoption of online banking service. Furthermore, the four independent variables explain 54.5% of effect on customer adoption of online banking andthe rest of 45.5% is due to other independent variables not included in the model. It is recommended that, bank should take some consideration to apply online banking by delivering the information in an easiest way, provide more usefulness and benefits and also minimize the fraud as providing more security and privacy. This will help the bank to increase profit by reducing its cost, time saving and retain more potential