Assessment of the Opportunities and Challenges for the Adoption of E-Banking Service (The case of Commercial bank of Ethiopia)

Abstract

Despite the growth of e-banking adoption worldwide, Ethiopian banks continue to conduct most of their banking transactions using traditional methods. The objective of this paper 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. To acquire the intended information the researcher use different data collection instruments like distributing questionnaire, conducting interview. The questionnaire types are both open-ended and close-ended. The study was conducted based on the data gathered from the selected branches of the bank. The collected data was analysed by using descriptive analysis such as tables and percentages. A research framework developed based on technology-organization-environment framework and Technology acceptance model to guide the study. The different e-banking channels by which bank is using to provide these services to the customer are ATM card, point of sale , visa card, master card, Internet banking and Mobile or SMS banking, are among the benefits of adopting the system from the viewpoint of the bank. Among the different opportunity that initiate banks to adopt e-banking services: desire existence of high competition in the banking industry, desire to improve organizational performance, desire to reduce transaction cost, desire to cover wide geographical area, and desire to build organizational reputation are among others. Chances of risk, Lack of suitable legal and regulatory framework, absence of financial networks that links different banks, Low level of internet penetration and poorly developed telecommunication infrastructure, high cost of internet, security concerns are among the major challenges for the adoption of e-banking service in the country. However, late adopter opportunities, improvement in the banking habit of the society, commitment of the government to facilitate the expansion of ICT infrastructure and willingness among banks to cooperate in building infrastructure are the major opportunities for the adoption of the system in the banking industry