PROSPECT AND CHALLENGES OF E- BANKING SERVICE IN COMMERCIAL BANK OF ETHIOPIA THE CASE OF WEST ADDIS ABABA DISTRICT

Abstract

Despite the growth of e-banking adoption worldwide, Ethiopian banks, continue to conduct most of their banking transactions using traditional methods. Recently commercial banks operating in the country have endorsed electronic banking service. In light of this, the study has aimed to study the prospect and challenges of E-Banking service from the customer perspective taking the case of selected branches of Commercial Bank of Ethiopia in West Addis Ababa District. Based on the general objective, the study has also formulated six specific objectives and examined each in depth. In conducting the study, descriptive research design was employed with cross-sectional data collection strategy. Both primary and secondary data were collected for the purpose of this study from customers of CBE in western Addis Ababa district. Data was collected from respondents using questionnaire and key informant interviews. The data collected through questionnaire was analyzed using descriptive analysis such as frequency distribution and percentages and presented in tables while the qualitative data collected through interviews is analyzed using content analysis and logical interpretation of idea. From the analysis of the collected data, the findings revealed that balance inquiry, cash withdrawal, utility payment, purchasing goods, and service are the major service options available to the customer once they have begun to use e banking. Besides, it is also confirmed in the study that the bank provides e banking to its customers using e-banking channels of ATM, internet banking, mobile banking, and point of sales. On the viewpoint of the customers: reduced costs, increased comfort and time saving, better cash management, faster way of conducting banking transactions are some of the benefits of using E banking and customers moderately understand the service of electronic banking provided by the bank. In the eyes of sampled customers, lack of suitable legal and regulatory framework, low level of internet penetration and poorly developed telecommunication infrastructure, high cost of internet, security concerns, and service provision languages are among the major challenges of e-banking service provided by CBE in the study area. However, the trainings given to the staffs, which increased their knowledge and technical skill in solving e-banking problems, continuous improvement in the quality of e-banking services given to customers and the efforts of the bank to expand e-banking infrastructures and services, are the major prospects of electronic banking services in CBE west Addis Ababa district. The bank should improve both the quality and type of services, the bank should promote public relation work, the bank needs focus on means to increase the quality of the service, the government should encouraged to expand the ICT infrastructure, the bank should encouraged the internet penetration telecommunication infrastructure, the bank should give continuous training to all employees who have direct relation with the customers are the recommendations.