FACTORS AFFECTING THE ADOPTION OF INTERNET BANKING BY CUSTOMERS OF COMMERCIAL BANKS IN ADDIS ABABA

Abstract

Internet banking is defined as a system that enables bank customers to get access to their accounts and the general information on bank products and services through the use of bank’s website, without the intervention or inconvenience of sending letters, faxes, original signatures and telephone confirmations. The study aimed at exploring the factors affecting the adoption of internet banking by customers in selected Banks in Addis Ababa. To achieve this purpose, explanatory study design used to analyze the data collected through cross-sectional survey questionnaire from a sample of 300 bank customers. These respondents were selected using convenience sampling. The data collected from the questionnaire were analyzed using Statistical measure which is correlation analysis. The major findings of the study include the four internet banking factors i.e., perceived ease of use, perceived usefulness, culture and attitude and intention to use internet banking found to be positively and significantly related. IT indicates that perceived risk is the most important factor to have a strong, negative and significant relationship with intention to use internet banking. In addition to this, all of the factors affecting internet banking in this research significantly explain the variations in intention to use internet banking. However, except perceived risk, which statistically and negatively predicts the variation in intention to use, the four factors affecting internet banking i.e. perceived ease of use, perceived usefulness, culture and attitude statistically and positively predict the variation in intention to use. Based on the findings of the study, it is recommended that Banks should concentrate on their corporate websites to make it more user-friendly since customers should perceive it as easy to use. They can also educate how to use Internet banking services to customers and Banks should install security features such as encryption devices, which safeguard sensitive information.