The Practice, Challenges and Opportunities of E-Banking Service in Zemen Bank S.C

Abstract

Though there are some progress, Ethiopian banking system is still underdeveloped compared to the rest of the world (Worku, 2010). In Ethiopia Cash appears to be the most governing medium of exchange and electronic payment systems are at an early stage. This study was aimed to assess the main practice, challenges and opportunities of E-Banking in Ethiopia. The study was conducted based on the data gathered from selected 15 Addis Ababa banking centers of Zemen Bank S.C. Qualitative and quantitative research approach was used to answer the research questions that emerge through the review of related literature in respect of the E-Banking system in Ethiopia. The study was statistically analyzed by using data’s obtained from the survey questionnaire and interview. The study used descriptive statistics. Result of the study indicated that recently the E-Banking practice is growing in an increasing rate and NBE is also trying to support such activity by introducing different payment infrastructure. The study also identified that the major barriers Zemen Bank faces in the practice of Electronic banking are, lack of well-organized ICT infrastructure, lack of Support from government, absence of legal frame work, High rates of illiteracy, frequent power and network interruption, fear of risk and unavailability of competent and skilled employee. The study suggests a series of measures which could be taken by the bank which is expected to apply for the banking industry too and by government to address various challenges identified in the thesis. These measures include: Establishing a clear set of legal frame work on the use of technology in bank, supporting the bank by investing on ICT infrastructure and also the bank needs to be focused on technological innovation competition rather than traditional bases of retail bank competition, strive on enhancing customer awareness towards using E-Banking services. Invest on the staffs of the bank to enhance their competence.