THE EFFECT OF DIGITAL BANKING ON CUSTOMER EXPERIENCE: THE CASE OF SELECTED COMMERCIAL BANKS IN ADDIS ABABA CITY

Abstract

Digital banking through telephone, internet and mobile is becoming important for banks’ service marketing, especially with the increase in digital device usage and customer demand for financial services. The changing dynamics of banking means that banks’ existence is no longer solely dependent on branch sales. Capturing and retaining customers are vital for banks, and digital banking is becoming the tool of choice. The main objective of this study was to examine the effect of digital banking on customer experience in selected commercial banks (Bank of Abyssinia, Commercial Bank of Ethiopia and United Bank) in Addis Ababa city). The data used in this study was collected through survey questionnaire, distributed to three hundred eighty four customers of three selected commercial Banks in twelve branches. Four branches were chosen from each Banks using simple random sampling technique. In order to test the reliability of the instrument, the Cronbach alpha test was used. Pearson correlation and multiple linear regression analysis were employed to estimate causal relationships between digital banking and customer experience. The findings of this research revealed that the use of digital banking of the selected commercial Banks of Ethiopia has a positive and statistically significant effect on customers experience i.e. p<0.05 and has a positive relationship. Finally, the study recommends selected commercial Banks to invest on enhancement of digital banking that able to deliver outstanding experience to customers.