FACTORS AFFECTING E-BANKING ADOPTION OF CUSTOMERS; AN INVESTIGATION IN COMMERCIAL BANK OF ETHIOPIA AND FOUR DIFFERENT PRIVATE BANKS, ADDIS ABABA

Abstract

Electronic banking nowadays is becoming a curial technology in the global banking industry for cashless transaction and effective banking services. In Ethiopia, e-banking was introduced by commercial Bank of Ethiopia, ATM Service was introduced for local users in 2001, eight ATMs located in Addis Ababa despite, being the lead the way in introducing ATM based payment system and acquired Visa membership, CBE lagged behind Dashen Bank, which worked aggressively to maintain its lead in electronic payment systems in June 2009 Gardachew, W. (2010) and now almost all banks has introduced. However, the adoption level of this technology is minimal Ayana, G. (2012). The objective of this research is to identify factors that influencing customer‟s adoption of electronic banking. To address this objective technology acceptance model (TAM) with technology-organization-environment (TOE) is employed. The samples were 272 applicable respondents using the purposive sampling technique from Addis Ababa. Questionnaires were distributed to five banks officials of e-banking department (commercial bank, wogagen bank, Dashin bank, Awash bank and Hibret bank) that the electronic banking technology employed, and their currently electronic banking user customers. The primary data was collected from 272 respondents; an interview was also conducted to the bank managers and e-banking department managers. Ordered probit regression and descriptive statistics were used to analyze the primary data which is collected what is more the probit regression also used to test the hypothesis. Additionally correlation analysis ware exploits their relationship between variables. Moreover STATA version 11 was engaged to facilitate the ordered probit regression analysis and the correlation process, Likert scale also used to the descriptive analysis and for the orbit regression. The research focus on related factors such as, demographic characteristics, customer awareness, perceived benefit, perceived risk, perceived security, legal framework and ICT infrastructure , organization factor, perceived usefulness and perceived ease of use. The result of the study concluded that among the factors, perceived benefit was the strongest significant influencing factor followed by perceived security. Customer awareness, perceived ease of use and perceived risk were next more important factors that influence customer‟s intention, to adopt e-banking. To boost the identified factors the researcher pressured banks to announce (promote) benefit of electronic banking and give due attention on security and risk features to decrease customer perception towards them.