EFFECT OF E-BANKING SERVICE QUALITY ON CUSTOMER

SATISFACTION: THE CASE OF COMMERCIAL BANK OF

ETHIOPIA ARBA MINCH BRANCHES

BY

MESFIN MENAMO JOFFE

ARBA MINCH, ETHIOPIA

AUGUST, 2018
EFFECT OF E-BANKING SERVICE QUALITY ON CUSTOMER
SATISFACTION: THE CASE OF COMMERCIAL BANK OF
ETHIOPIA ARBA MINCH BRANCHES

BY: MESFIN MENAMO JOFFE

ADVISOR: HABTAMU ENDRIS (PhD)

A RESEARCH PROJECT SUBMITTED TO POST GRADUATE

STUDIES OF ARBA MINCH UNIVERSITY IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR DEGREE OF
MASTERS OF BUSINESS ADMINISTRATION (MBA)

ARBA MINCH UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

SCHOOL OF POST GRADUATE STUDIES

AUGUST, 2018
 DECLARATION

I hereby declare that the thesis entitled “Effect of E-Banking Service Quality on Customer
Satisfaction: The Case of Commercial Bank of Ethiopia Arba Minch Branches” is my
original work. I have carried out the present study independently with the guidance and
support of the research advisor, Dr. Habtamu Endris. Any other contributors or sources used
for the study have been duly acknowledged. Moreover, this study has not been submitted for
the award of any Degree or Diploma Program in this or any other Institution.

Name: Mesfin Menamo Joffe

Signature: _______________________________________

Date: ___________________________________________
 ARBA MINCH UNIVERSITY
SCHOOL OF POST GRADUATE STUDIES
ADVISORS’ THESIS SUBMISSION APPROVAL SHEET

This is to certify that Mr. Mesfin Menamo Joffe has completed his thesis entitled “Effect of
E-Banking Service Quality on Customer Satisfaction: The Case of Commercial Bank of
Ethiopia Arba Minch Branches”. In my opinion, all the materials used for the paper has
been duly acknowledged and this paper is appropriate to be submitted as a partial fulfillment
of the requirement for the award of Degree in Masters of Business Administration.

Name of Advisor Signature Date

Dr. Habtamu Endris

 Arba Minch University

College of Business and Economics

Department of Management

MBA Project

Approval of Board of Examiners

1. _____________________________ ____________ ___________

External examiner Signature Date

2. _____________________________ ____________ ___________

Internal Examiner Signature Date

3. _____________________________ ____________ ___________

Chairperson Signature Date
 ACKNOWLEDGMENT

It is the grace, mercy, charity, forgiveness, help and kindness of the almighty God that made
me still alive, achieve this success and strength and to go through all the difficult time.

I would like to express my special thanks of gratitude to my advisor Dr. Habtamu Endris, for
his unreserved assistance, suggestion and valuable guidance and encouragement extended to
me.

I place on record my sincere thanks to my wife Lidiya Demise. Her countless support and
prayer has given me extra strength and ambition to succeed.

Finally, I would like to thank all my families and friends for their support in all matters from
the start to the end of the program.

Mesfin Menamo

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 ACRONYMS AND ABBREVIATIONS

ANOVA- Analysis of Variance

ATM- Automated Teller Machine

CBE- Commercial Bank of Ethiopia

CUS_SAT- Customer Satisfaction

DV- Dependent Variable

E-banking- Electronic banking

ICT- Information Communication Technology

IV- Independent Variable

PC- Personal Computer

PDA- Personal Digital Assistant

POS- Point of Sales

PSS- Premium Switch Solutions

SMS- Short Message Service

SPSS- Statistical Package for Social Science

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 TABLE OF CONTENTS
CONTENTS PAGE

ACKNOWLEDGMENT ......................................................................................................................... i
ACRONYMS AND ABBREVIATIONS ............................................................................................... ii
TABLE OF CONTENTS ...................................................................................................................... iii
LIST OF TABLES ................................................................................................................................ vi
LIST OF FIGURES .............................................................................................................................. vii
ABSTRACT .......................................................................................................................................... viii
CHAPTER ONE..................................................................................................................................... 1
1. Introduction .................................................................................................................................... 1
1.1 Background of the Study ........................................................................................................ 1
1.2 Statement of the Problem ....................................................................................................... 3
1.3 Research Questions ................................................................................................................ 5
1.4 Objective of the study ............................................................................................................. 5
1.4.1 General objective of the study ........................................................................................ 5
1.4.2 Specific objectives of the Study ..................................................................................... 5
1.5 Significant of the Study .......................................................................................................... 6
1.6 Scope of the study .................................................................................................................. 6
1.7 Limitation of the study ........................................................................................................... 6
1.8 Operational Definitions .......................................................................................................... 7
1.9 Organization of the paper ....................................................................................................... 7
CHAPTER TWO .................................................................................................................................... 8
LITERATURE REVIEW ....................................................................................................................... 8
2. Introduction .................................................................................................................................... 8
2.1 History of E-Banking ............................................................................................................. 8
2.2 Definition of E-Banking ......................................................................................................... 9
2.3 E-Banking in Ethiopia .......................................................................................................... 10
2.4 Types of E-Banking Services ............................................................................................... 11
2.4.1 Automated Teller Machine (ATM) .............................................................................. 12
2.4.2 Mobile Banking ............................................................................................................ 12
2.4.3 Internet banking ............................................................................................................ 12

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 2.4.4 Point of Sales (POS) ..................................................................................................... 13
2.4.5 Personal Computer Banking ......................................................................................... 13
2.4.6 Agent Banking .............................................................................................................. 13
2.4.7 CBE Birr ....................................................................................................................... 14
2.5 Benefits of E-Banking .......................................................................................................... 14
2.6 Issues associated with E-Banking......................................................................................... 15
2.6.1 Legal and Regulatory issues ......................................................................................... 15
2.6.2 Operational Issues ........................................................................................................ 16
2.6.3 Security Issues .............................................................................................................. 16
2.6.4 Privacy Issues ............................................................................................................... 16
2.6.5 Strategic Issues ............................................................................................................. 17
2.7 Challenges of E-Banking in Ethiopia ................................................................................... 17
2.8 Opportunities of E-banking in Ethiopia................................................................................ 18
2.9 Customer Satisfaction ........................................................................................................... 19
2.10 Service Quality (SERVQUAL) model ................................................................................. 20
2.10.1 Reliability ..................................................................................................................... 21
2.10.2 Responsiveness ............................................................................................................. 21
2.10.3 Assurance ..................................................................................................................... 21
2.10.4 Empathy ........................................................................................................................ 21
2.10.5 Tangibility .................................................................................................................... 22
2.11 Relation between customer satisfaction and service quality ................................................ 22
2.12 Relationship between E-Banking and customer satisfaction ................................................ 23
2.13 Empirical Review ................................................................................................................. 23
2.14 Conceptual Framework ........................................................................................................ 25
CHAPTER THREE .............................................................................................................................. 26
RESEARCH METHODOLOGY ......................................................................................................... 26
3. Introduction .................................................................................................................................. 26
3.1 Description of Study Area .................................................................................................... 26
3.2 Research Approach ............................................................................................................... 26
3.3 Research design .................................................................................................................... 27
3.4 Target population.................................................................................................................. 27
3.5 Sampling Technique ............................................................................................................. 27

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 3.6 Sampling Size ....................................................................................................................... 28
3.7 Data collection and Measurement ........................................................................................ 28
3.8 Data Analysis and Model Specification ............................................................................... 29
3.9 Validity ................................................................................................................................. 30
3.10 Reliability ............................................................................................................................. 30
3.11 Ethical Considerations .......................................................................................................... 31
CHAPTER FOUR ................................................................................................................................ 32
RESULTS AND DISCUSSION........................................................................................................... 32
4. Introduction .................................................................................................................................. 32
4.1 Descriptive Statistical Analysis ............................................................................................ 32
4.1.1 Descriptive Statistics of Demographic Profile ............................................................. 32
4.1.2 Descriptive Statistics of E-banking Service Quality Dimensions ................................ 34
4.1.3 Descriptive Statistics of Customer satisfaction ............................................................ 39
4.2 Pearson Correlation Analysis ............................................................................................... 39
4.3 Multiple Regression Analysis............................................................................................... 41
4.3.1 Assumptions of Multiple Regression ........................................................................... 41
4.3.2 Multiple Regression Results ......................................................................................... 46
4.3.3 Effect of E-banking Service on Customer Satisfaction ................................................ 48
CHAPTER FIVE .................................................................................................................................. 50
SUMMARY, CONCLUSION AND RECOMMENDATIONS........................................................... 50
1. Introduction .................................................................................................................................. 50
5.1 Summary of Findings ............................................................................................................ 50
5.2 Conclusion ............................................................................................................................ 51
5.3 Recommendations................................................................................................................ 52
5.4 Suggestions for Future Study ............................................................................................... 53
REFERENCES ..................................................................................................................................... 54
APPENDICES ...................................................................................................................................... 58

v
 LIST OF TABLES

TABLE PAGE

Table 3.1 CBE Arba Minch branches with proportion of sample size ………..……...….….28

Table 3.2 Reliability of the study instrument………….…………….…………..…….….….31

Table 4.1 Respondents‟ Age, Gender, Educational and Occupational profiles……...…........32

Table 4.2 Respondents‟ Income, Marital Status and Experience profiles……………….......34

Table 4.3 Respondents response on Reliability Dimension….……………..…………..…....35

Table 4.4 Respondents response on Responsiveness Dimension……..…..…..…………......36

Table 4.5 Respondents response on Assurance Dimension…..………………...…….…..….37

Table 4.6 Respondents response on Empathy Dimension………..….….……...….….…..…37

Table 4.7 Respondents response on Tangibility Dimension……...……………………….....38

Table 4.8 Respondents response on Customer Satisfaction Dimension….……………...…..39

Table 4.9 Thumb Rule for Interpreting the Size of a Correlation Coefficient…….…………40

Table 4.10 The Relation between independent and dependent Variables……………….......40

Table 4.11 Durbin-Watson Statistics for Independence of Residual….…………...……...…44

Table 4.12 Multicollinearity Test……….…………………………………………….......…45

Table 4.13 Regression Model Summary Result…….………………………………...……..46

Table 4.14 ANOVA Result…….…………………...………….…………….................……46

Table 4.15 Coefficient result………..............................................................................……..47

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 LIST OF FIGURES

FIGURE PAGE

Figure 2.1 Conceptual Framework of the study……………………………………………..25

Figure 4.1 Normality Test Result………...……………………………….…………………42

Figure 4.2 Linearity Test Result…………..…………………….……………...……………43

Figure 4.3 Homoscedasticity Test Result…………..…………………......…………………44

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 ABSTRACT
The main purpose of this study is to examine the effect of E-banking service quality on
customer satisfaction in case of CBE Arba Minch Branches. The study was an explanatory
research design and used the quantitative research approach. The structured Likert scale-
based questionnaires were distributed and collected from 204 conveniently selected E-
banking service users of CBE Arba Minch, Secha, Sikela and Nechsar branches. The data
was analyzed by undertaking the descriptive statistics, Pearson correlation and multiple
regression analysis. Results of the study revealed that among the five service quality
dimensions (reliability, responsiveness, assurance, empathy and tangibility), assurance has
the highest positive effect on customer satisfaction followed by reliability and responsiveness
whereas empathy and tangibility have relatively less positive effect on customer satisfaction.
Furthermore, the results generated by E-banking service quality dimensions explain
significant variation in customer satisfaction. As a result, the researcher concludes that E-
banking service quality has positive and significant effect on customer satisfaction.

Key words: E-banking, Customer satisfaction, Service quality dimensions, CBE

viii
 CHAPTER ONE

1. Introduction

1.1 Background of the Study

The banking industry is being reformed by globalization, competition and innovation and
customer needs. Due to the emergence of a knowledge-based economy and society as
information and communication technology (ICT) advanced, banking services have
undergone profound changes during the last 10 years (Driga & Isac, 2014).

The development in ICT made this world a global village and revolutionized the banking
industry. According to Sumra et al. (2011), the introduction of E- banking has revolutionized
and redefined the ways banks were operating. In the 21st century where the banking industry
is highly complex and competitive ICT play a significant role in banking‟s operation (Juddy,
2013). The competition in banking sector augmented over the last few years and to stay
competitive, banks are adopting novel tools and techniques to ensure customer retention and
satisfaction and E-Banking is one of the major tools and techniques. The banks that adopt the
latest technology and payment channels are more successful in the competitive financial
market. They have been able to generate more and more business resulting in their greater
profitability (Endalkachew, 2013).

E-banking is defined as a variety of self-service platforms such as internet (online) banking,

telephone banking, mobile banking, TV banking, Agent banking, phone banking, and PC
banking whereby customers access these services using electronic devices like personal
computer, Automated teller machine (ATM), Point of sale terminals and mobile phones
without their physical presence in the bank (Pikkarainen et al., 2004). This is gradually
creating a cashless society where consumers no longer have to pay for all their purchases
with hard cash.

Similarly, Christopher et al. (2006) indicated that e-banking provides an important channel to
sell products and services of banks and is perceived to be a necessity for banks to be
successful. It is critical in the transformation of banks in areas such as products and services
and how they are delivered to customers. Thus, it is seen as an important tool in the

1
development, growth, promotion of innovation and enhancing competitiveness of banks
(Gupta, 2008).

Simon and Thomas (2016) state that Africa and other developing countries‟ E-banking
adoption has been inhibited by the quality, availability and the cost of accessing
telecommunication infrastructures due to lack of skilled staff, low internet penetration, low
bank account, and lack of timely delivery of physical goods also hinder the growth of e-
banking. As one of developing countries Ethiopian banking system face similar challenges
and electronic payment systems are at an embryonic stage. Moreover, among commercial
banks in Ethiopia very few of them are engaged with the diffusion of e-commerce. In
addition, among several services of E-banking, they are limited to ATM service.

The SERVQUAL model of Parasuraman et al. (1988) proposed a five dimensional construct
of perceived service quality tangibles, reliability, responsiveness, assurance and empathy as
the instruments for measuring service quality (Surafel, 2016).

Customer satisfaction is a much sought-after phenomenon in today‟s highly competitive and

globalized market place. It refers to the extent to which customers are happy with the
products and/or services provided by an organization (Simon & Thomas, 2016). Good
customer service is the main factor that will determine in the future whether the business will
survive or fail. Due to rapid technological changes and market competition service quality
becomes an increasingly important issue. Therefore, understanding a service quality issue
becomes important to satisfy customers (Simon, 2016).

The developments of technologies have enabled organizations to provide superior services

for customers‟ satisfaction. The banks should maintain close and stable relationship with
their customers by providing high quality product and services. Thus, E-banking benefits the
customer by allowing easier access to financial services, convenience and time saving in
managing their finance (Al-Smadi, 2012). Therefore, Ethiopian commercial banks are
expected to deliver quality service through new technologies to ensure customer satisfaction
to stay competitive in the industry. In developing countries including Ethiopia, this area is in
embryonic stage that needs studies. Thus, the main purpose of this study is examining the
Effect of E-Banking Service Quality on Customer Satisfaction the Case of Commercial Bank
of Ethiopia (CBE) in Arba Minch Branches.

2
 1.2 Statement of the Problem

According to Agarwal & Josh (2016) the first major mission and purpose of any business
organization is satisfying customers. When customers are satisfied the organization achieve
higher sales, profit and market share and vice versa. In the past, customers‟ demand for
banking services was driven basically by safety of their money as well as interest accruing
from such savings. However, the present-day customers‟ demand has shifted from just safety
of money to how banks deliver their services. The reason is that the present-day customer
requires efficient, fast and convenient services (Kwashie, 2012).

E-banking is adopted by banks so as to improve their service delivery, minimize waiting time
in the banking hall, enable customers to withdraw cash anytime, aid payment and remittance,
request for online statement, or even transfer deposit to a third-party account. The benefits
banks derive from E-banking in banking operations especially with respect to service
delivery improved efficiency and effectiveness of their operations so that more transactions
can be processed faster and most conveniently (Agarwal & Josh, 2016).

E-banking allows customers to check accounts, transfer money and can have access to
numerous banking products and services. It has a vital role in the economy helping buyers
and sellers to make financial transaction through the exchange of goods and services without
physical contact. On other hand, e-banking enables banks to offer low-cost, high value-added
financial services and also benefit from the promotional opportunity to cross sell products
such as credit cards and loans (Prince, 2015). Al-Smadi (2012) also described that compared
to ordinary banking system E-banking is providing the competitive advantage by lowering
the cost and providing best satisfaction of customer needs.

Besides the benefit of E-banking, the study of Agarwal and Josh (2016) state factors which
affect customer satisfaction in E-banking service in commercial bank of Ethiopia, such as,
frequent breakdown of ATM service, lack of convenience of E-banking service, under-
development of technological infrastructure, lack of suitable and regulatory frame work and
interruption of network. Agarwal and Josh (2016) concluded that among the E-banking
service quality dimensions, reliability, ease of use, accessibility, efficiency, responsiveness &
cycle time have significant impact on customer satisfaction whereas security & privacy has
no significant impact on customer satisfaction. Contrary to Agarwal and Josh (2016) study,

3
Prince (2015) study indicated that security as a major challenge hindering customers‟
patronage of e-banking services.

Hitesh (2015), found that reliability has a positive and significant effect on customer
satisfaction. On the contrary, Amelework (2016) reported that reliability has a positive and
insignificant effect on customer satisfaction towards E-banking services.

Amelework (2016) find out assurance has high positive and significant effect on customer
satisfaction. But, Simon (2016) reported that assurance has a negative and insignificant effect
on customer satisfaction satisfaction towards E-banking services.

Furthermore, Simon (2016) study indicated that except assurance the four service quality
dimensions tangibility, reliability, responsiveness and empathy have positive and significant
effect on customer satisfaction, but the result still runs contrarily to that of Areeba, et al.
(2016) that their results indicate among the five service quality dimensions, tangibility and
empathy have insignificant effect on customer satisfaction.

Although a few related studies were conducted with effect of E-banking on customer
satisfaction, till now there is inconsistent conclusion. Thus, Fikerselassie (2017) proposed for
future study that need of examining E-banking and its effect on customer satisfaction in order
to generalize the findings to the Ethiopian economy and also the researcher stated the
methodological gap of his study that the sample used was not sufficient, hence making
generalization of the findings was very difficult. Likewise, Areeba et al. (2016)
recommended that further research should be carried out with increased sample size and also
bank specific research should be conducted to generate more clear results in order to
generalize the results of the study. Furthermore, the present study minimized the gap of
methodology and it used the most famous SERVQUAL model which used for related studied
by different researches (Areeba et al., 2016; Surafel, 2016; Tizazu, 2012 and Gezahegn,
2015).

Therefore, due to inconsistent conclusion, methodological gap and recommendations of

previous researchers for further study, this research mainly focuses on to know Effect of E-
Banking Service Quality on Customer Satisfaction: The Case of CBE Arba Minch branches.

4
 1.3 Research Questions

In general, the study answered the following research questions:

1. What is the effect of E-banking service reliability on customer satisfaction in case of

CBE Arba Minch Branches?
2. What is the effect of E-banking service responsiveness on customer satisfaction in
case of CBE Arba Minch Branches?
3. What is the effect of E-banking service assurance on customer satisfaction in case of
CBE Arba Minch Branches?
4. What is the effect of E-banking service empathy on customer satisfaction in case of
CBE Arba Minch Branches?
5. What is the effect of E-banking service tangibility on customer satisfaction in case of
CBE Arba Minch Branches?

1.4 Objective of the study

1.4.1 General objective of the study

The general objective of the study is to examine the Effect of E-Banking Service Quality on
Customer Satisfaction: The Case of CBE Arba Minch Branches.

1.4.2 Specific objectives of the Study

The specific objectives are as follows:

1. To examine the effect of E-banking service reliability on customer satisfaction in case

of CBE Arba Minch Branches.
2. To examine the effect of E-banking service responsiveness on customer satisfaction
in case of CBE Arba Minch Branches.
3. To examine the effect of E-banking service assurance on customer satisfaction in case
of CBE Arba Minch Branches.
4. To examine the effect of E-banking service empathy on customer satisfaction in case
of CBE Arba Minch Branches.
5. To examine the effect of E-banking service tangibility on customer satisfaction in
case of CBE Arba Minch Branches.

5
 1.5 Significant of the Study

Basically, the study helps the banking sectors to see the effects of E-banking service quality
on customer satisfaction and also this study provides indication for the improvement of these
services. Moreover, it adds value to the existing knowledge of E-banking and customer
satisfaction in the banking industry and the study can be used for further investigations in the
related issues.

1.6 Scope of the study

The study is delimited of geographical, conceptual, methodological and time scope.

Geographically, the study considers Arba Minch, Secha, Sikela and Nechsar branches of
commercial banks of Ethiopia. Conceptually, the study was conducted to assess the effect of
E-banking service quality on customer satisfaction based on the five-service quality
dimensions such as: Reliability, Responsiveness, Assurance, Empathy and Tangibility.
Methodologically, among the types of non-probability sampling the researcher was used
convenience sampling technique to select each respondent due to difficulty to have list of E-
banking customers. Furthermore, out of all the various existing E-banking services which
mentioned by different researchers, the five types of E-banking services were chosen for the
study such as are Mobile banking, CBE Birr, point of sale (POS) service, ATM services, and
internet banking. Because, these were the available E-banking services that the customers
using at CBE Arba Minch branches. Finally, this study is a cross-sectional that examines a
particular phenomenon (or phenomena) from March-August/2018.

1.7 Limitation of the study

The study was conducted to examine the effect of E-banking service quality on customer
satisfaction in the case of customers of CBE Arba Minch branches. Furthermore, the study
used cross-sectional data to explain the effect of E-banking service quality dimensions;
reliability, responsiveness, assurance, empathy and tangibility on customer satisfaction.
Therefore, the stated results of this research cannot be considered as a representative of the
whole commercial banks of Ethiopia.

6
 1.8 Operational Definitions

Electronic Banking:-the delivery of banks‟ information and services to customers through

internet and different electronic intelligent devices.

Electronic intelligent device: -a communication materials that permitting customers to

access the banking service.

Customer satisfaction: - refers to the extent to which customers are happy with the products
and/or services provided.

Reliability: - Ability to perform the ordered service dependable and accurately

Responsiveness: -Prompt delivery of services to customers

Assurance: - knowledge and courtesy of employees and their ability to inspire trust and
confidence and safety and security of E-banking service

Empathy: - Individualized attention to the users.

Tangibility: -Outlook of physical equipment and communication materials (i.e. the

modernity, easy to use and visual appearance of E-banking service devices)

SERVQUAL model: - the five-service quality dimensions such as: Reliability,

Responsiveness, Assurance, Empathy and Tangibility.

1.9 Organization of the paper

The study is organized in to five chapters. The first chapter deals with background of the
study, statements of the problem, objective of the study, research question, significances of
the study, scope of the study, limitations of the study, operational definitions and
organization of the research. Chapter two presents the literature review regarding the research
area and sets out the theoretical foundation and empirical studies for the research. The third
chapter outlines research methodologies that consists description of study area, research
approach, research design, target population, sampling technique, sampling size, data
collection and measurement, data analysis, research model, validity, reliability test and
ethical considerations. The fourth chapter discussed about the findings and discussions of the
collected data. The last chapter presents conclusion and recommendation of the study.

7
 CHAPTER TWO

LITERATURE REVIEW

2. Introduction

This chapter is a comprehensive presentation of the relevant literature of previous studies that
related to the research problem. The section comprises of ten sections. These are History of
E-Banking, definition of e-banking, E-banking in Ethiopia, types of E-banking services,
benefits of E-banking, issues associated with E-Banking, challenge of E-banking in Ethiopia,
opportunities of E-banking in Ethiopia, customer satisfaction, service quality (SERVQUAL)
model, relation between customer satisfaction and service quality, relationship between E-
Banking and customer satisfaction, empirical review and conceptual framework.

2.1 History of E-Banking

The evolution of the e-banking industry can be traced to the early 1970s when banks began to
look at these types of services as an alternative to some of their traditional bank functions.
First, such a choice was considered appropriate since it ensures reduced costs as branches
were very expensive to set up and maintain. Second, e-banking products and services like
ATMs and electronic fund transfer were an important element of differentiation used by
banks (Driga & Isac, 2014).

The evolution of banking technology has been driven by changes in distribution channels as
evidenced by automated teller machine (ATM), Phone-banking, Tele banking, PC-banking
and most recently internet banking (Chang, 2003).

The term e-banking became popular in the early 1980‟s referring to using a computer to
access banking service via a phone line. E-banking first appeared in New York in 1981,
where it was offered by major banks in that city, such as Citibank, Chase Manhattan,
Chemical and Manufactured Hanover. Banks from the United Kingdom started to adopt the
concept in 1983 where the Bank of Scotland was the first to introduce it. The early electronic
banking services were basic, covering services like viewing bank statements and paying bills
online without being a full transaction banking service (Driga & Isac, 2014).

8
E-banking is a high-order construct, which consists of several distribution channels. It should
be noted that E-banking is a bigger platform than just banking via the Internet. However, the
most general type of E-banking in our times is banking via the Internet, in other words
Internet banking. The term E-banking can be described in many ways. In a very simple form,
it can mean the provision of information or services by a bank to its customers, via a
computer, television, telephone, or mobile phone (Daniel, 1999).

2.2 Definition of E-Banking

Daniel (1999) defines E-banking as the delivery of banks' information and services by banks
to customers through different delivery channels that can be used with different electronic
devices such as computer and a mobile phone with browser software, telephone or digital
television.

Magemhe et al. (2002) also defined E-banking (e-banking) is nothing but e-business in
banking industry. E-banking is a generic term for delivery of banking services and products
through electronic channels, such as the telephone, the internet, the cell phone, etc.

Pikkarainen et al. (2004) defines E-banking as an "internet portal, by which customers can
use different kinds of banking services ranging from bill payment to making investments".

Timothy (2012) E-banking alludes to the utilization of the Internet as a remote conveyance
channel for giving administrations, for example, opening a bank account, transferring funds
among diverse accounts and electronic bill presentment and payment. This can be offered in
two principle ways. A bank with physical offices can build up a Website and offer these
services to its clients notwithstanding its customary conveyance channels. Second, is to set
up a virtual bank, where the PC server is housed in an office that serves as the lawful location
of such a bank. The banks offer their clients the capacity to make deposits and withdraw
funds by means of ATMs (Automated Teller Machines) or other remote conveyance channels
claimed by different foundations, for which an administration expense is acquired.

E-banking (E-banking) is banking system which any user with electronic devise like a
personal computer and a browser can get connected to his bank‟s website to perform any of
the virtual banking functions. In internet banking system, the bank has a centralized database
that is web-enabled. (Krishna et al., 2015)

9
 2.3 E-Banking in Ethiopia

Certainly, the banking industry in Ethiopia is underdeveloped and therefore there is an all
immediate need to embark on capacity building arrangements and modernize the banking
system by employing the state- of-the-art technology being used anywhere in the world. With
a growing number of import-export businesses, and increased international trades and
international relations, the current banking system is short of providing efficient and
dependable services and therefore all banks operating in Ethiopia should recognize the need
for introducing E-banking system to satisfy their customers and meet the requirements of
rapidly expanding domestic and international trades, and increasing international banking
services (Gardachew, 2010).

The appearance of E-banking in Ethiopia goes back to the late 2001, when CBE introduced
the service for local users with its eight ATMs located in Addis Ababa. Then after Dashin
bank comes to the picture in the year 2006 with its ATMs that provide service for local
Dashen Visa Card holders and international Visa Cardholders coming to Ethiopia. United
Bank S.C is the first to introduce tele-banking, including text messages or SMS by the end of
2008. Then, United Bank starts to deliver E-banking services like ATM, internet, mobile and
agent banking (Abebe, 2016).

The first ever E-banking gateway was signed between Ethiopian Commodity Exchange
(ECX) and Dashen Bank and CBE. The E-banking system being developed with both banks
is designed to give a secure electronic data sharing gateway between clients, banks and ECX,
facilitating a smooth transaction. As the CBE continues to move at a snail's pace in its
turnkey solution for Card Based Payment System, Dashen Bank remains so far, the sole
player in the field of E-banking since 2006. The agreements signed by other private banks to
introduce e-banking are welcoming (Gardachew, 2010).

Zemen Bank, the only Ethiopian bank attached in the idea of single branch banking, by
launching full-scale internet banking, a service which is new to Ethiopian banking industry in
the year 2010. The bank tested the venture through its first phase of the online service, and
now it is already started the full-fledged version, which enable customers to make online
money transfer freely. Previously, the online banking service, delivered by the bank, only
gave access to bank statements and exchange rate information. The new and never-been-tried

10
service proposed by the bank is to include free account money transfer, corporate payroll
uploading system where employers could upload payroll to the system and make payments to
individual worker‟s accounts online and online utility bill settlement system, when utility
companies are ready (Fikerselassie, 2017).

Currently, there are only a few agreements in place to share ATM resources. The first was
the Premium Switch Solutions (PSS), which was established by three banks in 2009 namely
Awash International Bank S.C., Nib International Bank S.C and United Bank S.C., with a
capital of 165 million Br, and now has six-member banks, including Awash International
Bank S.C., United Bank S.C., Nib International Bank S.C., Berhan International Bank S.C.,
Addis International Bank S.C and the Cooperative Bank of Oromia S.C. It is the first
certified Third-Party Payment Processor by the regulatory party, National Bank of Ethiopia
and starts its operations in July 2012. Moreover, PSS has made its system certified by VISA,
Master Card and Union pay. Hence, members connected to PSS network can issue and
acquire cards with these brands. Per the plan of PSS, there was one ATM at every branch of
the consortium banks, all domestic airports serviced by commercial service, shopping
complexes and merchants. The agreement is the first significant cooperation between
competing banks in Ethiopia, which others should be encouraged to follow as there is no
single bank in Ethiopia that can afford to provide extensive geographical coverage and access
(Abebe, 2016)

2.4 Types of E-Banking Services

The E-banking services are the banking services which delivered to the customers through
the channel of electronic intelligent devices. Gan and Clemes (2006) state that E-banking can
be defined as a variety of platforms such as internet banking or (online banking), TV-based
banking, mobile phone banking, and PC (personal computer) banking (or offline banking)
whereby customers access these services using an intelligent electronic device, like PC,
personal digital assistant (PDA), automated teller machine (ATM), point of sale (POS),
kiosk, or touch tone telephone. Thus, the types E-banking services that delivered via
intelligent electronic devices are here stated as follows.

11
 2.4.1 Automated Teller Machine (ATM)
ATM is a machine where cash withdraw can be made over the machine without going in to
the banking hall. It also sells recharge cards and transfer funds, it can be assessed 24 hours/7
days with account balance enquiry (Fenuga, 2010). Rose (cited in Prince, 2015), describes
ATMs as follows: “an ATM combines a computer terminal, database system and cash vault
in one unit, permitting customers to enter the bank‟s book keeping system with a plastic card
containing a PIN or by punching a special code number into the computer terminal linked to
the bank‟s computerized records 24 hours a day”. It offers a great deal of banking services to
clients. However, as a result of the rapid increase in technology, ATMs go to the extent of
given accounts balances and bill payments. Banks use this E-banking device, to gain
competitive advantage. The combination of automation and human tellers gives more
productivity for the bank during banking hours (Prince, 2015).

2.4.2 Mobile Banking

Tiwari et al. (2007) state that Mobile banking is a term used for performing balance cheeks,
account transactions, payments credit applications and other banking transactions through a
mobile device such as a mobile phone or personal digital assistant (PDA). The mobile
banking services were offered over SMS, service known as SMS banking. Mobile banking is
used in many parts of the world with little or no infrastructure, especially remote and rural
areas. The scope of offered services may include facilities to conduct bank and stock market
transactions, to administrate accounts and to access customized information. In the study by
Fikerselassie (2017) Mobile banking is a system or platform in which customers are
automatically updated on any changes in their account. These changes are may come in the
form of account debits and credits or any charges to the account. All it needs for mobile
banking is a mobile phone with a well-functioning text messaging system. SMS banking falls
under this category. This system uses short text messaging system to inform customers of
their account.

2.4.3 Internet banking

In the Prince (2015) study, Internet banking is to give customers access to their bank
accounts via a web site and to enable them to enact certain transactions on their account,
given compliance with stringent security checks. Internet banking provides convenient and

12
flexible services to customers. It enables customers to transact almost all their banking
transactions online. One could check accounts, query the bank and also transfer funds to
other people on different accounts, it is the most financially savvy innovative method for
yielding higher profitability. Another feature of internet banking is that, it gives a 24/7 access
to customers. Furthermore Kwashie (2012) state internet banking services enable customers
to transfer funds, download and print statements, request for cheque book and savings
withdrawal booklet, establish and modify standing orders and make payments through the
internet.

2.4.4 Point of Sales (POS)

In the study Abebe (2016), POS is sometimes referred to as point of purchase (POP) or
checkout is the location where a transaction occurs. A "checkout" refers to a POS terminal or
more generally to the hardware and software used for checkouts, the equivalent of an
electronic cash register. A POS terminal manages the selling process by a salesperson
accessible interface. The same system allows the creation and printing of the receipt. POS
systems record sales for business and tax purposes.POS enhances customers to make
payment for goods and services without necessarily coming in contact with physical cash as
the purchase price would be debited on the buyer‟s card and credited on the seller‟s account
(Fikerselassie, 2017).

2.4.5 Personal Computer Banking

Personal Computer Banking is a sort of service which provides the bank's clients to access
their banking data through a restrictive system, through software installed on their personal
PC. By having access, the customer can perform a great deal of banking services. The
significance of PC proficiency has brought about expanding the utilization of PCs. This
positively bolsters the development of PC banking. Customers have access banking services
even at their homes and offices (Prince, 2015).

2.4.6 Agent Banking

A banking agent is a retail or postal outlet contracted by a financial institution or a mobile
network operator to process clients‟ transactions. Rather than a branch teller, it is the owner
or an employee of the retail outlet who conducts the transaction and lets clients deposit,
withdraw, and transfer funds, pay their bills, inquire about an account balance, or receive

13
government benefits or a direct deposit from their employer. Banking agents can be
pharmacies, supermarkets, convenience stores, lottery outlets, post offices, and many more.
Banking agents are usually equipped with a combination of POS card reader, mobile phone,
barcode scanner to scan bills for bill payment transactions, PIN pads, and sometimes
personal computers (PCs) that connect with the bank‟s server using a personal dial-up or
other data connection. Clients that transact at the agent use a Magnetic Stripe (Mag-Stripe)
bank card or their mobile phone to access their bank account or e-wallet respectively.
Identification of customers is normally done through a PIN. With regard to the transaction
verification, authorization, and settlement platform, banking agents are similar to any other
remote bank channel (Abebe, 2016).

2.4.7 CBE Birr

Commercial Bank of Ethiopia (CBE) officially launched its mobile money services dubbed
CBE Birr on December 11, 2017 after successfully testing its functionality for six months. It
is a mobile based banking whereby the bank selects, trains and authorizes agents to provide
banking services on behalf of the bank through a mobile phone. It is deployed as a means of
extending financial services to the unbanked segment of the public. Customers may no longer
need to travel long distances to visit CBE branch as they can get the service from the nearest
CBE agents through CBE Birr. A CBE Birr customer can deposit, withdraw, transfer money,
make payments, buy mobile airtime and pay bill using a mobile phone in a very simple and
convenient way (www.combanketh.et/CBE).

2.5 Benefits of E-Banking

E-banking service provides a lot of benefits both to the customer and the bank itself. It is
competitive branding and as well as better appreciation to the market demands. As such
banks that provide services are known to be leaders in technology implementation and
advancement. Thus, the better image brand they enjoy. The approach and adoption of the
informational technology by businesses has uprooted the constraint of time, distance and
communication making the globe really a little village. With E-banking customers can check
accounts, transfer money and can have access to numerous banking products and services
(Prince, 2015).

14
Now a day, it is unthinkable that the success of a banking system without information and
communication technology. It has enlarged the role of banking sector in the economy. The
financial transaction and payment can now be released quickly and easily. The banks with
the latest technology and techniques are more successful in the competitive financial market
by generating more and more profitability (Endalkachew, 2013).

E-banking offers benefits to banks as well. Banks can benefit from lower transaction costs as
E-banking requires less paperwork, less staffs and physical branches. E-banking leads to
higher level of customers‟ satisfaction and retention (Polatogu & Ekin, 2010).

E-banking has made common open doors for banks and businesses around the world, and
that is clear in the way they sort out financial transaction. Although opportunities to banks,
there are various difficulties such as the innovation of IT applications, the obscuring business
sector limits, rupturing modern boundaries, the passage of emerging competitors, and the
development of new plans of action (Liao & Cheung, cited in Prince,2015).

2.6 Issues associated with E-Banking

Hitesh (2015) stated some issues associated with internet banking. The researcher itemized
and described that for maintaining a high level of public confidence in internet banking,
sound management of banking products and services considerations, especially those
provided over the internet, holds the key. Components that help maintain a high level of
public confidence in an open network environment include issues as follows:

2.6.1 Legal and Regulatory issues

Internet banking spans across geographical boundaries. It enables its users to access it sitting
at any part of the globe. Thus, issues of jurisdiction of law, validity of electronic contract,
gaps in the legal or regulatory environment of different countries arises. Legal issues pose a
question that law of which geographical area shall be applicable in case of dispute. Another
issue is that of taxability on the income generated out of the electronic transactions. There are
still no definite answers to these issues.

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 2.6.2 Operational Issues
Operational risk is one of the most common forms of risk associated with internet banking. It
generally includes inaccurate processing of transactions, non-enforceability of contracts,
unauthorized access, data integrity compromises, data privacy and confidentiality.

2.6.3 Security Issues

Security of transactions is one of the most important issues in internet banking. Answering
the security issues preserve computing resources against abuse and unauthorized use, and to
protect data from accidental and deliberate damage, disclosure and modification. Security
risk arises on account of unauthorized access to a bank‟s critical information base. A breach
of security could result in direct financial loss to the bank. Loss of data, theft of or tampering
with customer information, disabling of a significant portion of bank‟s internal computer
system thus denying service, cost of repairing these may occur. The security aims to protect
data during the transmission in computer network and distributed system. The security
features may include encryption / decryption, firewalls, digital signature, anti-viruses etc.
Some of the risks that may be faced by the customers are sniffing and phishing. In sniffing
some unauthorized person sniffs or monitors the data transfer over the electronic means
without the knowledge of the real user. In the process of phishing, the victim is lured into
divulging personal and confidential financial details. Once these details are disclosed the
money is illegally withdrawn from the holder‟s account. In addition to external attacks banks
are exposed to security risk from internal sources i.e. employees. Employees are very much
familiar with whole system and their weaknesses, thus becoming a potential security threat to
the bank. Some of the major security related issues are authentication, non-repudiation and
confidentiality

2.6.4 Privacy Issues

Privacy issues may include the issues related to the individual and confidential account
information confidential. This can be done by unauthorized access and could emanate from
any source and from anywhere in the world with or without criminal intent. Internet banking
is done through the means of electronic communication. Thus, the data traveling on these
means becomes more vulnerable of being accessed by some unauthorized person and may
intrude into personal information.

16
 2.6.5 Strategic Issues
This issue is associated with the introduction of a new product or service. It depends upon
how well the bank has addressed the various aspects related to development of a business
plan, availability of sufficient resources to support this plan, credibility of the vendor (if
outsourced) and level of the technology used in comparison to the available technology etc.
This issue has imposed risk of failure for the product or services newly introduced. For
reducing such risk, banks need to conduct proper survey, consult experts from various fields,
establish achievable goals and monitor performance. Also, they need to do a cost benefit
analysis. Thoroughness is required in each of the areas. Besides this, periodic evaluations are
also required through feedback System.

2.7 Challenges of E-Banking in Ethiopia

Gardachew (2010) found in his study that the banking industry in Ethiopia is underdeveloped
and the study identified Key Challenges for E-Banking applications such as; low level of
internet penetration and poorly developed telecommunication infrastructure, lack of suitable
legal and regulatory framework for e-commerce and e-payment, high rates of illiteracy, high
cost of Internet, absence of financial networks that links different banks, lack of reliable
power supply, and Cyber security issues are the most important Challenges for development
of e-banking in Ethiopia.

In the study Agarwal and Josh (2016) the factors which affect customer satisfaction in E-
banking service in commercial bank of Ethiopia was identified. Such as, frequent breakdown
of ATM service, lack of convenience of E-banking service, under-development of
technological infrastructure, low level of relevant knowledge creation and innovation,
interruption of network, resistance to changes in technology among customers and service
providers as result of fear of risk, lack of fair distribution of E-banking service in all over
Ethiopia, long Queues are still seen at the banking hall, bank customers still handle too much
cash, and hardly do people talk about the E-banking products that are available commercial
bank of Ethiopia branches.

The study by Ayana (2010) explored the challenge of E-banking in Ethiopia. E-banking
system were not well adopted by Ethiopian banking industry due to low level of ICT
infrastructure and lack of legal frame work at NBE, which can initiate banking industry to

17
implement the system. Moreover, the study reported that security risk and lack of trust on the
use of technological adoption were other major barriers for the system. In addition, Abebe
(2016) also identified security risk, customer familiarity with the service, technical,
managerial and implementation skills of E-banking, maintenance capability up on failure,
promotion, public awareness, ICT infrastructures and low internet access as major challenges
of E-banking service.

Surafel (2016) identified that the Social and cultural barriers such as High rate of illiteracy,
less awareness and customer acceptance are the challenges of E-banking in Ethiopia. It is
logical that the low literacy level of computer can be a barrier in fast acceptance of internet
and that influence the customer to be away from electronic delivery channels. Furthermore,
Economic factors such as high cost of internet, low income and heavy investment and cost of
technology; Legal and security issues such as Cyber security issues and lack of suitable legal,
regulatory frame works of E-payment and restricted business; Management and banking
issues like Resistance to change in technology among staffs and customers and E-banking
possess risks and less proper Organization Structure; Infrastructural barriers like Low level of
internet penetration, weak telecommunication and frequent power interruption; Knowledge
barriers such as Lack of trust by customer, lack of technological knowledge and language
barriers were the identified challenges of E-banking in Ethiopia.

2.8 Opportunities of E-banking in Ethiopia

Surafel (2016) summarized the opportunity of E-banking from customer as well as banks
perspective. E-banking enable customers to access the banking through online. Therefore,
customers can operate their account remotely from anywhere. Moreover, customers can make
payment of utility bills via E-banking which is another major benefit technology because it
eliminates the need to stand in long queues for the purpose of bill payment. From the bank‟s
perspective, the concept of E-banking has immensely helped the banks in putting a tab over
their specific overheads and operating cost. Due to the fact that E-banking majority of
records under an E-banking set up are maintained electronically, E-banking ensured
transparency of transactions and facilitated towards removing the documentation
requirements to a major extent. Therefore, the technology enhances the banks to be more
competitive.

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 2.9 Customer Satisfaction

Customer Satisfaction is to degree at which the product or services rich the standard of the
buyer in his or her expectations. Thus, most researchers agree that satisfaction is attitude or
evaluation that is formed by the customers by comparing what they expect to receive to their
subjective perceptions of the performance of they actually get (Oliver, 1980; Parasuraman
et.al, 1988).

Parasuraman, Zeithaml and Berry (1988) found that customer satisfaction is thought to result
from the comparison between predicted service and perceived service, whereas service
quality refers to the comparison between desired service and perceived service. However,
affective states and perceived performance have been shown to be strong and direct
determinants of both customer satisfaction and service quality of the service encounter.

Customer satisfaction is the degree to which a customer perceives that an individual, firm or
organization has effectively provided a product or service that meets the customer „s needs in
the context in which the customer is aware of and/or using the product but is a socially
constructed response to the relationship between a customer, the product and the product
provider/maker. To the extent that a provider/maker can influence the various dimensions of
the relationship, the provider can influence customer satisfaction (Reed et al., 1997). As
many of the authors discussed above, expectation exerts significant influence on customer
satisfaction. Thus, understanding what customers expect from a service giving organization
is necessary to achieve customer satisfaction. For an organization that desires to keep its
customers loyal, needs a continuous expectation assessment and should narrow those gaps.

According to Kotler and Keller (cited in Surafel, 2016) many companies are systematically
measuring how well they treat customers, identifying the factors shaping satisfaction, and
changing operations and marketing as a result. Wise firms measure customer satisfaction
regularly, because it is one key to customer retention. A highly satisfied customer generally
stays loyal longer, buys more as the company introduces new and upgraded products, talks
favorably to others about the company and its products, pays less attention to competing
brands and is less sensitive to price, offers product or service ideas to the company, and costs
less to serve than new customers because transactions can become routine.

19
 2.10 Service Quality (SERVQUAL) model

Service quality has been defined as the difference between a customer‟s expectation of a
service and his/her perception of the service‟s performance. SERVQUAL stands for service
quality and is a service quality measuring tool or model that is used to measure the gap
between customer expectation and experience. When expectations are not meet, customers
tend to get dissatisfied with the quality of satisfied and further still when expectation are
exceeded, the quality of service is perceived to be exceptional (Simon, 2016).

Parasuraman, Zeithaml, and Berry (1985) have developed the ten determinants of Service
quality model for measuring service quality on the basis of study on four service sectors;
retail banking, credit card services, repair and maintenance of electrical appliances, and long-
distance telephone services. Such dimensions are Reliability, which involves consistency of
performance and dependability; Responsiveness, it concerns the willingness or readiness of
employees to provide service; competence, means possession of the required skills and
knowledge to perform the service; courtesy, involves politeness, respect, consideration, and
friendliness of contact personnel; communication, means keeping customers informed in
language they can understand and listening to them; credibility, it involves trustworthiness,
believability, honesty; security, mean the freedom from danger, risk, or doubt which involves
physical safety, financial security, confidentiality; access, it involves approachability and
ease of contact; Understanding/Knowing the Customer, which involves making the effort to
understand the customer's needs; and tangibles which include the physical evidence of the
service.

The ten dimensions service quality Model originally by Parasuraman, Zeithaml, and Berry
(1985) was reduced to five due to as some of them were overlapping. Thus, out of the ten
dimensions, three of them remained intact: tangibility, reliability and responsiveness. The
seven remaining dimensions were included in two others: assurance and empathy. Assurance
encompasses competency, courtesy, credibility and safety whereas access, communication
and comprehension of the user merged into empathy. The analysis of these five dimensions
demonstrated that users were using them as criteria for judging the quality of service. The
dimensions are not mutually exclusive, yet provide an important framework for

20
understanding the expectations of users, and issues that delineate the service from the point
of view of those who will judge it.

Therefore, in this study SERVQUAL model is used to measure to service quality of E-

banking provided by selected banks towards their customer satisfaction.

Parasuraman, Berry and Zeithaml (1988) categorized service quality into five dimensions
namely: reliability, tangibles, responsiveness, assurance, empathy whose descriptions are
defined below.

2.10.1 Reliability
It refers capability to deliver service as promised that translated into the ability of the
supplier to execute the service in a safe and efficient manner. It depicts the consistent
performance, free of non-compliance, on which the user can trust. The supplier must comply
with what was promised, without the need for rework. It involves two concepts,
dependability and uniformity in performance. Zeithaml and Bitner ( cited in Surafel, 2016)
advised that customers should be specifically influenced by the reliability of new technology
because they might be associated with risks such as the technology malfunctioning.

2.10.2 Responsiveness
It means the willingness to help customers and to provide prompt service. It refers to the
availability of the provider to attend voluntarily to users, providing a service in an attentive
manner, with precision and speed of response. It concerns the availability of employees of
the institution to assist users and provide the service promptly.

2.10.3 Assurance
Parasuraman et al. (1985) defined assurance as knowledge and courtesy of employees and
their ability to inspire trust and confidence. According to Sadek et al. (2010), in British banks
assurance means the polite and friendly staffs, provision of financial advice, interior comfort,
eases of access to account information and knowledgeable and experienced management
team.

2.10.4 Empathy
Parasuraman et al. (1985) defined empathy as the caring and individual attention the firm
provides its customers. It involves giving customers individual attention and employees who

21
understand the needs of their customers and convenience business hours. It related to whether
the organization cares for the user and assists him in an individualized manner, referring to
the ability to demonstrate interest and personal attention. Empathy includes accessibility,
sensitivity and effort in understanding the needs of users.

2.10.5 Tangibility
Parasuraman et al. (1985) defined tangibility as the appearance of physical facilities,
equipment, personnel, and materials that can be perceived by the five human senses. It refers
the Outlook of physical equipment and communication resources.

2.11 Relation between customer satisfaction and service quality

In the era of stiff competition of the banking industry, both private and state banks are in the
game of market arena in terms of providing service quality in every aspect of their
competitive strategies because the awareness of their customers are developed in selecting
whose bank provides better quality of services as per the satisfaction level they expected to
achieve so that different banks designed winning strategies of rendering best service quality
to enhance their customer satisfaction over existing competitors in the market rivalry
(Surafel, 2016).The relationship between expectation, perceived service quality and
customers satisfaction have been investigated in a number of researches (Zeithaml et al,
1988). They found that, there is very strong relationship between quality of service and
customer satisfaction (Parasuraman et al, 1985; 1988).

The higher level of perceived service quality results in increased customer satisfaction. When
perceived service quality is less than expected service quality customer will be dissatisfied
(Jain & Gupta, 2004).

Research has indicated that service quality has been increasingly recognized as a critical
factor in the success of any business (Parasuraman et al., 1988), and the banking industry in
this case is not exceptional. Parasuraman et al. (1988) found that the performance of the
service provider on core and relational dimensions of services was an important driver for
customer satisfaction in retail banking.

22
 2.12 Relationship between E-Banking and customer satisfaction

Many banks consider technology as a route for service quality improvements, while others
consider it as a cost-effective new service delivery tool whatever the underling strategy
nobody questions the importance of technology and adoption by banks. Moreover, it is
important to assess how customer find themselves, among these technologies from ATMs to
Mobile banking, Internet banking and POS terminals) and can meet real customer needs
(Surafel, 2016).

Aghaei, Biglar, Jamshidian and Asadollah (cited in Prince, 2015), using 384 customers in
Tehran investigates the effect of E-banking on customer satisfaction finds a positive
relationship between E-banking services provided by the surveyed banks and customer
satisfaction. A positive correlation between customers‟ income and satisfaction of electronic
banking services is found. Customers‟ positive experience with electronic banking is
positively related to electronic banking customer satisfaction.

The study conducted by Saha and Siddiqui (cited in Surafel, 2016) also revealed that overall
senior customer satisfaction level is poor which can be improved by the bank through
enhancing the quality of their IT based services. During the study it is also observed that
customers‟ evaluation of E-banking service is affected by their experience in using modern
technology of banking system this investigation indicated that demographic characteristics
have relationship with IT based service in the banking industry in terms of age, occupation
and education of the customers who use electronic banking which illustrated the higher the
user of the technology were early age, educated and in good status of occupation. Beside this
modern technology can help the banks to achieve higher level of customer satisfaction. The
technology alone doesn‟t guarantee success because customer satisfaction would be based
largely on how customers perceive services performance relative to their expectations.

2.13 Empirical Review

Jannatul (2010) on his part of study on the impact of variables of E-banking on customer
satisfaction in Bangladesh, used the five service quality dimensions namely reliability,
assurance, responsiveness, empathy and tangibles are established based on SERVIOUAL
model. The results of the study indicated that the factors are the major service quality
dimension for customer satisfaction in E-banking and the three variables reliability,
23
responsiveness and assurance have more contribution to satisfy the customers of e-banking in
Bangladesh.

The study of Hitesh (2015) conducted a research on customer Satisfaction and E-Banking
services in a Case Study of Tricity that the service quality dimensions such as
Responsiveness tangibility, assurance, empathy and reliability have shown more or less a
great impact on customer satisfaction with internet banking services.

Areeba et al. (2016) conducted a study to assess The Impact of E-Banking on Customer
Satisfaction in the banking sector of Pakistan. The study uses the five dimensions of service
quality (tangibility, reliability, responsiveness, assurance and empathy). The result of the
study showed that the three service quality dimensions (Reliability, Responsiveness and
Assurance) have significant correlation with customer satisfaction whereas Tangible and
Empathy not have significant relation with customer satisfaction.

In the study Abebe (2016) entitled on opportunities and challenges in the adoption of E-
banking services case in Dashen bank, the results of the study showed that the major
obstacles of Ethiopian banking industry faces in the adoption of E-banking are security risk,
customer familiarity with the service, technical, managerial and implementation skills of E-
banking, maintenance capability up on failure, promotion, public awareness, ICT
infrastructures and low internet access as major challenges in adoption of E-banking service
in Dashen bank.

Simon (2016) on his part of study on E-Banking Service Quality and Its Impact on Customer
Satisfaction in State Owned Banks in East Gojjam Zone Ethiopia, used the five service
quality dimensions namely reliability, assurance, responsiveness, empathy and tangibles are
established based on SERVIOUAL model. The results of this study indicated that, except
assurance the four service quality dimensions (tangibility, reliability, responsiveness and
empathy) have positive and significant effect on customer satisfaction. The finding of this
study also indicates that customers were most satisfied with the responsiveness dimensions of
E-Banking service quality.

A study conducted by Fikerselassie (2017) concluded that service quality and security/
privacy are the major factors that strongly lead to customer satisfaction of the e-banking

24
customers whereas reliability, Ease of use, time of deliver and Access are the four
dimensions which have been insignificant impact on the customer satisfaction thus their
result runs contrarily to that of Bateson (1985) and Bowen (1986) who indicated that Access,
Reliability, ease of use, and time of delivery are significant on customer satisfaction.

2.14 Conceptual Framework

The conceptual framework of the study shows that how the SERVQUAL dimensions:
Reliability, Responsiveness, Tangibility, Assurance and Empathy variables of the study have
effect on the Customer satisfaction. The independent variables are the SERVQUAL
dimensions whereas customer satisfaction is the dependent variable. The five SERVQUAL
model has originally developed by Parasuraman et al. (1988). The conceptual frame work of
this study is adopted from Simon (2016).

Independent Variables Dependent Variable

Reliability

Responsiveness
Customer
Assurance
Satisfaction
Empathy

Tangibility

Figure 2.1: Conceptual Framework of the study

Source: (Simon, 2016)

25
 CHAPTER THREE

RESEARCH METHODOLOGY

3. Introduction

This chapter described the methodology the researcher adopted in carrying out the study.
According to Sharma (cited in Prince, 2015), “methodology refers to as system of principles
and methods of organizing and constructing theoretical and practical activity. Therefore, this
section framework the description of study area, the research approach, research design,
target population, sampling techniques, sample size, data collection and measurement,
validity and reliability test and ethical consideration.

3.1 Description of Study Area

The research was focused on E-Banking service users of commercial bank of Ethiopia Arba
Minch Branches. Arba Mich is the capital of the Gamo Goffa Zone at SNNP which is located
at 505 km South West of Addis Ababa. Based on Arba Minch town administration (2018)
report, the population of Arba Minch town in 2017/18 is 119,287 with the proportion of male
62,379 and female 56,908. Currently, the town has one public commercial bank and 13 privet
commercial banks. The banks are commercial bank of Ethiopia, Awash International Bank,
Dashen Bank, Birhan International Bank, Abay Bank, Wegagen Bank, Abyssinia Bank, Buna
International Bank, Nib International Bank, Oromia International Bank, Anbessa
International Bank, Oromia Cooperative Bank, Debub Global Bank and United Bank. The
current total customers of Arba Minch town commercial bank of Ethiopia are 105,591 of
which 36,385 are E-banking users on the month June 2018(Own survey from CBE
Branches).

3.2 Research Approach

The study used quantitative research approach. The quantitative research approach makes use
of statistics and numbers which are mostly presented in figures. Quantitative research
involves large samples and planned questionnaire that is then numerically and statistically
analyzed (Areeba et al., 2016). The quantitative data enables the researcher to analyze
objectively by using descriptive and inferential statistics.

26
 3.3 Research design

This study used an explanatory research design that helps the researcher to identify the nature
of the relationship between the E-banking service quality (independent variables) and
customer satisfaction (the dependent variables) at Arba Minch town commercial banks. An
explanatory research design aids the researcher to determine and explain the characteristics
of dependent as well as independent variables (Saunders, et al., 2009).

3.4 Target population

The study target population includes E-banking users of commercial bank of Ethiopia at four
branches such as Arba Minch, Secha, Sikela and Nechsar. The reason why the researcher
chooses these branches was that these branches consists a large number of customers than
other commercial banks‟ branches in Arba Minch town. The total number of customers of the
four-branches were 105,591 out of them 36,385 were E-banking users on the month June
2018(Own survey from CBE Branches).

3.5 Sampling Technique

To select participants to the study convenience sampling technique was used because it was
not possible to get access to the list of E-banking customers to conduct probability sampling
procedure. As a procedure, each respondent asked that whether he/she was the customers and
the banking user of the selected branch before the questionnaire distribution.

Convenience sampling is a non-probability sampling technique where subjects are selected

because of their convenient accessibility and proximity to the researcher (Black et al, cited in
Fikerselassie, 2017). Saunders et al. (2009) described about convenience sampling that it
involves selecting haphazardly those cases that are easiest to obtain for your sample and the
sample selection process is continued until your required sample size has been reached. It is a
sampling technique where samples are obtained from convenient elements. This refers to
happening of the element at the right place at the right time, that is, where and when the
information for the study is being collected. The selection of the respondents is left to the
discretion of the interviewer.

27
 3.6 Sampling Size

Israel (1992) reviewed criteria for specifying a sample size and present several strategies for
determining the sample size. The approaches to determining the sample size include using a
census for small populations, imitating a sample size of similar studies, using published
tables, and applying formulas to calculate a sample size (Israel, 1992). Israel (1992)
published sample size determination formula was used to determine samples for the study.
Based on the published table, the sample size of the total target population 36,385 of this
study was 204 E-banking customers (See the published table in Appendix 7).

The proportion of each branch‟s sample size was determined based on the number of E-
banking customers (see Table 3.1).

Table 3.1
CBE Arba Minch branches with proportion of sample size

Total No of
Total
S.No Name of CBE Branches E-baking Sample Size
customers proportion

1 CBE Arba Minch 19,747 54% 111

2 CBE Shecha 7,299 20% 41
3 CBE Sikala 6,826 19% 38
4 CBE Nechi Sar 2,513 7% 14
Total 36,385 100% 204

Source: Own Survey, 2018

3.7 Data collection and Measurement

The primary data for this study collected through structured close-ended questionnaire. The
structured questionnaire was anchored on 5-point Likert type scale with the following degree
of response: Strongly disagree, Disagree, Moderately Agree, Agree and Strongly agree. The
use of Likert scale was to make it easier for respondents to answer question in a simple way.
The questionnaire was classified in to three parts. The first part of the questionnaire was
about the demographic characteristics of respondents. The second part was intended to
measure the E-banking service quality and the third section was measure customers‟
satisfaction on E-banking service delivery. The E-banking service quality instrument had five

28
sub scales, SERVQUAL dimensions, such as: Reliability, Responsiveness, Tangibility,
Assurance and Empathy. The SERVQUAL model was developed by Parasuraman, Zeithaml
and Berry (1998). The researcher adopts survey instrument used by Areeba et al. (2016),
Hitesh (2015), and Sang-Lin and Seung (2004) with some modification to fit the study under
investigation.

The collection process was started with asking permission of manager of the respective banks
which selected for the study. Following the permission, the volunteering E-banking
customers were selected using the convenience sampling techniques. Based on convenience
sampling techniques the researcher checked whether the respondent was the selected CBE
branch‟s E-banking service user or not.

3.8 Data Analysis and Model Specification

The collected data was coded and entered into Statistical Package for Social Science (SPSS)
software version 20. Both descriptive and inferential statistical was used for data analysis.
The descriptive statistics analysis results were shown by frequency distribution, percentages,
mean and standard deviation whereas correlation and multiple regression analysis were used
to show inferential statistical analysis.

Descriptive analysis was used to describe the data that was collected from questionnaires in
the form of frequency, percentage and tabulation form. Additionally, correlation and multiple
regression analysis were conducted to explain the relationship and effect of the independent
on customer satisfaction in E-banking service.

The researcher used multiple regression model to determine significance level of the
variables towards E-banking induced customer satisfaction.

Customer satisfaction = f (E-banking five service quality dimensions)

CUS_SAT = α +β1REL + β2RES + β3ASS + β4 EMP + β5 TAN + ε

Where:
CUS_SAT= Customer satisfaction
REL= Reliability
RES= Responsiveness
ASS= Assurance

29
 EMP= Empathy
TAN= Tangibility
Thus α (alpha) is constant, is a constant, represents the customer satisfaction when
every independent variable are zero
β(beta) is coefficient of estimate,

ε is the error term,

CUS_SAT is dependent variable and
REL, RES, ASS, EMP and TAN are independent variables.

3.9 Validity

It refers to the extent to which an empirical measure adequately reflects the real meaning of
the concept under consideration. Validity refers to the degree to which a statistical instrument
measures what it is intended to measure. It emphasizes the accuracy of a measurement
instrument (Saunders, et al., 2009).

Therefore, this study ensured the validity through extensive literature review and adopted the
five SERVQUAL model instruments which originally developed by Parasuraman et al.
(1988) and used in previous researchers (Areeba et al., 2016; Surafel, 2016; Simon, 2016 and
Gezahegn, 2015).

3.10 Reliability

Reliability refers to the extent to which your data collection techniques or analysis
procedures will yield consistent findings. It focuses on whether the research method and
design is accurate (Saunders, et al., 2009). The reliability test is an important instrument to
measure the degree of consistency of an attribute which is supposed to measure. It measures
the internal consistency of the items in a scale.

The normal range of Cronbach‟s coefficient alpha value ranges between 0-1 and the higher
values reflects a higher degree of internal consistency.

The reliability test indicates that the extent to which the items in a questionnaire are related to
each other. Cronbach's alpha is one of the most commonly accepted measures of reliability.

30
The most commonly accepted value of Cronbach's alpha is 0.70 as it should be equal to or
higher than to reach internal reliability (Eskandarpour, 2016).

Table 3.2
Reliability of the study instrument

Dimension N of Items Cronbach’s alpha Remark

Reliability 5 0.835 Reliable

Responsiveness 4 0.769 Reliable
Assurance 4 0.792 Reliable
Empathy 5 0.753 Reliable
Tangibility 4 0.735 Reliable
Customer satisfaction 6 0.783 Reliable
Note: SPSS result for each item is presented in Appendix 2. Source: own Survey, 2018
The above table 4.1 reliability of this study instrument result shows that, the coefficient of
each item Cronbach‟s alpha was greater than 0.7 so that the instrument was reliable.

3.11 Ethical Considerations

The researcher was submitted supporting letters from Arba Minch university school of
graduate studies to selected commercial banks and had got permit before the commencement
of the research. During the collection of data via questionnaires, each respondent was first
informed about the objective of the study whereas the ethical issues such as privacy,
anonymity of respondents, confidentiality and voluntarism were considered.

31
 CHAPTER FOUR

RESULTS AND DISCUSSION

4. Introduction

The purpose of this chapter is to present the statistical outcome of the research. It contains
three sections: Descriptive Statistical Analysis, Pearson Correlation Analysis and Multiple
Regression Analysis of .

The questionnaires were distributed to 204 E-banking service users of the four CBE Arba
Minch branches namely: Arba Minch, Secha, Sikela and Nechsar branches. Then, it was
collected and analyzed successfully without any missing.

4.1 Descriptive Statistical Analysis

The study was used descriptive statistical analysis to describe the demographic profile, E-
banking service quality dimensions (IV) and customer satisfaction (DV).

4.1.1 Descriptive Statistics of Demographic Profile

Table 4.1
Respondents‟ Age, Gender, Educational and Occupational profiles

Age N M Min Max

Average 204 29.23 20 44
Gender Frequency Percentage
Female 89 43.6
Male 115 56.4
Educational Frequency Percentage
Secondary 5 2.5
Diploma 35 17.2
First Degree 112 54.9
Masters and Above 52 25.5
Occupation Percentage Percentage
Public sector 91 44.6
Private sector 61 29.9
Own Business 47 23
Others 5 2.5

Source: Own Survey, 2018

32
The above table 4.1 shows that, among 204 respondents, the mean value of age was 29
years whereas 20 and 44 years was the minimum and maximum respondents‟ age
respectively. This result implies that the more respondents of this studies were
youngsters.

Different studies also indicate that, youngsters are more closed to technology than
others age groups so that, the bank should have to go different age groups in order to
duplicate its service. For instance, Fikerselassie (2017) and Surafel (2016) that they
found that youngsters are more users of E-banking services.

Regards to the gender, 56.4% were male and 43.6% were female respondents. This
implies that the majority of this sampled respondents were males. This results also
supported by previous researchers (Kwashie, 2012; Fikerselassie, 2017 and Simon,
2016) on the same topic that their finding were male E-banking customers took the
majority.

In the case of education level 54.9% of the respondents were first degree holders, 25.2
% were master‟s degree and above, 17.2% were diploma holders and 2.5% were at
secondary educational level. This implies that the reason large numbers of respondents
were first degree holders and master‟s degree and above that E-banking service needs
to more skills of computer as well as internet technology.

In respect to occupation side, out of the total respondent‟s public sector employees
were 44%, private sector employees represented in 29.9%, business man and others
accounted for 23% and 2.5% respectively. This implies that most of the respondants
that CBE have public sector employees.

According to the researcher view, this result was recorded due to the fact that most of
the public sector employees‟ salary was paid through CBE E-banking channel and also
the CBE‟s capacity and capability of resources placed at leading position with good
public image.

33
Table 4.2
Respondents‟ Income, Marital Status and Experience profiles

Income Frequency Percentage

Below Birr 2000 5 2.5
Br 2001-5000 81 39.7
Br 5001-9000 86 42.2
Br 9001 & Above 32 15.7
Marital Status Frequency Percentage
Single 116 56.9
Married 83 40.7
Widow 5 2.5
Experience N M Min Max
Average 204 3 1 5
Total 204 100
Source: Own Survey, 2018

Table 4.2 indicated that, 2.5% of the respondents had earned monthly income of less than br.
2,000, 39.7% were in the income between br.2,001-5,000, 42.2% were in the income
between br.5,001- 9,000 and 15.7% of respondents were earned monthly income above br.
9,000. In the case of marital statues 56.9 % of respondents were single, 40.7% were married
and 2.5% were widow. This result shows that the most of respondents of E-banking service
users were single or youngsters.

Regarding to respondents‟ experience on E-banking service, the mean value of experience

was 3 years whereas 1 and 5 years was the minimum and maximum respondents‟ experience
respectively. This result indicates that, although the CBE introduced E-banking services at
2001, most of respondents of E-banking customers have 3 years‟ experience with E-banking
service.

4.1.2 Descriptive Statistics of E-banking Service Quality Dimensions

Descriptive statistical analysis provided the mean and standard deviation for each variable in
order to depict the level of agreement on E-banking service quality and customers
satisfaction dimensions. The mean and standard deviation were calculated for the interval
scale of independent variables (Reliability, Responsiveness, Assurance, Empathy and
Tangibility) and dependent variables (Customer Satisfaction). The mean indicates to what

34
extent the sample group averagely agrees or does not agree with the different statements
whereas standard deviation shows the variability of an observed response from a
single sample.

All the questions related with both the dependent and independent variables of this research
were prepared using a Likert scale in the form of ordinal scale. But for the sake of simplicity
of analysis the variables transformed into interval scale leading the researcher to obtain a
single variable for the six constructs based on Al-Sayaad et al. (2006) which summarized as
follows.

Scaled Likert Criterion

Mean range Response Option
1 to 1.80------- Strongly disagree
1.8 to 2.6------ Disagree
2.6 to 3.4------- Neutral
3.4 to 4.20----- Agree
4.2 to 5.00----- Strongly Agree

The following tables present the mean scores and standard deviation of individual
characteristics of E-banking service quality dimension namely: Reliability, Responsiveness,
Assurance, Empathy and Tangibility.

Reliability

Table 4.3
Respondents response on Reliability Dimension
Reliability Dimension N M SD
E-banking is reliable 204 3.882 0.7467
E-banking system performs the service right the first time. 204 3.897 0.7651
The E-Banking system not fails to deliver what
204 4.029 0.7554
promised/ordered
I prefer using E-banking instead of visiting branch for
204 4.108 0.4528
making my transaction
E-banking delivers accurate transaction services as I
204 4.152 0.4877
desired
Average Reliability Dimension 204 4.014 0.3498

35
Source: Own Survey, 2018

Table 4.3 above results shows the level of agreements of the respondents towards E-banking
service on reliability dimension. The dimension‟s result was ranged from the lowest mean
3.88 (E-banking system performs the service right the first time.) to the highest mean 4.15
(E-banking delivers accurate transaction services as I desired). Thus, the average level of
agreements of the respondents on reliability dimension scored 4.01 mean with 0.35 of
standard deviation; it is within the range of 3.4 to 4.20. This implies that most of the
respondents agreed on the reliability of E-banking service.

Responsiveness

Table 4.4
Respondents response on Responsiveness Dimension

Responsiveness Dimension N M SD
Response of service through e-banking is very prompt and
204 4.191 0.7073
quick
My Bank‟s E-Banking facility makes accurate promise
204 4.24 0.7664
about the service they deliver
The CBE‟s E-banking employees/Help desks are always
204 4.51 0.5011
willing to help me.
I always get the detail of my account through Electronic
204 4.27 0.4449
device
Average Responsiveness Dimension 204 4.303 0.3329
Source: Own Survey, 2018

Table 4.4 above, results shows the level of agreements of the respondents towards E-banking
service on responsiveness dimension. The dimension‟s result was ranged from the lowest
mean 4.19 (Response of service through e-banking is very prompt and quick) to the highest
mean 4.51 (The CBE‟s E-banking employees/Help desks are always willing to help me).
Thus, the average level of agreements of the respondents on responsiveness dimension
scored 4.30 mean with 0.33 of standard deviation; it is within the range of 4.2 to 5. This
implies that most of the respondents were strongly agreed on the responsiveness of E-
banking service.

36
Assurance

Table 4.5
Respondents response on Assurance Dimension
Assurance Dimension N M SD
I feel safe and secure while making transactions through E-
204 4.181 0.4775
banking service
My E-Banking site does not share my personal information with
204 3.99 0.5344
other sites
The behaviour of E-banking employees of CBE instils
204 3.912 0.8376
confidence in customer
The CBE‟s E-banking employees/Help Center have enough
204 3.931 0.8034
knowledge to answer my questions
Average of Assurance Dimension 204 4.004 0.4163
Source: Own Survey, 2018

The Table 4.5 above, results shows the level of agreements of the respondents towards E-
banking service on assurance dimension. The dimension‟s result was ranged from the lowest
mean 3.91 (The behaviour of E-banking employees of CBE instils confidence in customer) to
the highest mean 4.18 (I feel safe and secure while making transactions through E-banking
service). Thus, the average level of agreements of the respondents on assurance dimension
scored 4.00 mean with 0.41 of standard deviation; it is within the range of 3.4 to 4.20. This
implies that most of the respondents were agreed on the assurance of E-banking service.

Empathy

Table 4.6
Respondents response on Empathy Dimension
Empathy Dimension N M SD
When I get a problem, Bank shows a sincere interest in solving it 204 3.887 0.4571
I get personal attention from bank employee, if need of contact
204 3.853 0.5684
arises
E-banking Help desk operating hours is convenient to me 204 3.907 0.5581
The E- banking technical experts are ease to access 204 3.892 0.4636
Employees of Bank understand my specific needs 204 3.863 0.7629
Average of Empathy Dimension 204 3.88 0.3313

37
Source: Own Survey, 2018

The Table 4.6 above, results shows the level of agreements of the respondents towards E-
banking service on empathy dimension. The dimension‟s result was ranged from the lowest
mean 3.85 (I get personal attention from bank employee, if need of contact arises) to the
highest mean 3.91 (E-banking Help desk operating hours is convenient to me). Thus, the
average level of agreements of the respondents on empathy dimension scored 3.88 mean with
0.33 of standard deviation; it is within the range of 3.4 to 4.20. This implies that most of the
respondents were agreed on the empathy of E-banking service.

Tangibility

Table 4.7
Respondents response on Tangibility Dimension

Tangibility Dimension N M SD

E-banking service devices (ATM, POS, Web site, mobile

204 3.75 0.4975
and PC) are easy to use and navigate.
E-banking service has up-to-date equipment & technology 204 3.76 0.7995
The E-banking physical facilities are visually appealing 204 3.75 0.6209
E-banking device makes you find valuable information
204 3.74 0.6149
easily.

Average of Tangibility Dimension 204 3.75 0.3079

Source: Own Survey, 2018

The Table 4.7 above, results shows the level of agreements of the respondents towards E-
banking service on tangibility dimension. The dimension‟s result was ranged from the lowest
mean 3.74 (E-banking device makes you find valuable information easily) to the highest
mean 3.76 (E-banking service has up-to-date equipment & technology). Thus, the average
level of agreements of the respondents on tangibility dimension scored 3.75 mean with 0.31
of standard deviation; it is within the range of 3.4 to 4.20. This implies that most of the
respondents were agreed on the tangibility of E-banking service.

38
 4.1.3 Descriptive Statistics of Customer satisfaction

Table 4.8
Respondents response on Customer Satisfaction Dimension
Customer Satisfaction Dimension N M SD
I am satisfied with E-banking service that is provided by the bank 204 4.51 0.5011
I'm satisfied with E-banking ability to perform the
204 4.015 0.6545
promised/ordered service dependable and accurately
I'm satisfied with the willingness of Help desks and the very
204 3.75 0.5798
prompt and quick service of E-banking
I'm satisfied with the knowledge and courtesy of E-banking
employees to convey trust and confidence, and E-banking 204 4.005 0.3366
service safety and security
I'm satisfied with accessibility, sensitivity and effort in
204 3.927 0.7875
understanding of my specific needs by E-banking employees
I'm satisfied with the physical facilities, modernity, easy to use
204 4.235 0.4252
and visual appearance of E-banking service devices
Average Customer Satisfaction Dimension 204 4.074 0.3113
Source: Own Survey, 2018

The Table 4.8 above, results shows the level of agreements of the customer satisfaction on E-
banking service. Thus, the average level of agreements of the respondents‟ satisfaction on E-
banking service scored 4.07 mean with 0.31 of standard deviation; it is within the range of
3.4 to 4.20. This implies that most of the respondents were satisfied on E-banking service.

4.2 Pearson Correlation Analysis

According to Hinkle et al. (2003) the rule of thumb for interpreting the size of a correlation
coefficient is as indicated in table 4.9 below.

Table 4.9
Thumb Rule for Interpreting the Size of a Correlation Coefficient
Size of Correlation Interpretation
.90 to 1.00 (-.90 to -1.00) Very high positive (negative) correlation
.70 to .90 (-.70 to -.90) High positive (negative) correlation
.50 to .70 (-.50 to -.70) Moderate positive(negative) correlation
.30 to .50 (-.30 to -.50) Low positive (negative) correlation
.00 to .30 (-.00 to -.30) Little if any correlation
Source: (Hinkle et al., 2003)

39
Table 4.10 below presents the results of Pearson correlation on the relationship between
service quality dimension (independent variables) and customer satisfaction (Dependent
variable).

Table 4.10
The Relation between independent and dependent Variables
No. M SD 1 2 3 4 5 6
1 Reliability 4.01 .35 1
**
2 Responsiveness 4.30 .33 .491 1
3 Assurance 4.00 .42 .767** .345** 1
4 Empathy 3.88 .33 .579** .312** .650** 1
5 Tangibility 3.75 .31 .398** .429** .425** .398** 1
6 CUS_ SAT 4.07 .31 .787** .582** .774** .652** .542** 1
**. Correlation is significant at the 0.01 level (2-tailed).
N:204

The above table 4.10 shows that all service quality dimensions have positive and significant
correlation with customer satisfaction at level P<0.01 and varying degrees of coefficient
depending on the type of service quality attributes that contain. Thus, reliability and customer
satisfaction has high positive correlation coefficient (0.787); followed by assurance (.774).
Empathy has moderate positive correlation coefficient (.652); followed by responsiveness
and tangibility with correlation coefficient of (0.582) and (0.542) respectively.

The results of Pearson correlation indicate that, there is positive and strong relationship
between service quality dimensions and customer satisfaction listed as reliability and
customer satisfaction, responsiveness and customer satisfaction, assurance and customer
satisfaction, empathy and customer satisfaction, tangibility and customer satisfaction. In
general, table 4.10 shows that, the service quality dimensions have a positive and significant
associate with customer satisfaction.

40
 4.3 Multiple Regression Analysis

The multiple regression analysis enables you to assess the strength of relationship between a
numerical dependent variable and two or more numerical independent variables. Calculating
a multiple regression coefficient and regression equation using two or more independent
variables is termed multiple regression analysis. The coefficient of determination
(represented by R2) can take on any value between 0 and +1. It measures the proportion of
the variation in a dependent variable that can be explained statistically by the independent
variables (Saunders et al., 2009).

The Multiple regression analysis can also be used to predict the values of a dependent
variable given the values of one or more independent variables by calculating a regression
equation. Before executing multiple regression analysis, the multiple regression assumptions
should be considered.

4.3.1 Assumptions of Multiple Regression

Multiple regression is one of the fussier of the statistical techniques. It makes a number of
assumptions about the data, and it is not all that forgiving if they are violated. The following
summary of the major assumptions were taken and tested for this study.

Assumption 1 - Sample Size Test

The issue at stake here is generalizability. That is, with small samples you may obtain a result
that does not generalise (cannot be repeated) with other samples. If your results do not
generalise to other samples, then they are of little scientific value. Different authors tend to
give different guidelines concerning the number of cases required for multiple regression.
Tabachnick and Fidell (cited in Pallant, 2005) give a formula for calculating sample size
requirements, taking into account the number of independent variables that you wish to use:
N > 50 + 8m (where m = number of independent variables). Thus, the present study consists
5 independent variables; 50+8(5) =90 which is less than observed respondents/sample size/.
i.e. 50+ 8(5) = 90 < 204. Based on the criteria, the sample size exceeds the minimum to run
the standard multiple linear regression.

41
Assumption 2 - Normality Test

To check whether the residuals have a normal distribution, the normal probability plot or
normal P-P of regression standard residual and histogram should be used. Scores on each
variable should be normally distributed. This could be checked by inspecting the histograms
of scores on each variable. Therefore, the scattered plots of residuals against each service
quality dimensions and customer satisfaction dimension were analyzed and the test results of
this study as illustrated on Figure 2 below show that the study‟s residuals were normally
distributed.

Figure 4.1: Normality Test Result Source: Own Survey, 2018

Assumption 3 Linearity Test

The relationship between the two variables should be linear. This means that when you look
at a scatterplot of scores you should see a straight line (roughly), not a curve. The test results
which illustrated on Figure 3 below show that there was a linear between the two variables.

42
Figure 4.2: Linearity Test Result Source: Own Survey, 2018

Assumption 4 Homoscedasticity Test

Homoscedasticity mean the variance of the residuals is constant. Homoscedasticity is the

assumption that the variation in the residuals (or amount of error in the model) is similar at
each point across the model. In other words, the spread of residuals should be fairly constant
at each point of predictor variables. Therefore, the scatterplots of the residuals against the
predicted looks like similar at each point (Figure 4 below).

43
Figure 4.3: Homoscedasticity Test Result Source: Own Survey, 2018

Assumption 5 Durbin-Watson Statistics Test

Independent residuals called Durbin-Watson Statistics test that used to measure the extent to
which the value of a dependent variable at time is related to its value at the previous time
period (autocorrelation). Autocorrelation means that the results of your regression analysis
are less likely to be reliable. Furthermore, autocorrelation means the extent to which the
value of a variable at a particular time is related to its value at the previous time period. The
Durbin-Watson statistic ranges in value from zero to four. A value of two indicates no
autocorrelation. A value towards zero indicates positive autocorrelation. Conversely, a value
towards four indicates negative autocorrelation. As a general rule according to Eskandarpour
(2016) acceptable range of Durbin-Watson 1.5 to 2.5. For this study table 4.11 below, the
output value of Durbin-Watson Statistics of this study was 1.64, which implies that the result
regression analysis was reliable.

Table 4.11
Durbin-Watson Statistics for Independence of Residuals
b
Model Summary
R Adjusted R Std. Error of the
Model R Square Square Estimate Durbin-Watson
a
1 .882 .778 .772 .14860 1.641
a. Predictors: (Constant), Reliability, Responsiveness, Assurance, Empathy and Tangibility
b. Dependent Variable: CUS_SAT
Source: Own Survey, 2018

44
Assumption 6 Multicollinearity Test
Multicollinearity occurs when the independent variables are too highly correlated with each
other. It can be checked through Tolerance and Variance Inflation Factor (VIF) by
Collinearity Statistics. Tolerance is an indicator of how much of the variability of the
specified independent is not explained by the other independent variables in the model and is
calculated using the formula 1– R2 for each variable. Any variable with tolerance below 0.10
or tolerance with a VIF value above 10 would have a correlation more than 0.90 with other
variables, indicative of the multicollinearity problem. That mean, the value of tolerance
which less than 0.1 or the value VIF that higher than 10 indicate that statistics have
multicollinearity problem.
Therefore, according to table 4.12, the present study reveals that the value of tolerance is
more than 0.1 and the value of VIF is less than 10, this indicates the study didn‟t violated the
multicollinearity assumption.
Table 4.12
Multicollinearity Test
a
Coefficients
Collinearity Statistics
Model
Tolerance VIF
(Constant)
Reliability .347 2.881

Responsiveness .683 1.464

Assurance .337 2.971

Empathy .548 1.826

Tangibility .713 1.403

a. Dependent Variable: CUS_SAT

Source: Own Survey, 2018
Assumption 7 Outliers Test
Significant outliers can place undue influence on the model, making it less representative of
your data as a whole. This can be tested by going back the data file at cook‟s distance value
on SPSS. Any values over 1 are likely to be significant outliers, which may place undue
influence on the model. Therefore, based on this assumption the result of this study implies
that cook‟s distance values were all less than 1, suggesting individual cases were not unduly
influencing the research model.

45
Finally, the result of all above seven assumptions implied that the pre-model fitting test of
assumptions were found and successfully passed to conduct multiple regression.

4.3.2 Multiple Regression Results

The multiple regression analysis was used in order to examine the correlation more closely
and to examine the effects of the independent variables on the dependent variable due to the
existence of significant correlations between reliability, responsiveness, assurance, empathy
and tangibility with customer satisfaction. The result was shown in below Tables.

Table 4.13
Model Summary Result
b
Model Summary
R Adjusted R Std. Error of the
Model R Square Square Estimate Durbin-Watson
a
1 .882 .778 .772 .14860 1.641

a. Predictors: (Constant), Reliability, Responsiveness, Assurance, Empathy and Tangibility

b. Dependent Variable: CUS_SAT

Source: Own Survey, 2018

From the model summary in table 4.13, the Value of R2 is a measure of how much variability
in the outcome is explained by the independent variables. This shows that R2 = 77.8 percent
which means 77.8 percent of variation in customer satisfaction is explained or caused by E-
banking service quality dimensions variables: reliability, responsiveness, assurance, empathy
and tangibility. In other words, 22.2 percent of the variation in customer satisfaction was not
explained by these five independent variables. The model is statistically significant so that
the regression equation has a very high explanatory power.

Table 4.14
ANOVA Result
ANOVAa
Sum of
Model Squares df Mean Square F Sig.
Regression 15.302 5 3.060 138.591 .000b
Residual 4.372 198 .022
Total 19.675 203
a. Dependent Variable: CUS_SAT
b. Predictors: (Constant), Reliability, Responsiveness, Assurance, Empathy and Tangibility
Source: Own Survey, 2018

46
Table 4.14 on above, gives the ANOVA test on the general significance of the model. As p is
less than 0.01, the model is best fit to use and it is significant in explaining variation in the
dependent variable. Thus, Assurance, Reliability, Responsiveness, Empathy and Tangible
significantly predict the customer satisfaction (dependent variable). ANOVA tells us whether
our regression model describes a significant amount of the variance. The large value of F-
statistic (F=138.591; p<0.01) here is depicting that model is significantly describing the
variance.

Table 4.15
Coefficient result
Coefficientsa
Model Unstandardized Standardized t Sig. Collinearity
Coefficients Coefficients Statistics
B Std. Beta Tolerance VIF
Error
(Constant) .111 .169 .657 .512
Reliability .260 .051 .292 5.137 .000 .347 2.881
Responsiveness .210 .038 .225 5.540 .000 .683 1.464
Assurance .235 .043 .314 5.439 .000 .337 2.971
Empathy .147 .043 .156 3.451 .001 .548 1.826
Tangibility .135 .040 .133 3.359 .001 .713 1.403
a. Dependent Variable: CUS_SAT
Source: Own Survey, 2018

Table 4.15 showed the standardized beta coefficients. In order to make comparison between
different variables, it is important to use the standardized coefficients. “Standardized” means
that these values for each of the different variables have been converted to the same scale so
that you can compare them. A unit change in the service quality dimensions, would produce
an effect on the customer satisfaction.Thus, a one standard deviation increase in standardized
reliability is predicted to result in 0.290 standard deviation increase in standardized customer
satisfaction holding constant the remaining variables and also it works for the remains
variables to predict the same way.

Moreover, the results of table 4.15 indicates that, all the service quality dimensions namely,
reliability, responsiveness, assurance, empathy and tangibility have a positive and significant

47
effect on customer satisfaction at p<0.01 level. But, the degree of significance varied from
variable to variable. Based on the customers‟ point of view that, reliability (β=0.292,
p<0.01), responsiveness (β=0.225, p<0.01), and assurance (β=0.314, p<0.01) have the high
effect on customer satisfaction. On other hand, the finding further indicates that empathy
(β=0.156, p<0.01), and tangibility (β=0.133, p<0.01) had relatively less positive effect on
customer satisfaction.

4.3.3 Effect of E-banking Service on Customer Satisfaction

The main objective of this study was to examine the effect of E-banking service quality on
customer satisfaction. According to the multiple regression analysis results, each specific
objectives of the study is successfully achieved. The results of service quality dimensions in
relation to the previous research findings were discussed as follows:

Effect of Reliability on Customer Satisfaction

The result of this study indicates that reliability (β=0.292, p<0.01) has a positive and
significant effect on customer satisfaction. This finding is supported by Hitesh (2015), found
that reliability has a positive and significant effect on customer satisfaction. It is also
supported by other authors (Areeba et al., 2016; Surafel, 2016; Simon, 2016 and Gezahegn,
2015). On the contrary, Amelework (2016) reported that reliability has a positive and
insignificant effect on customer satisfaction towards E-banking services.

Effect of Responsiveness on Customer Satisfaction

The finding of this study also indicates that responsiveness (β=0.225, p<0.01), has a positive
and significant effect on customer satisfaction. This finding is also supported by Areeba et al.
(2016) reported that responsiveness has high positive and significant effect on customer
satisfaction. It is also supported by other authors (Surafel, 2016 and Gezahegn, 2015). On the
contrary, Tizazu (2012) reported that responsiveness has a negative and insignificant effect
on customer satisfaction satisfaction towards E-banking services.

Effect of Responsiveness on Customer Satisfaction

Furthermore, the result of this study also indicates that assurance (β=0.314, p<0.01) has a
positive and significant effect on customer satisfaction. This finding is consistent with the
study of Amelework (2016) that find out assurance has high positive and significant effect on

48
customer satisfaction. It is also supported by other authors (Areeba et al., 2016; Surafel,
2016; Tizazu, 2012 and Gezahegn, 2015). But, Simon (2016) reported that assurance has a
negative and insignificant effect on customer satisfaction satisfaction towards E-banking
services.

Effect of Empathy on Customer Satisfaction

The finding this study indicates that empathy (β=0.156, p<0.01) has relatively less positive
effect on customer satisfaction. This finding is also supported by Simon (2016) found that
empathy has positive and significant effect on customer satisfaction with relatively low
coefficients value among the rest SERVQUL dimensions. On the other hand, Areeba et al.
(2016) reported that empathy has no significant effect on customer satisfaction towards E-
banking services.

Effect of Tangibility on Customer Satisfaction

The finding further indicates that tangibility (β=0.133, p<0.01) has relatively less positive
effect on customer satisfaction. This finding is also supported by Simon (2016), found that
tangibility has positive and significant effect on customer satisfaction but its coefficients is
relatively low among the rest SERVQUL dimensions. On the other hand Surafel (2016)
reported that tangibility has no impact on customer satisfaction towards E-banking.

49
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

1. Introduction

This chapter is the final section which presents summary of finding, conclusion and
recommendation of the study. The chapter reported summary for main findings of study as
presented in result and discussion section. Then, conclusion and recommendations were
made based on the findings. Then, as a result of limitation of the study, the researcher
provided suggestion for future study.

5.1 Summary of Findings

The main objective of the study is to examine the Effect of E-Banking Service Quality on
Customer Satisfaction: The Case of CBE Arba Minch Branches. The study adopted
explanatory research design with quantitative research approaches. The structured
questionnaires were distributed to 204 E-banking service customers of CBE Arba Minch
branches. Then, analysis was made based on descriptive statistics, Pearson correlation and
multiple regression analysis methods.

The major findings of the study were summarized as follows;

 The mean value of respondents‟ age was 29 years;

 From the gender perspective 56.4% were male respondents;
 Most of the respondents (54.9%) were those with a first degree;
 The majority of respondents (44%) of respondents were public sector employees
 From marital perspective 56.9% respondents were single.
 The majority of respondents (42.2%) earn income in between br.5,001- 9,000;

 The mean value of respondents‟ experience with E-banking service was 3 years

 In the descriptive statistics analysis, the average mean of respondents on reliability,

responsiveness, assurance, empathy, tangibility and customer satisfaction dimension
were scored 4.01, 4.30, 4.00, 3.88, 3.37 and 4.07 respectively.

50
  The Pearson correlation analysis result show correlation coefficient and significant
level of reliability (r=0.787 & P<0.01), assurance (r=.774 & P<0.01), empathy
(r=.652 & P<0.01), responsiveness (r=0.582 & P<0.01), and tangibility (r=0.542 &
P<0.01).

 The multiple regression analysis results show, reliability (β=0.292, p<0.01),

responsiveness (β=0.225, p<0.01), assurance (β=0.314, p<0.01), empathy (β=0.156,
p<0.01), and tangibility (β=0.133, p<0.01). Then, the model summary result‟s
reported R2=0.778 and ANOVA test show the model significance at P<0.01 level.

5.2 Conclusion

The study has examined the effect of E-banking service quality on customer satisfaction in
the case of CBE Arba Minch branches. Based on statistical analysis, it has been observed that
customers are fairly satisfied with the E-banking services that have been delivering by CBE
Arba Minch branches.

The study found that as ability to perform ordered service dependable and accurately
(reliability) increase, the satisfaction of the customer towards E-banking service in CBE
Arba Minch branches also increase and vice versa. Thus, the reliability of E-banking service
has a positive and significant associate with customer satisfaction. This study also concluded
that, E-banking service reliability has strong positive and significant effect on customer
satisfaction.

In addition to this, the study also revealed that as Prompt delivery of services to customers
(responsiveness) increase, the customer satisfaction towards the E-banking service also
improved. This is because of a positive and significant associate of E-banking service
responsiveness with customer satisfaction. The researcher also concluded that, E-banking
service responsiveness has strong positive and significant effect on customer satisfaction.

The study also found that, as the ability to convey trust and confidence (assurance)
increases, the customer satisfaction towards the E-banking service also improved and vice
versa. This is because of a positive and significant associate of E-banking service assurance
with customer satisfaction. The researcher also concluded that, the assurance of E-banking
service has strong positive and significant effect on customer satisfaction.

51
The study also found that, as individualized attention to the E-banking users (empathy)
increases, the customer satisfaction towards the E-banking service increase and vice versa.
This is because of a positive and significant associate of empathy dimensions with customer
satisfaction. But, this study concluded that, the empathy of dimension of E-banking service
has relatively low positive and significant effect on customer satisfaction.

Similarly, the study also found that, as modernity, easy to use and visual appearance of E-
banking service devices (tangibility) increases, the customer satisfaction towards the E-
banking service increase and vice versa. This is because of a positive and significant
associate of tangibility dimensions with customer satisfaction. But, this study concluded
that, the tangibility of dimension of E-banking service also has relatively low positive and
significant effect on customer satisfaction.

In general, when all service quality dimensions taken as predictor of customer satisfaction,
assurance has high positive and significant effect on customer satisfaction followed by
reliability and responsiveness whereas empathy and tangibility have relatively less effect on
customer satisfaction. The model summary results confirm that results generated by the five
E-banking service quality dimensions explain 77.8% (R2=0.778) variation in customer
satisfaction and ANOVA test confirmed that the model is significant at P<0.01 level. As a
result, the researcher concluded that E-banking service quality has positive and significant
effect on customer satisfaction.

5.3 Recommendations

According to the findings and conclusions of the study, the researcher forwards the following
recommendations for the managers of CBE Arba Minch branches.

This study has important implication that all level managers of CBE in Arba Minch
branches should give special attention to the dimensions of assurance, reliability and
responsiveness in order to maintain the reported results through providing quality and
consistent services by collaboration with Ethiopian Telecommunication Corporation,
since these dimensions have high and positive effect on customer satisfaction in E-
banking services.

52
 In order to improve customer satisfaction on empathy dimension, it is recommended
that CBE should work on customer handling in order to understand the specific needs
of customers of E-banking, through showing sincere interest in solving when they get
a problem and try as much as possible to meet or exceed customers‟ expectation
which associated with the services provided by E-banking.

In order to improve customer satisfaction on tangibility dimension, it is recommended

CBE should do awareness creation for the users with the aim of building friendliness
and familiarizing them with physical facilities, modernity, visual appearance of E-
banking devices and to make ease to use these technologies.

5.4 Suggestions for Future Study

Based on the limitations of this study, the following suggestions are recommended for future
studies:

 It is suggested that if the future research can be carried out longitudinal studies to
generalize the results of the study.

 It is recommended if the future research can be added other service quality

dimensions to generalize the results of E-banking effect on customer satisfaction.

 It is better if the future research can use probabilistic sampling techniques to generate
the results based on better representative sample survey of whole population.

53
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 APPENDICES
Appendix 1 Questionnaire in English and Amharic

Arba Minch University

School of Graduate Studies

Department of Management

Introduction

Dear customer,

The questionnaire is prepared by Master of Business Administration (MBA) graduate

student for examining Effect of E-Banking Service Quality on Customer Satisfaction
in case of CBE Arba Minch Branches. The purpose of this study is to assess your
opinions about E-banking service quality that is the most important factors of
satisfaction. The success of this survey depends on your participation and truthful
responses. I would therefore greatly appreciate your assistance in answering the
questionnaire. Please be assured that your response will be kept strictly confidential
and only used for academic purpose.

General Instruction:

1. No need to write your name

2. Your response confidentiality is maintained
3. Instruction for each part of the questionnaire is given at the beginning
of the questions

Thank You for your Collaboration!

Name: Mesfin Menamo

E-mail: mesfinmenamo@gmail.com
Tell: +251911547526

58
 Part I: General Background Information

Please put  mark in the box that best describes you

1. Age

2. Gender: Female Male

3. Educational level: Primary (Elementary) High school

Diploma / Level IV First Degree Masters and above

4. Occupation: Student Public sector employee Private sector employee

Own Business Other

5. Monthly income: Br 2000 and Below Br 2001- 5000

Br 5001-9000 Br 9001 and Above

6. Marital Status: Single Married Divorce Widow

7. For how many years have you used E-Banking Service

Part II: E-banking Service Quality

Listed below are a series of statements that represent E-banking service quality with respect to
your own feeling, please indicate the degree of your agreement or disagreement with each
statement by putting a tick mark (√) on one of the five alternatives. Responses are measured on 5-
point scales with the following verbal anchors: Strongly Disagree (1), Disagree (2), Moderately
Agree (3), Agree (4) and Strongly Agree (5).

RELIABILITY
1 2 3 4 5
1 E-banking is reliable
2 E-banking system performs the service right the first time.
The E-Banking system not fails to deliver what
3
promised/ordered
I prefer using E-banking instead of visiting branch for making
4
my transaction
5 E-banking delivers accurate transaction services as I desired

59
 RESPONSIVENESS 1 2 3 4 5
Response of service through e-banking is very prompt and
6
quick
My Bank‟s E-Banking facility makes accurate promise about
7
the service delivery
The CBE‟s E-banking employees/Help desks are always
8
willing to help me.
9 I always get the detail of my account through Electronic device
ASSURANCE 1 2 3 4 5
I feel safe and secure while making transactions through E-
10
banking service
My E-Banking site does not share my personal information
11
with other sites
The behavior of E-banking employees of CBE instills
12
confidence in customer
The CBE‟s E-banking employees/Help Center have enough
13
knowledge to answer my questions
EMPATHY 1 2 3 4 5
When I get a problem, Bank shows a sincere interest in solving
14
it
I get personal attention from bank employee, if need of contact
15
arises
16 E-banking Help desk operating hours is convenient to me
17 The E- banking technical experts are ease to access
18 Employees of Bank understand my specific needs.
TANGIBLES 1 2 3 4 5
E-banking service devices (ATM, POS, Web site, mobile and
19
PC) are easy to use and navigate.
20 E-banking service has up-to-date equipment & technology
21 The E-banking physical facilities are visually appealing
22 E-banking device makes you find valuable information easily.

60
Part III: Customer Satisfaction

Listed below are a series of statements that represent whether you are satisfied or not with
E-banking services provided by the bank with respect to your own feeling, please indicate
the degree of your agreement or disagreement with each statement by putting a tick mark (√)
on one of the five alternatives. Responses are measured on 5- point scales with the following
verbal anchors: Strongly Disagree (1), Disagree (2), Moderately Agree (3), Agree (4) and
Strongly Agree (5).

CUSTOMER SATSFACTION 1 2 3 4 5
I am satisfied with E-banking service that is provided by the
1
bank
I'm satisfied with E-banking ability to perform the
2
promised/ordered service dependable and accurately
I'm satisfied with the willingness of Help desks and the very
3
prompt and quick service of E-banking
I'm satisfied with the knowledge and courtesy of E-banking
4 employees to convey trust and confidence, and E-banking
service safety and security
I'm satisfied with accessibility, sensitivity and effort in
5
understanding of my specific needs by E-banking employees
I'm satisfied with the physical facilities, modernity, easy to use
6
and visual appearance of E-banking service devices

61
 አርባምንጭ ዩኒቨርሲቲ

የድህረ ምረቃ ትምህርት ቤት

ማናጅሜንት ትምህርት ክፍሌ

መግቢያ

የተከበራችሁ ደንበኞች

ይህ መጠየቅ የኢላክትሮንክ ባንኪንግ አገሌግልት ጥራት በደንበኞች እርካታ ሊይ ያሇውን ተጽዕኖ በአርባምንጭ ከተማ
ባለት የመንግስት ባንኮች ሊይ ሇማጥናት የተዘጋጀ መጠይቅ ሲሆን ጥናቱ በማስተርስ ድግሪ በቢዝነስ አስተዳደር የትምህርት
መስክ ተመራቂ ተማሪ የታቀደ ነው፡፡ የመጠይቁ ዓሊማ በኢላክትሮንክ ባንኪንግ አገሌግልት ጥራት ሊይ ያሇውን የእርሷን
አመሇካካት ማወቅ ሲሆን ይህም ሇጥናቱ ግብ እጅግ አስፇሊጊ ጉዳይ ነው፡፡ የጥናቱ ስኬት የሚወሰነው በእርሷ ተሳትፎ
እና እውነተኛ ምሊሽ በመሆኑ መጠይቁን ሇመመሇስ መተባባሪዎን በጣም አደንቃሇሁ፡፡ መጠየቁ የሚፇሇገዉ ሇትምህርት
ዓሊማ ብቻ መሆኑን እና የመረጃ ምስጥርነቱም በአስተማማኝ ሁኔታ የሚጠበቅ ስሇመሆኑ እርግጠኛ እንድሆኑ በአክብሮት
አስታውቃሇሁ፡፡

አጠቃሊይ መመሪያ፡

1. ስሞትን መጻፍ አያስፇሌግም

2. የሚሊሾ ምስጥራዊነት የተጠበቃ ነው
3. ሇእያንዳንዱ ክፍሌ መጠይቅ መመሪያው በመጠይቁ መግቢያ ተገሌጾዋሌ፡፡

ሇትብብሯ አማሰግናሇሁ!!!

መስፍን መናሞ
ኢመይሌ፡ mesfinmenamo@gmail.com
ስሌክ: +251911547526

62
ክፍሌ አንድ፡ አጠቃሊይ የግሌ ሁኔታ

እባክዎን ይህን ምሌክት  እርሷን በደንብ በሚገሌጽ ሳጠን ሊይ ያድርጉ፡፡

1. ዕድሜ ፡

2. ፆታ : ሴት ወንድ

3. የትምህርት ደረጃ፡ አንደኛና መሇስተኛ ደረጃ ሁሇተኛ ደረጃ

ድፕልማ/ ቴክንክና ሞያ የመጀማሪያ ድግሪ ሁሇተኛ ድግሪ እና ከዚያ በሊይ

4. የሥራ ሁኔታ: ተማሪ የመንግስት ሠራተኛ የግሌ ድርጅት ሠራተኛ

የግሌ ንግድ ላሊ

5. ወራዊ ገቢ: 2000 ብር እና ከዚህ በታች ከብር 2001- 5000

ከብር 5001-9000 ብር 9001 እና ከዚህ በሊይ

6. የጋብቻ ሁኔታ: ያሇገባ/ች ያገባ/ች የፇታ/ች በሞት የተሇየ

7. ሇምን ያህሌ ጊዜ የኢላክትሮንክ ባንኪንግ አገሌግልት ተጠቅሟለ?

ክፍሌ ሁሇት፡ የኢላክትሮንክ ባንኪንግ አገሌግልት ጥራት

ከዚህ በታች የተዘረዘሩ ጥያቄዎች ስሇኢላክትሮንክ ባንኪንግ አገሌግልት ጥራት ያልትን የግልን አመሇካካት ሇመመዘን
የተዘጋጁ መጠይቆች ነቸው፡፡ ስሇዚህ እባክዎን የእርሷን የስምምነትዎን አሌያም ያሇመስማማትዎን ደረጀ በሚገሌጸው
አማራጭ ይህን ምሌክት  በጥያቄዎቹ ፊት ሇፊት ባሇው ክፍት ቦታ ያስቀምጡ፡፡ ምሇሾዎን ሇመግሇጽ አምስት
ደረጀዎች ተቀምጧሌ፡፡ ይኸውም፡-

1= በጣም አሌስማማም, 2= አሌስማማም, 3= መካከሇኛ, 4= እስማማሇዉ እና 5= በጣም እስማማሇዉ

ተኣማንነት
1 2 3 4 5
1 የኢላክትሮንክ ባንክንግ አገሌግልት ሉታመን የሚችሌ ነው
2 ኢላክትሮንክ ባንክንግ ከመጀመሪያዉ ጀምሮ ትክክሇኛውን አገሌግልት ያቀርባሌ
3 ኢላክትሮንክ ባንክንግ የታዘዘውን አገሌግልት ያቀርባሌ
አገሌግልትን ሇማግኛት ባንክ ከመሄድ ይሌቅ ኢላክትሮንክ ባንክንግ አገሌግልትን
4 መጠቀም እመርጣሇሁ
5 ኢላክትሮንክ ባንክንግ እኔ እንደሚፇሌገው ትክክሇኛውን አገሌግልት ይሰጣሌ

63
 ፇጣን ምሊሽ
1 2 3 4 5
6 የኢላክትሮንክ ባንክንግ አገሌግልት ምሇሽ በጣም ፇጣን ነው
የባንኩ ኢላክትሮንክ ባንክንግ አገሌግልት አቅራቦቱ አገሌግልቱን ሇማቅረብ
7 በገበው ቃሌ መሠረት በትክክሌ እንድፇጽም አድርጎታሌ
8 የባንኩ ሠራተኞች እኔን ሇመርዳት ሁሌጊዜ ፇቃደኞች ናቸው
እኔ ሁሌጊዜ በኢላክትሮንክ ባንክንግ መገሌገያ መሣሪያ አማካይነት ስሇ ሂሳብ
9 አካውቴ በቂ መረጃ አገኛሇሁ
ደኅንነት 1 2 3 4 5
በኢላክትሮንክ ባንክንግ በማደርገው የመረጃ ሌውውጥ ምቾትና ደኅንነት
10 ይሰማኛሌ

የእኔ ኢላክትሮንክ ባንክንግ የመረጃ መረብ የግሌ መረጃየን ምስጥራዊነቱን

11 ይጠብቃሌ፣ ሇላልችም አያጋራም
የባንኩ የኢላክትሮንክ ባንክንግ ዘርፍ የሠራተኞች ፀባይ፡ ደንበኞች በባንኩ
12 እንድተማማኑ ያደርጋሌ
የባንኩ የኢላክትሮንክ ባንክንግ ዘርፍ ሠራተኞች፡ ጥያቄዎቼን ሇመመሇስ በቂ
13 እውቀት አሊቸዉ

አጋዥነት 1 2 3 4 5
14 ችግር በገጠመኝ ጊዜ ባንኩ ችግሬን ሇመፍታት ሌባዊ ፍሊጎትን ያሳያሌ
15 የባንኩን ሠራተኞች በሚፇሌግበት ጊዜ ሇፊሊጎቴ ሌዩ ትኩረት ይሰጣለ
16 የኢላክትሮንክ ባንክንግ ድጋፍ ሰጭ ሠራተኞች የሥራ ሰዓታቸው ሇእኔ ምቹ ነው
17 የኢላክትሮንክ ባንክንግ ባሇሙያዎችን በቀሊለ አገኛሇሁ
18 የባንኩን ሠራተኞች የግሌ ፍሊጎቴን ይረዳለ

ውጫዊ ገጽታ 1 2 3 4 5
የኢላክትሮንክ ባንክንግ መገሌገያ መሣሪያ/ማሽን ሇምሳላ ኤትኤም፣ ፖስ፣
19 ኮምፕዩተርና ተንቀሳቃሽ ስሌክ ሇአጠቃቃም ቀሊሌና ምቹ ናቸው
የኢላክትሮንክ ባንክንግ አገሌግልት ዘመናዊ የሆኑ መገሌገያ መሣሪዎችን
20 ይጠቀማሌ
21 የኢላክትሮንክ ባንክንግ መገሌገያ መሣሪዎችን ሇዓይን ማራኪ ናቸው
የኢላክትሮንክ ባንክንግ መገሌገያ መሣሪያ አስፇሊጊ መረጃን በቀሊለ እንዲያገኝ
22 ያደርገኛሌ

64
 ክፍሌ ሦስት፡ የደንበኛ እርካታ

ከዚህ በታች የተዘረዘሩ ጥያቄዎች በኢላክትሮንክ ባንኪንግ አገሌግልት ያልትን የግልን እርካታ ሇመመዘን የተዘጋጁ
መጠይቆች ነቸው፡፡ ስሇዚህ እባክዎን የእርሷን የስምምነትዎን አሌያም ያሇመስማማትዎን ደረጀ በሚገሌጸው አማራጭ
ይህን ምሌክት  በጥያቄዎቹ ፊት ሇፊት ባሇው ክፍት ቦታ ያስቀምጡ፡፡ ምሇሾዎን ሇመግሇጽ አምስት ደረጀዎች
ተቀምጧሌ፡፡ ይኸውም፡-

1= በጣም አሌስማማም, 2= አሌስማማም, 3= መካከሇኛ, 4= እስማማሇዉ እና 5= በጣም እስማማሇዉ

የደንበኛ እርካታ 1 2 3 4 5
1 በዚህ ባንክ በሚሰጠው የኢላክትሮንክ ባንክንግ አገሌግልት አሰጣጥ ረክቻሇሁ
ኢላክትሮንክ ባንክንግ የታዘዘውን አገሌግልት በትክክሌ እና በሚታመን ሁኔታ
2 በመስጠት ችልታው ረክቻሇሁ

ባንኩ በኢላክትሮንክ ባንክንግ አገሌግልት ደንበኞችን ሇመርዳት ባሇው

3 ቁርጠኝነትና ፇጣን አገሌግልት ሇመስጠት ባሇው ብቃት ረክቻሇሁ
በኢላክትሮንክ ባንክንግ አገሌግልት ምቾትና ደኅንነት እንዲሁም የተቋሙ
4 ሠራተኞች ባሊቸዉ እዉቀት ትህትና፣ ተኣማንነትና መተማመን የመፍጠር ችልታ
ረክቻሇሁ
የኢላክትሮንክ ባንክንግ አገሌግልት ድጋፍ ሰጪ ሠራተኞች ሌዩ ፊሊጎቴን
5 ሇመረዳት በሚሰጡት ትኩረት፣ ደራሽነት፣ እንክብካቤና ጥራት ረክቻሇሁ

የኢላክትሮንክ ባንክንግ መገሌገያ መሣሪዎች ውጫዊ ገፅታቸው ዘመናዊ እና

6 ሇአጠቃቀም ቀሊሌ በመሆኑ ረክቻሇሁ

65
Appendix 2 Reliability Test Result
Reliability Responsiveness

Reliability Statistics Reliability Statistics

Cronbach's N of Cronbach's N of
Alpha Items Alpha Items
.835 5 .769 4

Assurance Empathy

Reliability Statistics Reliability Statistics

Cronbach's N of Cronbach's N of
Alpha Items Alpha Items
.792 4 .753 5

Tangibility Customer Satisfaction

Reliability Statistics Reliability Statistics

Cronbach's N of Cronbach's N of
Alpha Items Alpha Items
.735 4 .783 6

66
Appendix 3 Pearson Correlations Result

Correlations

REL RES ASS EMP TAN CUS_SAT

** ** ** ** **
Pearson Correlation 1 .491 .767 .579 .398 .787

REL Sig. (2-tailed) .000 .000 .000 .000 .000

N 204 204 204 204 204 204

** ** ** ** **
Pearson Correlation .491 1 .345 .312 .429 .582
RES Sig. (2-tailed) .000 .000 .000 .000 .000
N 204 204 204 204 204 204
** ** ** ** **
Pearson Correlation .767 .345 1 .650 .425 .774
ASS Sig. (2-tailed) .000 .000 .000 .000 .000
N 204 204 204 204 204 204
** ** ** ** **
Pearson Correlation .579 .312 .650 1 .398 .652
EMP Sig. (2-tailed) .000 .000 .000 .000 .000
N 204 204 204 204 204 204
** ** ** ** **
Pearson Correlation .398 .429 .425 .398 1 .542
TAN Sig. (2-tailed) .000 .000 .000 .000 .000
N 204 204 204 204 204 204
** ** ** ** **
Pearson Correlation .787 .582 .774 .652 .542 1

CUS_SAT Sig. (2-tailed) .000 .000 .000 .000 .000

N 204 204 204 204 204 204

**. Correlation is significant at the 0.01 level (2-tailed).

Appendix 4 Model Summary Result

b
Model Summary

Model R R Square Adjusted R Std. Error of the Durbin-Watson

Square Estimate
a
1 .882 .778 .772 .14860 1.641

a. Predictors: (Constant), TAN, REL, RES, EMP, ASS

b. Dependent Variable: CUS_SAT

Appendix 5 ANOVA Test Result

a
ANOVA

Model Sum of Squares df Mean Square F Sig.

b
Regression 15.302 5 3.060 138.591 .000

1 Residual 4.372 198 .022

Total 19.675 203

a. Dependent Variable: CUS_SAT
b. Predictors: (Constant), TAN, REL, RES, EMP, ASS

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Appendix 6 Multiple Regression Results
a
Coefficients

Model Unstandardized Standardized t Sig. Collinearity Statistics

Coefficients Coefficients

B Std. Beta Tolerance VIF

Error

(Consta
.111 .169 .657 .512
nt)

REL .260 .051 .292 5.137 .000 .347 2.881

1 RES .210 .038 .225 5.540 .000 .683 1.464

ASS .235 .043 .314 5.439 .000 .337 2.971

EMP .147 .043 .156 3.451 .001 .548 1.826

TAN .135 .040 .133 3.359 .001 .713 1.403

a. Dependent Variable: CUS_SAT

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Appendix 7 Published Tables to Determining Sample Size (Israel, 1992)

Table 1. Sample size for 3%, 5%, 7% and 10% Table 2. Sample size for 5%, 7% and 10% Precision
Precision Levels Where Confidence Level is 95% and Levels Where Confidence Level is 95% and P=.5.
P=.5.
Size of Sample Size (n) for Precision (e) of:
Size of Sample Size (n) for Precision (e) of: Population 5% 7% 10%
Population 3% 5% 7% 10%
100 81 67 51
500 a 222 145 83 125 96 78 56
600 a 240 152 86 150 110 86 61
700 a 255 158 88 175 122 94 64
800 a 267 163 89 200 134 101 67
900 a 277 166 90 225 144 107 70
1,000 a 286 169 91 250 154 112 72
2,000 714 333 185 95 275 163 117 74
3,000 811 353 191 97 300 172 121 76
4,000 870 364 194 98 325 180 125 77
5,000 909 370 196 98 350 187 129 78
6,000 938 375 197 98 375 194 132 80
7,000 959 378 198 99 400 201 135 81
8,000 976 381 199 99 425 207 138 82
9,000 989 383 200 99 450 212 140 82
10,000 1,000 385 200 99
15,000 1,034 390 201 99
20,000 1,053 392 204 100
25,000 1,064 394 204 100
50,000 1,087 397 204 100
100,000 1,099 398 204 100
>100,000 1,111 400 204 100
a = Assumption of normal population is poor (Yamane,
1967). The entire population should be sampled.

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