Electronic Banking Adoption in Ethiopia: An Empirical Investigation

SN Bus Econ (2021) 1:112
https://doi.org/10.1007/s43546-021-00114-0
ORIGINAL ARTICLE
Electronic banking adoption in Ethiopia: an empirical

investigation
Pankaj Tiwari1
Received: 29 October 2020 / Accepted: 19 July 2021

© The Author(s), under exclusive licence to Springer Nature Switzerland AG 2021
Abstract
The bank has always been a very intense business, especially in the last few decades
when information technology had a strong influence on the banking sector. This
research followed almost the same pattern, particularly by examining the factors
influencing information technology adoption. However, little work has been done
to identify these factors in electronic banking services in developing African Coun-
tries. The purpose of this research was to analyze the variables that influence adop-
tion in Commercial Bank of Ethiopia. The researcher has used factors perceived ease
of use, infrastructure, security, trust, and e-banking adoption. The data were col-
lected from 179 respondents of CBE. This study uses the structural equation model
based on least partial square analysis. The results show that customer trust mediates
between the perceived ease of use, infrastructure, security, and e-banking adoption.
The practical result of this research is the provision of information and knowledge
to the Ethiopian Commercial Bank, which is the financial backbone of this country.
Further, combining Trust in technology will improve confidence in Ethiopian bank-
ing sector. Hence, the government should make more efforts to sustain and improve
e-banking through technology-driven innovation in the banking sector.
Keywords Trust · Perceived ease of use · Infrastructure · Security · E-banking

adoption
Introduction
The electronic novelty in the banking sector dates to 1970. Since then, the com-
puterization of financial institutions has gained momentum. Since 1980, with the
introduction of ATMs, easy financial transactions have been a visible light for cus-
tomers (Prager 2001). Internet and communication technology (ICT)-based e-bank-
ing has improved in recent years following the introduction of electronic banking.
* Pankaj Tiwari
Pankajtiwari124@gmail.com
1
Ethiopian Civil Service University, CMC Road, PO BOX 5648, Addis Ababa, Ethiopia
Vol.:(0123456789)
112 Page 2 of 28 SN Bus Econ (2021) 1:112
Information communication technology (ICT) reduces the error rate in financial

transactions and accelerates the delivery of financial services (Shah and Clarke
2009).
E-banking technology is a wide variety of services including popular ATMs,
direct deposits, automatic billing, electronic money transfer, etc., (Joewono et al.
2017). Over the past decade, ICT has become an important part of the Ethiopian
development plan. The country is facing a significant gap between interest in tech-
nology and the regulatory tools and policies available to secure the country’s eco-
nomic growth. ICT are one of the key elements of the accelerated and sustainable
development plan for poverty reduction, which runs from 2005 to 2010. According
to the definition, the ICT infrastructure is behind the efficiency and success of the
introduction of e-government (United Nations 2016).
Servers, Internet, power backups, and well-developed web applications, decide
connection and accessing information and resources from anywhere at any time.
ICT infrastructure helps institutions to work together, negotiate and promote every-
day activities that save workers time and effort. The development of e-government
depends on modern infrastructure. Internet work is important for exchanging infor-
mation and developing new communication networks and providing new services
(Ndou 2004).
This study looks at electronic banking, which is a very new technology in the
study area. Customers require lot of resources to carry cash to banks (Takele and
Sira 2013). In Ethiopia, the main medium of exchange is still cash. As a result, cus-
tomers in Ethiopia are making greater use of automated teller machines (ATMs),
electronic payment systems, credit cards, and debit cards (Worku 1970). The concept
of e-banking requires a brief understanding of the role of Trust. This study is some-
what unique in that it aims to examine the mediating effect of trust on electronic
banking adoption in a commercial bank in Ethiopia. Through structural equation
modeling, the researcher tests Trust as a mediating variable between some elements
of the technology adoption model (Sathasivam and Wijetunga 2017). According to
the knowledge of the researchers, this will be the first study on e-banking in Ethiopia
to construct SEM using Perceived Ease of Use (PEOU), ICT Infrastructure (INF)
and e-Security (SEC). It will be analyzed using trust (TR). No previous study has
examined the role of trust in e-banking in Ethiopia. However, the available litera-
ture suggests that the practice, opportunities, and challenges of e-banking have been
tested with other different variables used in this study (Fekadu 2009). Other scholars
use the technology adoption model (TAM) to focus on the factors adopted by Ethio-
pian banks.
A modified technology adoption model (TAM), (Tarhini et al. 2016) was redevel-
oped as unified theory called UTAT (Venkatesh et al. 2012) to integrate extra the essen-
tial components of the TAM. Originally, the technical adoption model was defined as
technological expectations in terms of performance, the power of technological expec-
tations, its impact on society and the relief of customers from paperwork (Attuquaye-
fio and Addo 2014). Later, Ma et al. (2017), introduced perceived ease of use as an
extension of TAM. A deeper understanding of adoption can be traced back to the study
by Chiu et al. (2017). The scholars pointed out that the trust plays an important role
in adoption. Previous literature shows that when rationality focuses on variations in
SN Bus Econ (2021) 1:112 Page 3 of 28 112
relationship, an appropriate modeling technique should be applied. To assess the group

which differs from contingency variable, PLS-SEM measures variance is used (Hense-
ler et al. 2016), which is a different form of multi-group analysis. Chin and Dibbern
(2010), described bootstrap-based approach, which was suggested by Henseler et al.
(2009) in SEM research. In line with this literature, this researcher is developing an
integrated research model of adoption with SEM that integrates PEOU, ICT infrastruc-
ture, security, and trust in adopting electronic banking.
The future of e-banking will be determined by the strategic decisions of the bank
in response to electronic banking issues and challenges. Recent studies have shown
that e-banking is the most efficient way to reduce costs and optimize services. Com-
parable services and continued competition in technology may benefit the customer.
The research question of this article would be to analyze the variables that influence
e-banking adoption in commercial banks. This study is designed to identify these
factors.
Literature review
With regard to the adoption of e-banking, many scholars have conducted studies on
the mediating and moderating role using trust variables. Scholars including Alalwan
et al. (2015) conducted a study to assess consumer acceptance of internet banking in
Jordon. They used the trust factor. The data obtained from this study were obtained
from a convenience sampling, which in turn could have a negative impact on the
generalization of the results. However, our study used random (unbiased) sample
to minimize this gap. Another scholar deals with aspects of marketing strategy as
well as participation and communication questions in order to win new users and
to keep existing customers effective (Poon 2008). However, in addition to variables
of advertising and communication, the perceived ease and trust play a key role in
banking with which the communication between the customer and the bank can be
evaluated. Keramati et al. (2010), conducted a descriptive study of Iranion customer
choice to determine the relationship between independent variables with adoption.
To the researcher knowledge, there is a lack of research on e-banking that uses
empirical SEM modeling in Ethiopia. Existing studies highlight the importance of
demographics and the potential impact on consumer adoption (Jha and Ye 2016;
Izogo et al. 2012) and the intention to introduce internet banking (Ameme 2015).
However, Ameme uses historical data for perceptual studies. Our study is based on
primary data to measure customer perception. Scholar Ho (2017) found that the Lik-
ert scale is suitable for attitude measurement and customer perception.
Theoretical underpinning
Cross-market surveys and reviews of online banking have been used in various theo-
retical models used in literature reviews (Martins et al. 2014). In theory, several fac-
tors have been carefully studied and verified, and these factors defines customer’s
willingness to use Internet Banking (IB). For example, digital convenience, low risk,
strong security, and pre-internet knowledge have been identified as factors influenc-
ing customer intent to adopt IB (Yousafzai 2012). In addition, Poon (2008) pointed
that the possible consequences of using IB are both Internet speed, electronic prod-
uct functions, variability of the product and easy availability, reasonable services,
data protection, information security for data and customer readiness. Tarhini et al.
(2016) examined the social impact of performance expectations (PE) and digital
banking and confirmed that IB is linked to performance (PE) and social impact.
According to Walker and Johnson (2006), PEOU also explicitly predicted a client’s
tendency to adopt IB. A closer look at this evaluation shows the role of PEOU with
different concepts IT, usability, easy learning, flexibility, and clarity of user interface
is not examined in many African countries. Karahanna and Straub (1999) provided
empirical evidence for the role of social presence and the principle of social influ-
ence on perceived ease of use.
Other statistical results from scholars strongly support the impact of perceived
usefulness and usability on trust, which develops intend to customer to adopt IB
(Amin et al. 2014). Regarding the role of trust in customers’ intent and the adop-
tion of IB, many studies have examined a similar role (Yousafzai et al. 2009). In
addition, several researchers have identified the multidimensional role of human
intention, innovation, banking, loyalty, consumer innovation, personal charismas
as important factors for electronic banking channels (Yousafzai et al. 2009). The
reason for conducting this study was to find out the gap in recent models which
does not cover the most important aspects of the IB’s adoption, our model integrates
factors from recent adoption models in the context of Ethiopia and try to fill the
gap. In innovation diffusion theory (IDT), Rogers (2003) states that the technical
acceptance of technology and person’s perception of innovation is determined by
their relative advantages, compatibility, complexity, inheritance, observability, and
social standards (Bakkabulindi 2014). There are many articles that have used IDT as
a theoretical model framework, others have mixed IDT with other theories to illus-
trate the introduction and use of ICT (Agarwal and Prasad 1998; Kim and Crow-
ston 2011). The introduction of technology will address various security challenges.
Key challenges include privacy and data integrity to address fundamental consumer
security concerns. In this security, trust, customers, and developers remain a major
challenge for the Internet of Things applications and services (Abba Ari et al. 2020).
Ignoring these problems can lead to undesirable consequences such as lack of trust,
lack of TA and damage to reputation (Ziegeldorf et al. 2014). The success of trust
depends primarily on the perception of product safety by customers. Safety is a
major concern of customers who have a new product and it has a significant impact
on consumer confidence in a particular product or service. When using these new
technological-driven systems, they need to feel secure while adopting the technol-
ogy (Bojang 2017).
In this article, customer trust is used as the theoretical basis for thinking. Hence,
we used the concept of relationship marketing theory; it focuses on building long-
term partnerships with current customers. This is where end users prefer to develop
a sustainable association with the organization. This theory is popular with econo-
mists (Berry 2002; Gillett 2016). The company can take benefits by the implementa-
tion of consumer relations marketing theory. Services should develop trust, social
benefits, and customer support (Zeithaml and Bitner 2004). However, this paper
considers PEOU and TR in the adoption of e-banking products. With the introduc-
tion of the technology, PEOU has a greater impact on the mindset of consumers,
which impacts customer’s decision to use electronic banking services (Al-Smadi
2012). This view suggests that avoiding confusion has a powerful and significant
impact on PEOU. Technology introduction can be achieved through high quality
services and targets (Kotler and Keller 2006). Accordingly, relationship marketing
theory investigates whether trust serves as a mediating factor for successful rela-
tionship in marketing theory (Morgan and Hunt 1994). Recently, e-banking service
channels have become a growing and competitive field of research, specifically ana-
lyzing the factors affecting bank customer relationship in Ethiopia. Some studies
carried out in Ethiopia developed conceptual framework with the theory of innova-
tive diffusion and TAM.
In one of the studies, the researcher found that perceptions, social norms, per-
ceived behavioral effects, perceived usefulness, PEOU, and perceived risk had a sig-
nificant impact on the user’s intention to use the e-banking service channel (Takele
and Sira 2013). The sudden technological developments on the African continent
have made e-banking an important subject of study that has been closely studied
in recent years. (Gefen et al. 2003). Many researchers (Adams et al. 1992; Ajzen
and Fishbein 1980; Bagozzi 2007) have used technology adoption models to explain
the variable PEOU in technology. Correspondingly, companies discovered trust
as the most important variable for improving electronic bank acceptance (Muñoz-
Leiva et al. 2010). In the presence of trust, customers’ embrace Internet Banking
(IB), which is the primary dominant factor (Suh and Han 2002). Trust has had a
critical influence on the attitude of people in internet banking. Trust, security, and
privacy were identified as key variables that influenced ATMs in public places (Lit-
tle 2003). Lack of trust and security has an undesirable impact on customers’ use of
internet banking portals (Dimitriadis and Kyrezis 2011). Further, this research tries
to understand the exact form of the adoption model with the integration of key vari-
ables to marketing theories to analyze the mediating variable of e-banking. Given
this difference, this article models structural equations to establish the connection
between perceived ease of use, infrastructure, security, trust using SEM PLS. Sec-
ond, the study design will depend on the assessment of the direct and indirect effect
of technology adoption by the CBE customers. There is very extensive literature on
the introduction of e-banking in industrialized countries compared to developing
countries.
Very few studies are conducted in Ethiopia that examined key factors in bank
employee hiring when e-banking was introduced (Abukhzam and Lee 2010). The
researcher indicated that adoption of technologies was the reason for e-banking
growth. However, the researcher used unstructured interviews; it would be better
analyzed with semi-structured analysis for an in-depth assessment in the quali-
tative study. Maitlo et al. (2015) examined factors influencing the acceptance
of online banking services. The researcher found that online banking INF, per-
ceived risk, PEOU, is influenced by past internet awareness and online banking
information. But the trust also plays an important role (Palmer and Huo 2013).
Still, the researcher suggested using other variables that we did not consider in
this research. In Libya, Abukhzam and Lee (2010) factors that influenced bank
employees’ attitudes towards e-banking. The authors examined key factors influ-
encing bank employees’ attitudes towards e-banking technology. He said the
bank’s staff are keen to introduce and roll out technical options for traditional
manual procedures. When employees are given new machines that are easy to
operate, they do their jobs effectively. In this thesis, we expand your knowledge
and research gap by including additional communication variables perceived ease
of use (PEOU), ICT infrastructure (INF) and e-Security (SEC).
Conceptual model
As shown in Fig. 1, five factors—perceived ease of use (PEOU), ICT infrastruc-

ture (INF) and e-Security (SEC)—were included in the proposed conceptual
model. PEOC has been widely perceived in IB’s earlier literature as a primary
factor in predicting customer intent and adoption of new technology (Ndubisi
2007; Cheng et al. 2006; Nasir et al. 2015). The important role of PEOU with
IB adoption and trust is often explored in developed countries; however, it is
still necessary to recognize the main predecessors who could predict consumer
confidence. As an important component, PEOU was, therefore, introduced as an
important indicator of the TR and adoption. The development of hypotheses and
rationality of the constructs are justified in the following paragraphs.
Fig. 1 Proposed Research Model. Source: Davis (1989), Lee and Turban (2001), Kolodinsky et al. (2004)
Adoption and effectiveness of electronic banking
The author pointed out that internet security has been described as the most criti-
cal electronic banking problem, while trust, perception, privacy, and awareness are
identified as major challenges in E-Banking adoption (Gikandi and Bloor 2010).
Electronic banking program includes the provision of user-friendly banking ser-
vices (Pikkarainen et al. 2004; Aldás‐Manzano et al. 2009). The authors reported
that the introduction of e-banking would be acceptable to bank staff, which would
make their work easier. The author used qualitative interview method to evaluate
factors such as access to accounts, transferring funds between accounts, website ser-
vices and further provision of financial services. Online safety and trust were recog-
nized as major challenges of online banking (Weber 2010). The author indicates that
banking partnership influences customer trust. While this study was specifically for
mobile banking, research into broader electronic banking factors with TR variable
may produce better results.
Perceived ease of use (PEOU)
According to Mathieson (1991), PEOU is the customers’ perception that internet

banking will require minimal effort. In other words, customers find easy using web
applications and other Internet Banking Services (IB) (Wang et al. 2003). This is
interesting when you look at the nature of internet banking, it is a self-service chan-
nel. It enables clients to conduct financial transactions. Several studies have con-
firmed the importance of PEOU in customer acceptance of the technology (Ma and
Liu 2004). Therefore, PEOU influences the confidence trend of online banking (IB).
Further, customers have positive views and judgments about their ability to prop-
erly execute IB transactions. Accordingly, PEOU has an impact on the intention and
effects trust indirectly in online banking activities (IB). The research experience
of Al-Qeisi (2009) confirmed this idea and supports the important role of gender-
specific differences in innovative online services. Similarly, Ezzi (2014) confirmed
the relationship between PEOU and IB theoretically for internet banking. Therefore,
assumptions of this study are:
Hypothesis 1: PEOU has a Significant Positive Effect on Adoption.
Infrastructure (INF)
Novaes and Araéjo (2012) provided a simple definition of how to accept the internet
as a new business innovation. Organizations use websites through the Internet as a
communication platform within and between organizations and their stakeholders
(Martyn and Gallant 2012). When a website is converted into an e-commerce tech-
nology, its design allows virtual connection of customer to bank and facilitate other
services like purchasing banking retail products (Basri et al. 2018). In that study, the
introduction of Internet-based information and communication technologies is more

qualified than the use of computer know-hows such as computer hardware, soft-
ware, and Internet connection networks. While the introduction of ICT is seen as an
innovation, this terminology is used by many researchers in technological research
(Han and Park 2017). The introduction the Internet and the exchange of ICT using
technologies like data banks, electronic communications, has helped management
to manage the work activities of organizations (Schomberg and Blok 2019; Novoa
2018). Technology plays an important role in understanding how organization is
formed and how it works. Further, the management of ICT and technical research is
not only limited to technological researches (Bergdahl et al. 2020).
Finally, technology providers can influence innovation (Ismail and Osman 1970).
The IT infrastructure is a central element that supports the adoption of e-banking. If
the country’s IT infrastructure is not well developed and of high quality, the accept-
ance and habit of e-banking will not flourish. The ICT infrastructure includes com-
munication networks, internet connections, computer availability and other hard-
ware and software. The electronics and telecommunications technology environment
operated by a particular company affects the use of ICT. Lack of IT infrastructure is
an obstacle to further growth of the online business. We therefore conclude that the
introduction of e-banking by the ICT industry depends on the availability and reli-
ability of the ICT infrastructure. Trust can be interpreted in many ways, so we illus-
trate its different meanings in the context of telecommunications and ICT systems.
The author further emphasizes the relationship between knowledge and trust. Trust
elements can be broken down into application type, cost, and technical complexity
(Paletta and Dias 2008). Because of the variety of applications and their unique-
ness, it is difficult to formalize trust in the technological environment. However, it is
important to quantify the level of TR in ICT. Trust can be measured and categorized.
Quality of Service (QoS) can, for example, be used objectively (quantitative) or sub-
jectively [e.g., Quality of Experience (QoE)]. There can be many trust level agree-
ments (TLAs), which depend on the level of trust that the user should be aware of,
such as the sensitivity of their personal information and its value for organization.
Blut and Wang (2020) points out that technology eagerness in the development of
trust is a main variable in the introduction and implementation of innovative prod-
ucts and services. It adopts technology and determines the organizational readiness
when technology is introduced. Most governments have adopted Employee Resource
Planning (ERP). An ERP system is a comprehensive computer software and hard-
ware system that allows us to integrate all organizational data and processes it into
central data bank, and provides a secure network. ERP is used in production, logis-
tics, sales, warehousing, invoicing and accounting. It is sometimes also used as man-
agement function. Underlying the exponential background of information and com-
munication technologies is the result of digital transformation or global paradigm.
ICT is used in many sectors of economy including private companies. Accepted and
integrated ICT in Public Sector have the potential to change Public Service Deliv-
ery. Still in many countries, the guidelines for the implementation of eGovernment
are not available. E-Banking is a powerful tool for business intelligence. Especially,
in the banking sector, ICT saves time and brings accountability, effectiveness, and
openness of government. There are many barriers in exploring and realizing this
possibility (Mingaine 2013). A study on e-government showed issues such as lack of

awareness, adoption of electronic services, accessibility of e-government websites,
concerns about trust, security, and privacy. Further, it explored issues such as the
digital laws, public interest in technology, government support, strategic framework
(Stoiciu 2011). Security and perceived security refer to a subjective assessment of
security of electronic payment systems (Oney et al. 2017).
H2: ICT Infrastructure has Significant Positive Effect on Adoption.
Security
Consumers have different experiences and expectations; they can have different per-
spectives on the security of online transactions. This is true even if the electronic
payment system meets all aspects of consumer safety requirements (Kim et al.
2010). When the security in electronic payments is low, clients are unlikely to be
involved in the business unless actions are taken to protect their right (Oney et al.
2017). In fact, some studies show that consumer perceptions of electronic payment
security (EPS) dominate their EPS decisions. Safety and reliability are the primary
concerns to customers who use EPS, and these two are closely related (Belanger
et al. 2002). Hence, the assumed security role related to the alleged belief needs to
be explored. Data safety and security were examined in various dimensions. The
number of results of the linear regression shows that relative usefulness, compat-
ibility with many requests, capacity, knowledge and risk, influence Internet banking.
The security of e-commerce is based on the security of transactions, including pay-
ments, processes, and personal data of the customers (Flavián and Guinalíu 2006).
Bojang (2017), defined electronic commerce security as a type of danger that
have the potential to financially affect data in the form of destruction of data, disclo-
sure of data, data modification and data fraud. Lack of e-security was identified as
a major reason for customers to stop using E-Banking (Meziane and Kasiran 2008).
Disclosure of sensitive individuals’ personal information such as reveling credit card
information creates fear that this information could be compromised (Federal Trade
Commission and United States of America 2011). These high levels of uncertainty
in relation to services provided via online media put the services at risk compared to
physical products (Bucko et al. 2018). A minimum level of interaction with the pro-
viders of services puts customers in doubt, especially if their information has been
compromised or if they suspect that their money has been stolen (Khare et al. 2012).
However, safety and security can be attained through encryption and authentication
of linked websites, and once users have seen that these websites they visited are
protected, they feel secured (Cavoukian and Stoianov 2007). Most of the Custom-
ers are cognitively connected with digital platforms and enjoy using e-banking web-
sites. In short, it is a feeling of security (Darling-Hammond et al. 2020). Presence of
Security improves the adoption of the technology. However, the technological safety
through TAM is always debated. PEOU and perceived usefulness (PU) will not be
able to convey clear picture of technological acceptance behavior. Therefore, further
research are needed on other aspects of Customer Adoption of technology.
Holden and Karsh (2010) suggested specific factors that determine adoption.
Other researchers use additional variables in TAM and called it modified TAM
(Lallmahamood 1970). It is rational to include safety, as previous studies have
shown that safety is one of the serious concerns in adoption (Dixit and Saroj 1970).
Security ideas have an impact on the acceptance of internet banking in develop-
ing countries (Sareen 2015). Recent research has shown that weak internet security
poses a serious threat to consumers because they fear that their data will be compro-
mised and money will be lost (Chen and He 2013). Ethiopian banks suffered finan-
cial losses due to lack of security (Chellappa and Pavlou 2002). They conclude that
online dealings are subject to many safety threats, arguing that consumer confidence
in online dealings is influenced by security perception. They tested online business
transition factors and showed the positive correlation between the Online dealings
and security perception.
H3: Digital Security Infrastructure has Significant Positive Effect on Adoption.
Trust (TR)
TR was defined by Rempel and Zanna (1985), as the general expectation of the cus-
tomer that the word of the company is affirmative. Trust is the foundation of all
types of relationships (Morgan and Hunt 1994). Tyler et al. (2007), conceptualized
trust as “ability” and “reliability”. Indeed, it is widely believed that trust is human
behavior, especially when assessing risk, reputation, satisfaction, and quality of ser-
vice (Zainal et al. 2016; Koller 1988). TR was widely viewed as a significant deter-
minant of consumer preferences and acceptance of IB (Kesharwani and Singh Bisht
2012; Koller 1988). Trust helps citizens to overcome perceived risks in e-govern-
ment. Trust enables people to securely share personal knowledge (Alsaghier et al.
2011). The interest in e-banking factor can be related to trustworthiness (Bülbül
2013). Grabner-Kräuter and Faullant (2008), explains that customers who has low
trust effects their banking transactions. There are also several literatures that empiri-
cally analyze the relationship between TR and adoption (Xie et al. 2017; Filieri et al.
2015; Alzahrani et al. 2017). Hence, this study postulates the following hypothesis:
H4: Trust has a clearly positive effect on adoption.
Adoption
Rogers (2003), described adoptions as the speed with which people accept digi-
tal and electronic technology (p. 221). Most of the previous literature have dealt
with privacy and safety determinants, PEOU, service quality, trust, customer feed-
back, performance, perceived usage rate, and suitability (Alwan and Al-Zubi 2016;
Boateng et al. 2009). According to Boateng et al. (2016a, b), Internet banking adop-
tion is defined as consumer perception on technology, availability of services and
user-friendly online customer service. The introduction of online banking is drawing
researchers’ attention. Current studies use the most common patterns and hypotheses
for technical acceptance, regardless of changes in human behavioral technology.

Trust (TR) is widely recognized as a key factor influencing customers. In fact, the
biggest challenges to IB success depend not only on delivering innovation in bank-
ing, but also on customer attitudes, behavior, subjective norms, and self-confidence
control (Al-Ajam and Nor 2015). Hence, it is vital to know and analyze the main
variables that affect the customers’ intentions and behavior towards the technology.
Research methodology
The results were analyzed with partial least squares (PLS). PLS, is a component-
based process, it is appropriate for theoretical and analytical analysis. In addition,
PLS does not support a standard deviation (SD) of source data (Chin 1998; Gefen
and Straub 2005). PLS-SEM is based on two critical multivariate methods, namely
factor analysis and multiple regression (Hair et al. 2010). With a more complex
model structure, it can be adapted to a relatively limited sample size (Chin 1998).
The constructs used in our study have been recalibrated to meet local needs. Tools
and scales have been developed and implemented to measure perceived ease of
use (PEOU), security (SEC), infrastructure (INF), trust (TR), and adoption (ADO)
(Lee and Turban 2001). In this study, the scale for PEOU is taken from Davis et al.
(1989), INF scale was obtained from Odat (2012), the scale for TR was obtained
from Shen et al. (2010), the scale for SEC was obtained from Zhang (2010) and the
scale for acceptance was obtained from Curran and Meuter (2005). For this analysis,
the population were all customers of CBE in the city of east Addis Ababa. As of
January 31, 2019, commercial bank users report reported that the total number of
customers in eastern Addis Ababa district was 1,656,071, so the study sample size
was based on the Kish (1983) test, which is 179. The author self-administered the
questionnaires using Measurement Model, which contains confirmed scales from
previous studies. The survey tool developed 10 elements for testing five constructs
[4 for Perceived Ease of Use (PEOU), 4 for Security (SEC), 4 for Infrastructure
(INF), 3 for Trust (TR) and 3 for adoption (ADO)] (Table 1).
The questions of the survey used instruments which includes 1—SDA = strongly
contradict, 2—DA = disagree, 3—UN = uncertainty, 4—A = agree, 5—SA = strongly
agree. The sample size includes 179 customers randomly selected from Addis
Ababa, the capital of Ethiopia. Before conducting the questionnaire, the researcher
verbally conveyed the participants about the nature and reason of the study. In addi-
tion, the participants were selected to fill out the questionnaire themselves and,
through personal interviews, asked about those who cannot read and write prop-
erly. Those who managed individual questionnaires were told to take adequate time
(25–35 min). Those who were unable to fill were educated. We asked them to relax
and freely ask questions, if there were some unclear and ambiguous questions in the
Questionnaire. In addition, the researcher assured them that the confidentiality of
their personal data was only used for research purposes and will be kept confiden-
tial. Finally, the researcher thanked all participants for their collaboration in collect-
ing the data.
112
Table 1 Measurement items
Constructs Items Sources
Page 12 of 28
Perceived ease of use PEOU 1 Use of Electronic banking is easy for me Davis et al. (1989)
PEOU 1 My interface with electronic banking is understandable Davis et al. (1989)
PEOU 1 I find E-banking is easy to operate Davis et al. (1989)
PEOU 1 I find it easier to become skillful in operating E-banking Davis et al. (1989)
Infrastructure INF1 I feel bank has good network capacity and bandwidth Odat (2012)
INF2 I feel bank has integrated government systems Odat (2012)
INF3 I feel banks’ database design is easy to integrate Odat (2012)
INF4 I feel banks’ software and hardware are updated, especially security applications Odat (2012)
Trust TR1 I believe CBE service providers keep their promise (trustworthy) Shen et al. (2010)
TR2 I believe CBE service providers protect customers’ interests in mind (protect customer’s/ Shen et al. (2010)
subscriber right)
TR3 I believe CBE service providers try their best to secure the transactions for users Shen et al. (2010)
E-banking adoption ADO 1 I feel balance enquiries and downloaded bank statements process is easy Curran and Meuter (2005)
ADO 2 I feel fund transfers procedures are easy in Banks Curran and Meuter (2005)
ADO 3 I feel Requesting cheque book or bank certificates procedures are easy Curran and Meuter (2005)
SN Bus Econ
Security SEC1 I feel bank provides good user privacy Zhang (2010)
SEC2 I feel citizens have trust in the Internet and their government Zhang (2010)
SEC3 I feel bank Banks protect user confidentiality Zhang (2010)
SEC4 I feel bank Banks provide protection during the transition process Zhang (2010)
(2021) 1:112
Table 2 shows that 55.86% are male and 44.13% female. This suggests that
males are more attracted in digital technologies than females. Further, the highest
proportion of respondents is between 18 and 30 years of age, followed by the age
of 31–40 years. Participants in the 51–65 and over-65 age groups reject e-banking
because of the technological gap. This also means that young and middle-aged peo-
ple are very likely to use new technologies for electronic banking, and CBE can
also benefit from the middle age group (18–50) as potential customers. At the Bach-
elors degree level, almost all respondents were using e-banking. The second and
third largest number of respondents are those who are MA and higher. This result
is strong evidence that most respondents have a better educational background for
access to the CBE’s e-banking system. In addition, the data show that respondents
had good information and knowledge to answer questions. Finally, the income level
of most of the respondents was between 5001 and 7000 ETB per month, followed
by those with an income level of less than 3000 ETB per month. Arrangements are
being made regarding the ability of individuals who may be able to use and ben-
efit from e-banking services effectively. In addition, several methods can be used to
analyze reliability. In Table 3, Cronbach Alpha tests construct’s internal reliability
(Avkiran 1994). The alpha score for all constructs PEOU, TR, ADO, SEC and INF
in Table 3 is higher than 0.70, indicating the internal consistency between five con-
structs (Gliem and Gliem 2003). The probable cause of this high alpha score may be
Table 2 Demographic Characteristics Frequency %

characteristics of respondents
(N = 179) Gender
Male 100 55.86
Female 79 44.13
Age (in years)
18–30 50 27.93
31–40 42 23.46
41–50 45 25.13
51–65 30 16.75
65 and above 12 6.00
Education
Primary 2 1.1
Secondary 16 8.9
Diploma 22 12.3
Bachelor’s 97 54.2
Master’s and above 42 23.5
Income
Less than 3000 birr 34 19.0
3000–5000 birr 27 15.1
5001–7000 birr 52 29.1
7001–9000 birr 27 15.1
9001–11,000 birr 15 8.4
Above 11,000 birr 24 13.4
that it has strong internal reliability. Table 3 shows the mean, SD (standard devia-
tion), and Cronbach alpha (α) for all selected constructs in our model.
Measurement model
There are several methods of analyzing the data. In this analysis, the confirmatory
factor analysis (CFA) was summarized for each sample for validation purposes
(Awang 2012). The results are shown in Table 4. On the basis of these results, it is
possible to decide for each construct the load factor. The correlation (R2) should be
above 0.60 (Awang 2012). After carefully analyzing the results, it was found that
the load factor for PEOU is 0.7535, 0.8759, 0.7929, 0.8374, the load factor for the
Mediator TR is 0.7849, 0.7898, 0.8074, the load factor for SEC 0.7704 is 0.8483,
0.7338, 0.7994 and the load factor for INF is 0.5616, 0.7813, 0.8504 and the load
factor for the introduction of e-banking is 0.7621, 0.8367 and 0.8183. In line with
the results of this analysis, I report that the pooled computational model meets the
standard of the indices of fit, with multiple elements measuring the same construct.
When the PLS model is used to determine these values, Dijkstra–Henseler’s Rho
estimate of the reliability of the construct values is used for the reflective measure-
ment model. These are collected using the methods developed by the author. This
is calculated using the “model consistent" rating scale for reflective measurement
models. The reliable estimation of the reliability is obtained using PLS route mod-
eling. The value reported in this study has reached an acceptable level. In Table 4,
the allowable value for the composite reliability should be more than 0.70. It is more
robust than Cronbach alpha. Our research results are 0.8884, 0.8366, 0.8477, 0.8681
and 0.8456 for PEOU, TR, ADO, SEC and INF. The average variance (AVE) cor-
responds to the average reliability of the indicator. It takes the value zero. The AVE
is generally considered a one-dimensional test, there is sufficient one-dimensionality
in our model. The AVEs for PEOU, TR, ADO, SEC, and INF are 0.6662, 0.6306,
0.6502, 0.6227, and 0.5834, all of which are greater than 0.50 (Fornell and Larcker
1981).
Tables 5 and 6 show factor correlation matrix. The discriminant validity of our
model meets the criteria because all values of the constructs in their respective col-
umn are higher (HTMT and Fornell–Larcker criterion). Table 7 shows the highest
correlation coefficients between the construct’s TR and ADO (0.60), PEOU and
Table 3 Descriptive statistics of Constructs Mean Standard Cronbach’s

items (N = 179) deviations alpha (α)
Ease of use (PEOU) 2.18 0.80 0.8325

Infrastructure (INF) 2.88 0.88 0.7638
Security (SEC) 2.63 0.92 0.7992
Trust (TR) 2.05 0.95 0.7079
Adoption (ADO) 2.36 0.92 0.7305
Cronbach alpha α (acc. value > 0.70)

Table 4 Results of confirmatory factor analysis

Construct Factor loading Reliability The average
variance extracted
(AVE)
(ρA) CR (ρc /ω)
Perceived ease of use (PEOU) 0.8450 0.8884 0.6662

PREO1 0.7535
PROU2 0.8759
PREO3 0.7929
PREO4 0.8374
Trust (TR) 0.7106 0.8366 0.6306
TR1 0.7849
TR2 0.7898
TR3 0.8074
E-banking adoption (ADO) 0.7291 0.8477 0.6502
ADO1 0.7621
ADO2 0.8367
ADO3 0.8183
Security (SEC) 0.8129 0.8681 0.6227
SEC1 0.7704
SEC2 0.8483
SEC3 0.7338
SEC4 0.7994
INF1 0.5616
INF2 0.7813
INF3 0.8504
INF4 0.8273
Dijkstra–Henseler’s rho (ρA) “acc. value > 0.70”; composite reliability (ρc or ω) > “acc. value > 0.70”;
AVE/variance extracted “acc. value” > 0.50; CR/composite reliability “acc. value” > 0.70
Significance at: *p < 0.05
SEC (0.58). PEOU and ADO had a moderate positive correlation (57), PEOU and
TR (53), INF and ADO (37), INF and TR (44), INF and PEOU (44), SEC and ADO
(50), SEC and TRU (57) as well as SEC and INF (45). While low correlation was
observed between INF and ADO (37). For example, with the increase in Ethiopian
banking infrastructure, security and perceived ease of use, customer acceptance of
these services also increases. Fornell–Larcker requirements analysis and the HTMT
ratio were considered in determinates formulation. For any pair of latent variables,
the factor correlation should be lower than the category source of each variable on
the Fornell–Larcker scale.
Table 5 Discriminant Validity (HTMT criterion)

Construct ADO TR PEOU INF SEC
Adoption (ADO)
Trust (TR) 0.8296
Perceived ease of use (PEOU) 0.7203 0.6866
Security (SEC) 0.6476 0.7469 0.7073 0.5591
DV discriminant validity, HTMT Heterotrait–monotrait ratio of correlations
Table 6 Discriminant Validity (Fornell–Larcker criterion)

Adoption (Ado) 0.6502

Trust (TR) 0.3649 0.6306
Infrastructure (INF) 0.1402 0.1949 0.1937 0.5834
Security (SEC) 0.2578 0.3268 0.3373 0.2044 0.6227
Discriminant validity: Fornell–Larcker criterion. Squared correlations; AVE (diagonal). Squared correla-
tions; AVE in the diagonal
Table 7 Inter-construct correlation
Adoption (ADO) 1.0000

Trust (TR) 0.6041 1.0000
Infrastructure (INF) 0.3744 0.4414 0.4401 1.0000
Security (SEC) 0.5077 0.5717 0.5808 0.4522 1.0000
Structural equation model (SEM) testing
We tested SEM on five constructs. In this context, the TR of the customers in the
banking sector acts as an intermediary between PEOU, SEC, INF and ADO. This
study reports on some of the model adjustment indicators produced by Adanco.
We used all main criteria to check the build in model: absolute fit, incremental
fit, and economical fit (Du Preez et al. 2008). The p value must be significant and
greater than 0.05, the division rule is applied between chi-square and degrees of
freedom (Smith et al. 2002). Our model meets these criteria. The ratio (cmin/df)
is less than 3 (Smith et al. 2002). Our analysis provided an acceptable p value
(significant) while the cmin/df value was within the limits. The measure of good-
ness of fit is based on bootstrapping to determine the probability that the pre-
dicted model shows inconsistency among the correlation matrix and the implicit
model matrix, which is as large as the sample matrix obtained in this study (Dijk-
stra and Henseler 2015). The bootstrap value is derived from the changed exam-
ple results. This change includes organizing all variables and adding the model-
induced correlation matrix. This approach is called Bollen–Stine bootstrap in
covariance-based SEM (Bollen and Stine 1992). Since the bootstrap samples dif-
fer in the actual model, the sample data come from a projected model population
and therefore, the model cannot be rejected.
For normalized average residual root SRMR (Hu and Bentler 1998), we came up
with a solution to identify the empirical correlation matrix. The closer the Euclidean
matrix to the SRMR, the better is the theoretical model. An SRMR value of 0 is
fit, while a value of less than 0.05 is indicative of unfit (Lee and Hsu 2013). Stud-
ies show that SRMR values of 0.06 or higher can be considered good for models
(Sarstedt et al. 2014). The variance-specific SRMR limit is 0.08 (Hu and Bentler
1999). The SRMR passes quality mark in our model is 0.0770 (Table 8), which is
within the appropriate limits.
Table 9 and Fig. 2, show hypotheses are supporting the data collected to validate
this model in Ethiopia.
Table 9 shows Path coefficients and hypotheses testing results. The results of the
direct effect in the presence of the mediator TR show significant effects between
PEOU—> ADO (γ = 0.2969, p = 0.0002). In Ethiopian CBE, e-banking adoption
will increase by 29% (approximately), if in Ethiopian Banks’ PEOU is improved
by one standard deviation (SD) and keeping other variables constant. The indirect
effect between ease of use (Peou)—> Trust (TR))—> Adoption (Ado) (0.0254,
p = 0.0254) is also significant, it validates and supports the first Hypothesis (H1),
there is a partial mediation between the two variables PEOU and TR. In addition,
the direct effect relationship in the presence of trust between INF—> ADO is insig-
nificant (γ = 0.0310, p = 0.6477). If the ICT infrastructure at the Commercial Bank
of Ethiopia (CBE) is improved by one SD and keeping other variables constant, the
adoption rate in e-banking will increase by 3% (roughly). The indirect effect rela-
tionship INF—> ADO (γ = 0.0636 and p = 0.0319) is significant. It supports the sec-
ond hypothesis (H2) and confirms the complete mediation effect between ICT Infra-
structure and adoption at CBE. The direct effect relationship in the presence of trust
between Security (Sec)—> Adoption (Ado) is insignificant (γ = 0.1104, p = 0.1521).
If the digital security Ethiopian banks is improved by one SD, keeping other vari-
ables constant, the e-banking adoption rate will increase by 11% (approximately).
The indirect effect relationship between Security (Sec)—> Trust (TR))—> Adop-
tion (Ado) (γ = 0.1269 and p = 0.0028) is significant. It indicates a complete media-
tion effect between security and adoption, therefore it confirms the role of trust in
Table 8 Goodness of model fit Value HI95 HI99

(estimated model)
SRMR 0.0770 0.0719 0.0775
dULS 0.3644 0.2846 0.3300
dG 0.1663 0.1549 0.1695
112
Page 18 of 28
Table 9 Path coefficients and hypotheses testing

Direct effect Original coefficient Standard bootstrap results
Mean value Standard error t value p value Hypothesis decision
Trust (TR)—> adoption (ADO) 0.3689 0.3665 0.0814 4.5315 0.0000 Supported

Ease of use (Peou)—> adoption (Ado) 0.2969 0.2941 0.0790 3.7569 0.0002 Supported
Ease of use (Peou)—> trust (Tr) 0.2579 0.2535 0.0941 2.7404 0.0062 Supported
Infrastructure (Inf)—> adoption (Ado) 0.0310 0.0413 0.0678 0.4571 0.6477 Not Supported
Infrastructure (Inf)—> trust (Tr) 0.1724 0.1731 0.0694 2.4846 0.0131 Supported
Security (Sec)—> adoption (Ado) 0.1104 0.1091 0.0770 1.4331 0.1521 Not Supported
Security (Sec)—> trust (Tr) 0.3439 0.3518 0.0845 4.0693 0.0001 Supported
Indirect effect
Ease of use (Peou)—> trust (TR)—> adoption (Ado) 0.0951 0.0940 0.0425 2.2390 0.0254 Supported
Infrastructure (Inf)—> trust (TR)—> adoption (Ado) 0.0636 0.0633 0.0296 2.1484 0.0319 Supported
SN Bus Econ
Security (Sec)—> Trust (TR)—> adoption (Ado) 0.1269 0.1289 0.0424 2.9942 0.0028 Supported
(2021) 1:112
Fig. 2 Graphical representation of the model
improving relationship between bank and customer, which also supports the third
hypothesis (H3). The direct effect between TR—> ADO (0.3689, p = 0.0000) is also
significant. If TR increases by one SD and keeping other variables constant, the
e-banking adoption rate will increase by 37% (roughly). It supports fourth hypoth-
esis (H4).
Discussion, summary, implication and recommendation
The main objective of this research is to assess the mediation effects of trust in
the PEOU, SEC, INF and ADO in Ethiopia, which is recognized as one of the
least developed countries. The results of the research hypotheses showed a strong
association between the three constructs (PEOU, TR and E-Banking Adoption).
In this study, the Trust Mediating theory was adopted, which defines a signifi-
cant mediating impact of trust on the introduction of e-banking (Kesharwani and
Singh Bisht 2012). Partial mediation resulted from the significant direct effects of
both hypotheses in the presence of Mediator Trust. The positive impact of PEOU
in e-banking shows customer satisfaction with existing e-banking activities in
Ethiopia and shows that customers are satisfied with the activities of the govern-
ment bank.
In Ethiopia, most bank customers are new to banking services; hence data
were collected from the capital, where large populations preferred e-banking to
traditional banking. Therefore, the effects of independent variables are significant
and is mediated through trust. In other words, the simplicity of banking tech-
nology, the high security of interfaces and the modernity of the ICT infrastruc-
ture influence acceptance. A second important aspect shows that while customers
have more access to online banking, they are aware of the benefits it offers. Our
study has shown that expectations for e-banking increase as confidence improves.
Despite the new financial system in Ethiopia, the banks are making technologi-
cal advances. However, they must set a timetable for their new integration and
technological progress to strengthen the country’s financial system. Our study
explains the improvement of e-banking in public banks with technologies that can
boost customer confidence. Although the association between independent vari-
ables is significant, the overall correlation coefficient is low. This also suggests
that improving the usability of electronic interfaces may increase the TR of bank
customers in Ethiopia. A more user-friendly e-banking system can increase cus-
tomer confidence in public banking and, thus, increase the reputation of e-bank-
ing acceptance among customers. The e-banking sector in Ethiopia needs more
financial support from politicians for the success of e-banking across the country.
With the improvement of the banking sector, which is the backbone of Ethiopia,
Ethiopia’s GDP will improve (Abugamea 2016).
Contributions
From a theoretical point of view, this model aims to provide an empirical and more
detailed description of the key factors that strengthen confidence in TAM, and the
result is also a reflection to the theory of marketing relationships. While electronic
banking is an early phase of the new banking technology accepted by the bank’s gen-
eral customers, the current model is more suitable for service providers (Ethiopian
Commercial Bank). Government needs to redevelop all financial banking policies
around trust. This result would inspire Ethiopian banks to develop technologies that
not only generate revenue, but also create lasting confidence in advanced banking
technologies. To improve this, CBEs’ retail banks can further reduce the problems
of ATMs and mobile banking across the country. Banks need to develop the technol-
ogy ecosystem and ensure that customers stay with the bank. Our model is more
advantageous than TAM in Ethiopia or other related models as it offers a TR fac-
tor that affects the bank’s website, ATMs, and the Internet. TAM does not examine
these e-banking functions in detail. Another important observation of our analysis
is that websites that communicate more with users and show customers’ trust in the
bank get more traffic (Jiang et al. 2010). In our study, MBirr functionality (domestic
money transfer through digital banking on the phone) enriches existing literature on
key elements for the growth and success of e-banking in Ethiopia. It would be use-
ful for future researchers to understand and develop more detailed recommendations
and how to improve the acceptance and use of online banking services by consum-
ers with other variables such as door-to-door cash payments and electronic checks.
They can investigate important determinants of websites and assess the impact of
websites on the adoption. It has been found that the current model of technology
introduction is consistent in assessing the behavior of electronic users. The results of
the research suggest that PEOU has become a key factor in predicting methodologi-
cal effects. The analysis was completed using structural equation modelling (SEM)
which confirms causality and empirically monitors the factors for customers’ deci-
sion to use online banking.
The theoretical context of this research is guided by relationship marketing
theory, which seeks to retain long-term consumer relationships (Morgan and Hunt
1994). Using the trust as an intermediary, this research has led to the theory that the
suggested path could be perceived ease of use (Peou)—> trust (TR))—> adoption
(Ado). In innovation diffusion theory, the suggested path could be Infrastructure

(Inf)—> trust (TR))—> adoption (Ado). The relationship between banks and cus-
tomers depends on trust (Adamson et al. 2003). The relationship between the intro-
duction of e-banking and customers also depends on the perceived user-friendli-
ness technology (Featherman et al. 2010). The national policy of Ethiopia aims at
achieving good governance; however, good governance could be partially implanted
through good e-banking system. This study highlights confidence in technology will
improve confidence in Ethiopia’s financial sector, since CBE is the backbone of the
country. Further, for the first time, we established trust mediation between three var-
iables ICT infrastructure, security, and adoption. This would allow the researcher to
analyze the importance of combined variables in banking sector. This finding com-
plements the original literature on PEOU, TR and its implications for the banking
sector (Al-Sharafi et al. 2017). As per TAM, PEOU have an effect on technology
reception (Davis 1989).
This study helps to determine the motivation of Ethiopian customers to use
e-banking adoption by public in Ethiopia and helps researchers compare the e-adop-
tion determinants of this study with the e-banking determinants of developed coun-
tries. This study could also help Ethiopian financial strategists in the banking sec-
tor to revise policy and focus more on digitization. Because the indirect effect of
behavioral mediators’ trust in e-banking security, infrastructure, and perceived ease
of use is important. Digitization has become an absolute necessity not only in devel-
oped countries, but also in very poor countries. Therefore, strategic managers in the
Ethiopian banking sector should use the determinants of this study to closely moni-
tor behavioral changes in customers based on the results of this study. It will help
them develop procedures that make e-banking easier for customers. Banks should
hire relevant staff in each branch to train and support people who may have difficulty
contacting the bank online. African countries, including Ethiopia, must prepare for a
more competitive global market, which is constantly evolving with its technological
products and services. The study also showed that older people in African countries
are less likely to use e-banking. This is because the educational revolution is a new
phenomenon in African countries, even in Ethiopia it began in 1974 (Milkias 2006).
Conclusion
The study was carried out to realize the factors that predict the purpose and adoption
of e-banking by Ethiopian customers. A concept model with four factors (PEOU,
SEC, INF, and TR) is proposed. Empirical data was collected from 179 e-banking
customers currently licensed in Ethiopia. These data were analyzed using the SEM
method. As mentioned earlier, both the relevance of the model and its predictabil-
ity were largely confirmed by the results. In addition, all proposed causal paths for
the significant values have been integrated. This study will help to broaden public
knowledge of e-banking and technological acceptance by providing a better insight
into the issues that practitioners and researchers can think about when addressing
consumer acceptance of e-banking. Our results have already shown that adopting
PEOU, SEC, INF has a moderate and significant effect. However, trust has been
positively linked to trust in e-banking. The idea for this study arises from the model
of the introduction of electronic banking technology (Vukovića et al. 2019). In the
underdeveloped countries, the greater overall diversity of the e-banking accept-
ance model shows the value of TR and PEOU. It is recommended that the Ethio-
pian banking sector focus on e-banking. To reduce the confidence factor, banks need
to better train their customers in the use of technology and e-banking. For exam-
ple, customers can receive training or industry facilitation to guide them through
the steps of connecting to simple electronic transactions. Any problems that may
arise can be easily resolved from time to time to remind consumers of their long-
lasting trust in their e-banking and encouraging them to use of e-banking. Consumer
confidence in e-banking is, therefore, followed by confidence and intent to use
e-banking (Compeau and Higgins 1995). Banks can improve the intensity of trust by
implementing e-banking structural assurance policies. This can help, for example,
increase customer trust in e-banking apps (Yousafzai et al. 2010). However, TR can
also be discovered from sources such as accurate and valid bank information. Ethio-
pian banks can exercise control by keeping their customers close to them. Trust can
also be built up by demonstrating ease of using technology. It can be demonstrated
at the branch office in person or can be included in written communications such as
bank statements.
Limitations and directions for future research
Future researchers can use results of model in other African countries to define and
measure the factors driving the introduction of e-banking. In this research all the
variables that impact the adoption of online banking were selected in this study.
This study uses cross-sectional study and tests the behavior of a banking customer.
The causal link between TR and digital fraud has not been investigated. However,
this study shows that trust is an explanatory e-banking adoption variable. In addi-
tion, future research may examine the links between trust and behavioral intentions
of online banking usage and technology diffusion in general. A conceptual model
could be developed for understanding how customers use Internet technologies in
different cultures and countries. Cultures include TR and perceived risk that differ
substantially across cultural groups. Explain. Future work will continue to focus on
recognizing and classifying intercultural technology deployment as important for
multinational companies seeking access to new countries offering similar online
banking services.
Funding This research received no specific grant from any funding agency in the public, commercial, or
not-for-profit sectors.
Data availability All data generated or analysed during this study are included in this published article.
Declarations
Conflict of interest All the authors announces that there is no conflict of interest.
Ethical approval This article does not contain any studies with human participants or animals performed
by any of the authors.
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Electronic Banking Adoption in Ethiopia: An Empirical Investigation

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SN Bus Econ (2021) 1:112

Electronic banking adoption in Ethiopia: an empirical

Received: 29 October 2020 / Accepted: 19 July 2021

Keywords Trust · Perceived ease of use · Infrastructure · Security · E-banking

Information communication technology (ICT) reduces the error rate in financial

relationship, an appropriate modeling technique should be applied. To assess the group

As shown in Fig. 1, five factors—perceived ease of use (PEOU), ICT infrastruc-

Adoption and effectiveness of electronic banking

Perceived ease of use (PEOU)

According to Mathieson (1991), PEOU is the customers’ perception that internet

introduction of Internet-based information and communication technologies is more

possibility (Mingaine 2013). A study on e-government showed issues such as lack of

for technical acceptance, regardless of changes in human behavioral technology.

Table 2 Demographic Characteristics Frequency %

Table 3 Descriptive statistics of Constructs Mean Standard Cronbach’s

Ease of use (PEOU) 2.18 0.80 0.8325

Cronbach alpha α (acc. value > 0.70)

Table 4 Results of confirmatory factor analysis

Perceived ease of use (PEOU) 0.8450 0.8884 0.6662

Table 5 Discriminant Validity (HTMT criterion)

DV discriminant validity, HTMT Heterotrait–monotrait ratio of correlations

Table 6 Discriminant Validity (Fornell–Larcker criterion)

Adoption (Ado) 0.6502

Adoption (ADO) 1.0000

Structural equation model (SEM) testing

Table 8 Goodness of model fit Value HI95 HI99

Table 9 Path coefficients and hypotheses testing

Trust (TR)—> adoption (ADO) 0.3689 0.3665 0.0814 4.5315 0.0000 Supported

Fig. 2 Graphical representation of the model

Discussion, summary, implication and recommendation

(Ado). In innovation diffusion theory, the suggested path could be Infrastructure

Limitations and directions for future research

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Table 2 Demographic Characteristics Frequency %

Table 3 Descriptive statistics of Constructs Mean Standard Cronbach’s

Table 4 Results of confirmatory factor analysis

Table 5 Discriminant Validity (HTMT criterion)

Table 6 Discriminant Validity (Fornell–Larcker criterion)

Table 8 Goodness of model fit Value HI95 HI99

Table 9 Path coefficients and hypotheses testing

Fig. 2 Graphical representation of the model