ASSESS THE CHALLNGES OF ELECTRONIC BANKING

(IN CASE OF COMMERCIAL BANK OF ETHIOPIA, HOSSANA

BRANCH)

A SENIOR ESSAY RESEARCH SUBMITTED TO DEPARTMENT

OF MARKETING MANAGEMENT IN PARTIAL FULFILMENT
OF THE REQUIRMENT FOR THE BACHELOR OF ART (BA)
DEGREE IN MARKETING MANAGEMENT

BY: MUBAREK HAIREDIN

ID No: 1400758

ADVISOR :ABEL M. (MA)

WACHEMO UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MARKETING MANAGEMENT

JUNE , 2023

HOSSANA, ETHIOPIA
Acknowledgements
First and for most, I would like to thank my almightily of GOD who made me lead by
life till this movement. My thanks also go to my advisor Mr Abel Mezgebe (MA). For
his constructive and professional help in doing this research. My special thanks
extended to my families for their support throughout my life and also for my friends
to thank every individual who share their contribution directly or indirectly to my
successes.

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 TABLE OF CONTENTS

Acknowledgements.........................................................................................................i
LIST OF TABLES........................................................................................................iv
List of figure...................................................................................................................v
Acronyms......................................................................................................................vi
Abstract........................................................................................................................vii
CHAPTER ONE............................................................................................................1
1. INTRODUCTION....................................................................................................1
1.1 Background of the study..................................................................................1
1.2 Statement of the problem.................................................................................2
1.3 Research questions...........................................................................................3
1.4.1 General Objective......................................................................................4
1.4.2 Specific Objective.......................................................................................4
1.5 Scope of the study.........................................................................................4
1.6 limitation of the study......................................................................................5
1.8 Organization of the paper.................................................................................5
CHAPTER-TWO...........................................................................................................7
LITERATURE REVIEW..............................................................................................7
2. INTRODUCTION.............................................................................................7
2.1. Theoretical Review e-banking........................................................................7
2.3. Evolution of E-Banking..................................................................................8
2.3.2. Types of Electronic banking........................................................................8
2.3.3 Internet banking............................................................................................8
2.3.4 Debit card......................................................................................................9
2.3.5 Credit Card....................................................................................................9
2.3.8 Automated Teller Machines (ATM)...........................................................10
2.3.9. Point of Sale Terminal...............................................................................10
2.4. Importance of E-Banking..............................................................................10
2.4.1. from the Banks Point of View....................................................................11
2.4.2. Benefits from the Customers Point of View..............................................12
2.4.3. Benefits to General Economy....................................................................13
2.5. E-Banking Risks...........................................................................................14
2.5.1. Typical Security Technologies Applicable to Control System Networks. 15

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 2.5 Empirical literature........................................................................................17
CHAPTER-THREE.....................................................................................................19
RESEARCH METHODOLOGY.................................................................................19
3.1Description of study area................................................................................19
3.2 Research design..............................................................................................20
3.3 Research approach.........................................................................................20
3.3.1 Target population................................................................................20
3.3.2 Sampling technique and method.........................................................20
3.3.3 Sample size determination..................................................................20
3.4 Source of data.................................................................................................21
3.5 Method of data collection..............................................................................22
3.6 Data analysis..................................................................................................22
CHAPTER FOUR........................................................................................................23
4. DATA ANALYISIS, FINDINGS, AND DISCUSSION.........................................23
4.1. Introduction...................................................................................................23
4.2. Demographic information of the respondents...............................................23
4.3. Results and Discussions of Electronic Banking............................................25
CHAPTER FIVE..........................................................................................................43
5. SUMMARY, CONCLUSSION AND RECOMMENDATION......................43
5.1. Summary of major findings..........................................................................43
4.1. Work plan......................................................................................................47
4.2. Budget schedule....................................................................................................47
References....................................................................................................................49
APENDIX....................................................................................................................51
Part 1: Demographical Information.............................................................................51
Part two: Electronic banking questions for employee................................................52
Part three: e-banking performance questions...............................................................55
Part 4 Questionnaire to be filled by customers...........................................................55

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LIST OF TABLES
Table 4.1 Respondents’ Demographic profile.............................................................23
Table 4.2 service interruption......................................................................................25
Table 4.3 what are the different electronic channels through which the bank is
delivering the service to its customers? You can choose more than once...................26
Table 4.4 what options are available to the customer once they have accessed e-
banking?.......................................................................................................................26
Table 4.5 adoption of e-banking..................................................................................27
Table 4.6 Challenges of E-banking discussion............................................................27
Table 4.7 risks involved in adopting/ using electronic channels.................................33
Table 4.8 Types of risks...............................................................................................34
Table 4.9E-banking performance evaluation...............................................................34
Table 4.10: characteristic of respondent......................................................................36
Table 4.11: accesseblity of e-banking and customer willingness to use e-banking
system...........................................................................................................................38
Table 4.12: Question related to e-banking security facality accessibility and
customer awarness about e-banking and their analysis..............................................39

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List of figure

Fig. 1 Map of the Study Area ………………………………………….…………….19

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Acronyms
E-banking Elecronic banking

CBE Commercial bank of ethiopia

ATM Automated teller machine

NBE National bank of ethiopia

E-commerce Electronic commerce

E- payment Electronic payment

Pos point of sale

Ip Internet provider

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Abstract
This study is focus on the asses the challenge of electronics banking in commercial
bank of Ethiopia in Hossana branch. The General objective of this study is to assess
the challenge of electronic banking in Hossana ranch. Descriptive research design will
be employees and customers in this study. The method of sampling technique is
censes sampling to the employees; the researcher uses both primary and secondary
data to identify the problem. Primary data is collect by questioners and secondary data
also collected from the written document and website of the company and related
literature review`s. The data is analyzed through descriptive analysis method.

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 CHAPTER ONE
1. INTRODUCTION
1.1 Background of the study
In a rapidly changing and intensely competitive environment, the banking industry's
success is larrgely dependent on the use of appropriate technology, as well as the
retention of well-trained and motivated employees who can take advantage of the
bank's existing innovation while also striving for better advancement (Abebe Zeleke,
2016).

According to a comparison performed by Million (2019), Ethiopian E-Banking

technology is lagging behind the rest of the world. As a result, cash is still Ethiopia's
most extensively utilized medium of exchange. Despite the fast use of e-banking in
both the developed and developing nations, Ethiopia's financial sector remains behind
in terms of expanding its use of the service. Without a doubt, the banking business is
underdeveloped, especially in light of the increasing quantity of foreign trades, client
demand, and international relations.

Speedy emergent of ICT is knocking the door of each institute in the globe, and
Ethiopian banks would never be exceptional. In the face of fast extension of electronic
payment (E-payment) systems all over the world, Ethiopian’s financial sector cannot
be an exception in expanding and solicitation of technology.ICTs innovation changed
the way of carrying out business transactions and meeting the increasing demands of
customers for the majority organizations. The uses of ICTs in the banking segment
has been seen in terms of its prospective to expand client epicenter, decline
transaction expenses ,get better the quality and appropriateness of response, open
windows of opportunities for promotion and labeling, smooth self-service and facility
customization as well as getting adequate customer communication and relationship.
(Bultum, 2014).

Ethiopia have not passed a legislation regarding E-commerce concerns such as

enforceability of the legitimacy of electronic contracts, digital signatures and
intellectual copy right and restrict the use of encryption technologies and High rates
of illiteracy. Illiterateness rate is a severe issue in the implementation of E-banking in
Ethiopia as it obstructs the ease of access of banking facilities. For inhabitants to

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completely benefit from the E-banking, they would not merely recognize in what way
to read and transcribe but furthermore acquire basic ICT knowledge (Bultum, 2014).

The findings of (Amare, 2020; Saba, 2020; Yabebal, 2020; Yalew, 2015) provide
insight into the obstacles or barriers Ethiopian banks have had in accepting the e-
banking plan. Lack of compitance, illiteracy, low internet connection, poorly designed
ICT equipments, and insufficient government policy enforcement are some of the
major barriers to e-banking system implementation, as are frequent power outages,
fear of risk, and cultural challenges. Increased market competition, third-party
payment collection, NBE directives, and society's increasing demand for e-banking
services, particularly due to the emergence of the Corona or COVID-19 pandemic,
are, on the contrary, the primary driving forces for Ethiopian banks to accept
alternative channel of bank system.

1.2 Statement of the problem

Every company in the world is knocking on the door of rapidly evolving information
and communication technology (Booz & Hamilton (2017), cited in Million) (2019).
As a result, banks are creating technology to assist them in delivering banking
products and services through the most cost-effective channels feasible, including
electronic banking. Electronic banking is a strategy used by banks to keep current
clients while also recruiting new one

E-banking was a fresh technology in Ethiopia which desires a lot of educational input
to service providers concerning the factors distressing e-banking acceptance. The
delivery of service mainly at the office level lead customers to commit longest
transaction time, repetitive transaction errors, service inconvenience, lower
supervision of their bank accounts and lower reliability, etc. Ayana (2012)

CBE at this time provides different e-banking products to customer. But the provided
e-banking products (services) are not adopted (used) as expected. Due to this most
CBE staffs involve to awareness creation to adopt e-banking by the customer but the
challenge of adoption still continuous. In advance, a detailed understanding of the
feature and circumstances that influence developing countries potential to completely
accept and recognize its profit as well as strategic implications can be produced for

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the researchers and practitioners concerning on the encouragement of the expansion
of E-banking in developing nations (Bultum,2014).

Abebe, Z. (2016)points out, no of a legal and regulatory frameworks for e-banking

services is a fundamental barrier discouraging banks from implementing this novel
payment instrument. (Ayana, 2012) also mentions lack of skills related to
implmentations and management of technologies related to electronic banking, as
well as the high cost of e-banking implementation and upper management's resistance
to technological advances, as major barriers to electronic banking acceptance in
Ethiopia. .

E-banking has a lot of benefit in delivering service to both customers and bank. In
Ethiopia several challenges hindered customers and banks easy access to enjoy
electronic banking that helps to reduce cost and times with the technological
advancement in banking sector which has been entertained elsewhere in Africa and
the rest of the world. This is due to lack of awareness or competition among banking
industries, poor internet access. The modern E-banking methods like ATMs, Debit
cards, Credit cards, Tele banking, Internet banking, Mobile banking and others are
new to the Ethiopian banking sectors (Ayana, 2012)

One of the major hindrances is lack of appropriate technological infrastructure to

support the service. The financial institution also argues with internet challenges
including its congested connection, security and quality of service (Megersa, 2010).
There is also lack of specialists with the adequate technological skills to build that
infrastructure. It might also be a challenge to convince customer, especially those who
are not familiar with using the internet, and who might find it hard to try to deal with
a service that they consider confusing and frustrating.

This study will attempt to identify challenges of E-banking in commercial bank of

Ethiopia, Hosanna branch.

1.3 Research questions

The outcome of this study is going to address the following basic questions:
1. What are the main problems of e-banking of commercial bank of Ethiopia in
Hossana branch?

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2. How the performance of e-banking looks like in commercial bank of Ethiopia in
Hossana branch?
3. What will be done the bank to solve problems it is currently facing?
1.4 Research Objective
1.4.1 General Objective
The general objective of this study was to assess the challenges of electronic banking
in Commercial Bank of Ethiopia in case of Hossana branch.

1.4.2 Specific Objective

The specific objectives of this study are the following:
1. To assess the main problems of E-banking in commercial bank of Ethiopia
Hosanna branch.
2. To examine the performance of E-banking activities of commercial bank of
Ethiopia, Hosanna branch.
3. To identify the measures taken to solve the problems for the growth of E-banking
in commercial bank of Ethiopia Hosanna branch.
1.5 Scope of the study
The researcher intends to investigate the challenges of e-banking in commercial bank
of Ethiopia Hosanna branch. Therefore it was delimited to the challenges/problems of
the service and therefore the result cannot be extended to other variables.

Theoretically, The researcher was only focus on the challenges of e-banking because
the main purpose of the research was to identify or to find a solution for a given
problems, fixing them as much as possible that why the researcher focus only on the
challenges and also the researcher choose one branch because it will be very costly
and time consuming .That’s why the researcher accepted to do his research in
commercial bank of Ethiopia hosanna branch, and also all branch of CBE perform
the same routine in terms of electronics banking system.

Methodologically, among the types of non-probability sampling the researcher used

convenience sampling technique to select each respondent due to difficulty to have
list of E-banking customers.Based on the purpose of the study, this research was

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descriptive type of research design which describes the performance and challenges of
e banking as it is.

Again, the geographical scope of the study was situated within the Hosanna town.
However, CBE branches within the hossana town are many and as such it is
practically impossible for the researcher to study all the customers in these branches.

Finally, this study was cross-sectional that examines a particular phenomenon (or
phenomena) from Dec 14-May 30 /2023.

1.6 limitation of the study

The focus of this study was to assess the challenges of electronic banking in CBE
Hosanna branch .Owing to the initial stage of e-banking services available in
Ethiopia, it was very difficult to get secondary data as well as literature in this area
from the country perspective due to this it was very difficult to get well experienced
and knowledgeable expert on the area that could give the researcher a broader
perspective on the matter.The researcher also expects to face that respondents will not
properly respond to the whole content of the questionnaire due to misunderstandings,
lack of knowledge, or commitment.

1.7 Significance of the Study

The significance of the study was to assess the challenge of electronics banking. It is
also important to use effective and efficient type electronic banking and it helps to
increase growth technology specially in banking service. Apart from contributing to
the literature, the paper also have important practical implications for bank managers
to develop a frame work for assessing the challenge of electronic banking service.
Finally, this study can be used as a foundation for other researchers who would like to
undertake research on similar and/ or related area of study. The study area was used as
a guide line to suggests and shows ways to solve the problem and improve
understanding in customer service officer training practices.

1.8 Organization of the paper

The paper consist of four chapters. The first chapter deals with the introduction part of
the study that consists of background of the study, statements of the problem,
objectives of the study, significances of the study, scope of the study and limitation of

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the study. Chapter 2 contain a review of the related literature, in chapter three the
research methodology of the study will be discusses. In chapter four data analysis,
demographic information of the respondents, results and discussion of electronic
banking .Finally, the last chapter deals with the summary of findings, conclusions and
recommendations that is forwarded both by the respondents and by researcher based
on the result obtain

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 CHAPTER-TWO
LITERATURE REVIEW
2. INTRODUCTION
This chapter contains both the theoretical and empirical review of the study. The
theoretical framework includes: introduction to e-banking, definition of e-banking,
evolution of e banking, e-banking channels, importance of e-banking, e-banking risks
and banking in Ethiopia respectively. In addition, it also includes empirical review of
the study from different researchers in different countries.

2.1. Theoretical Review e-banking

The theoretical literature helps the researcher to identify clearly the variables of the
study; provides a general frame work for data analysis; and helps in the selection of
applicable research design.

2.2. Definition of E-Banking

Michael M.(2016)defines Electronic banking, or e-banking, is the term that describes

all transactions that take place among companies, organizations, and individuals and
their banking institutions.E-banking is the most modernized automated delivery
approach of banking products and services through e-communication channels. E-
banking approach that enables customers of a bank or other financial institution to
conduct a range of financial transactions through the website. Internet banking has
appeared as one of the most profitable e-commerce applications

Muteteri (2015) describes e-banking as an associate degree electronic association

between a bank and a client so as to arrange, manage, and manage monetary
transactions.

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. Okoye, Victor( 2013).

E-banking reduces time and energy spent by the customers as they do not have to
remain in long lines in front of banks to get their simple jobs done. It is simple as well
as suitable to do transactions using e-banking. Due to e-banking, the banks receive

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pleasure from many reward like wider and deeper accomplish to the clients, more
rapidly time to advertise, capability to begin new products and services punctually,
larger client trustworthiness etc. E-banking technologies have grown rapidly in most
recent years, and the obtain ability of variety of products has directed to in an increase
in the acceptance between clients. These technologies comprise direct credit,
computer banking, deposited value cards, and debit cards. It permits corporation to
create new business links from different global business alliances, test new products
and services, and make market research and other enquiries all at a minimal cost both
financial and otherwise Agarwal, P. & Josh C.K.(2016)

2.3. Evolution 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 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).

2.3.2. Types of Electronic banking

Currently there are a number of electronic banking products. The followings are most
widely used in the banking industry.

2.3.3 Internet banking

Merugu (2018) Define the online/Internet banking is becoming a popular tool to
attract new customers and deliver customer satisfaction. A fundamental understanding
of factors causing customer satisfaction in online banking has attained greater

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prominence as more and more banks compete to offer superior services to their clients
making it imperative for banks to align their strategies in response to changing
customer’s needs and technology.

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 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. Prince (2015)

2.3.4 Debit card

Debit card is a banking card enhanced with ATM and POS features so that it can be
used at merchant locations. Debit cards allow you to spend only what is in your bank
account. Benefits of using a debit card include making the payment process at the
checkout counter quicker and more convenient, eliminating the need to carry a Check
book and a lot of cash, using it at locations where personal checks are not accepted,
and reducing the possibility of loss or theft of cash (Okoye, 2013).

2.3.5 Credit Card

A credit card is different from a debit card in that it does not remove money from the
user‘s account after every transaction. In the case of credit cards, the issuer lends
money to the consumer (or the user) to be paid to the merchant. A credit card allows
the consumer to revolve their balance at the cost of having interest charged. The
parties involved in a credit card transaction include cardholder, card issuing bank,
merchant, acquiring bank, independent sales organization, merchant account, credit
card association, transaction network, and affinity partner (Kassahun , 2016).

2.3.6. Mobile Banking

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

9
under this category. This system uses short text messaging system to inform
customers of their account. Fikerselassie(2017).

According to Dragos (2014), mobile-banking can be defined also as an account

management tool which can be accessed through the cell phone. This up to date
service emerge on the market as an option to electronic banking and internet banking
services and it makes easy entrance to accounts and banking procedures through the
mobile phone. This service can be simply used whether in the home country or
oversea.

2.3.8 Automated Teller Machines (ATM)

This is a computerized telecommunications device that provides the customer of a

financial institution with space to financial transaction in a public space without the
need for a human clerk or bank teller. Using an ATM, customers can access their
bank accounts in order to make cash withdrawals and check their account balance.
ATM‘s rely on authorization of a financial transaction by the card issuer or other
authorizing institution via the communications network. Many banks charge ATM
usage fees for transactions (Kassahun, 2016)

2.3.9. Point of Sale Terminal

Point of sale 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).

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.

2.4. Importance 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

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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).

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). .Some of these major benefits are described below.

2.4.1. from the Banks Point of View

E -banking has changed the traditional retail banking business model in many ways,
for example by making it possible for banks to allow the production and delivery of
financial services to be separated into different businesses. This means that banks can
sell and manage services offered by other banks to increase their revenues. This is an
especially attractive possibility for smaller banks with a limited product range. E-
banking has also resulted in increased credit card lending as it is a sort of transactional
loan that is most easily deliverable over the internet. Jannatul, M.N. (2010).

Electronic banking enables banks to reduce cost of communication, paper works, etc
and also it reduces costs in setting up a branch and the resources to process
transactions . Also banks providing mobile banking services can have competitive
advantage over those banks, which are not providing this service. It has also been
found to increases customer loyalty that is using mobile banking customers need not
to go in banks braches for fund transfer or for information, which creates a good
relationship between banks and customers which helps in increasing loyalty towards
the banks. Banks can utilize the time saved by the channel migration of customers to
mobile banking for expansion of business through better marketing and sales
activities (Sunil and Durga 2013).

Shifu (2014), in his study concluded the following as major benefits of e- banking for
the bank:
1. E-banking helps in reducing the cost of delivering the services to the customers.
2. It provides banks with competitive advantage among their peers.
3. Through websites, banks can earn revenue by promotional activities.

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4. The growth of E-banking has greatly helped the banks in controlling their
overheads and operating cost.
5. Many repetitive and tedious tasks have now been fully automated resulting in
greater efficiency, better time usage and enhanced control.
6. The rise of E-banking has made banks more competitive. It has also led to
expansion of the banking industry, opening of new avenues for banking operations.
7. Electronic banking has greatly helped the banking industry to reduce paper work,
thus helping them to move the paper less environment.
8.Electronic banking has also helped bank in proper documentation of their records
and transactions.
9.The reach and delivery capabilities of computer networks, such as the Internet, are
far better than any branch network.
2.4.2. Benefits from the Customers Point of View
Customers don’t need to stand at the bank counter for various enquiries about their
account. Customers can save their valuable time and travelling cost in reaching the
bank for their financial transactions (Sunil and Durga 2013). The main advantages of
e-banking for corporate customers as follows:
1. Reduced costs in accessing and using the banking services.
2 .Increased comfort and timesaving — transactions can be made 24 hours a day,
without requiring the physical interaction with the bank.
3. Quick and continuous access to information: Corporations will have easier access
to information as, they can check on multiple accounts at the click of a button.
4. Better cash management: E-banking facilities speed up cash cycle and increases
efficiency of business processes as large variety of cash management instruments are
available on internet sites. For example, it is possible to manage company’s short term
cash via internet banks. (investments in over-night, short- and long term deposits, in
commercial papers, in bonds and equities, in money market funds). Private customers
seek slightly different kind of benefits from e-banking.
5. Reduced costs: This is in terms of the cost of availing and using the various
banking products and services.

6. Convenience: All the banking transactions can be performed from the comfort of
the home or office or from the place a customer wants to.

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7. Speed: The response of the medium is very fast; therefore customers can actually
wait till the last minute before concluding a fund transfer.

8.Funds management: Customers can download their history of different accounts and
do a “what-if” analysis on their own PC before affecting any transaction on the web.

2.4.3. Benefits to General Economy

Electronic Banking as already stated has greatly serviced both the general public and
the banking industry. This has resulted in creation of a better enabling environment
that supports growth, productivity and prosperity. Besides many tangible benefit in
form of reduction if cost, reduced delivery time, increased efficiency, reduced
wastage, e-banking electronically controlled and thoroughly monitored environment
discourage many illegal and illegitimate practices associated with banking industry
like money laundering, frauds and embezzlements. Agarwal, P. & Josh C.K.(2016)

Benefits from the economical’ point of view E-banking served so many benefits not
only to the bank itself, but also to the society as a whole. Agarwal, P. & Josh C.K.
(2016).

E-banking made finance economically possible:

i. Lower operational costs of banks

ii. Automated process

iii. Accelerated credit decisions

iv. Lowered minimum loan size to be profitable.

Potentially lower margins:

i. Lower cost of entry

ii. Expanded financing reach

iii. Increased transparency.

Expand reached through self-service:

i. Lower transaction cost

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ii. Make some corporate services economically feasible for society

iii. Make anytime access to accounts and loan information possible.

2.5. E-Banking Risks

Although e-banking has bright prospects, it involves some financial risks as well. The
major e-banking risks according to Fenuga, O.J (2010). include:

Operational risks .Banks faces three main types of operations risk: such as volume
forecasts, management information system systems and Outsourcing.

Accurate volume forecasts have proved difficult - One of the key challenges
encountered by banks is how to predict and manage the volume of customers that they
will obtain. Many banks going on-line have significantly misjudged volumes. When a
bank has inadequate systems to cope with demand it may suffer reputational and
financial damage, and even compromises in security if extra systems that are
inadequately configured or tested are brought on-line to deal with the capacity
problems. The second type of operations risk concerns management information
systems. Again, this is not unique to E-banking. Banks may have difficulties in
obtaining adequate management information to monitor their eservice, as it can be
difficult to establish/configure new systems to ensure that sufficient, meaningful and
clear information is generated. Such information is particularly important in a new
field like e-banking. Finally, a significant number of banks offering e-banking
services outsource related business functions, e.g. security, either for reasons of cost
reduction or, as is often the case in this field, because they do not have the relevant
expertise in-house.

Security risk: Security issues are a major source of concern for everyone both inside
and outside the banking industry. E-banking increases security risks, potentially
exposing hitherto isolated systems to open and risky environments. Security breaches
essentially fall into three categories; breaches with serious criminal intent (e.g. fraud,
theft of commercially sensitive or financial information), breaches by ‘casual hackers’
(e.g. defacement of web sites or ‘denial of service’ - causing web sites to crash), and
flaws in systems design and/or set up leading to security breaches (e.g. genuine users
seeing / being able to transact on other users’ accounts).

14
Reputational risk: This is considerably heightened for banks using the Internet. For
example, the Internet allows for the rapid dissemination of information, which means
that any incident, either good or bad, is common knowledge within a short space of
time. Internet rumors can easily become self-fulfilling prophecies. The speed of the
Internet considerably cuts the optimal response times for both banks and regulators to
any incident. Banks must ensure their crisis management processes are able to cope
with Internet related incidents (whether they be real or hoaxes).
Any problems encountered by one firm in this new environment may affect the
business of another, as it may affect confidence in the Internet as a whole. There is
therefore a risk that one rogue e-bank could cause significant problems for all banks
providing services via the Internet. This is a new type of systemic risk and is causing
concern to e-banking providers.
In addition, legal risks (e.g. without proper legal support, money laundering may be
influenced); Strategic risks; credit risks; market risks; and liquidity risks are also e-
banking risks. Therefore, identification of relevant risks, and formulation and
implementation of proper risk mitigation policies and strategies are important for
banks while performing e banking.
2.5.1. Typical Security Technologies Applicable to Control System
Networks
According to Worku, G. (2010), the following are among the major typical security
technologies applicable to control System Networks:

Firewalls: A firewall is simply a program or hardware device that filters the

information coming through the Internet connection into the private network or
computer system. If an incoming packet of information is flagged by the filters, it is
not allowed through. A firewall limits a control systems network access to specific
ports and protocols from specified networks. It can also provide the ability to create
distinct security zones using Network.

Address Translation (NAT), which enables multiple areas of a private network to

access the Internet using a single public IP address and Virtual Private Networks).
The firewalls main task is to regulate traffic between network segments at different
trust levels for example, between the Internet, as a zone with no trust, and the internal
control network, a zone of higher trust.

15
Intrusion Detection and Protection: its appliance provides a more advanced layer of
defense. Such defense (known as intrusion prevention system) can be deployed to
help prevent attacks, or simply to detect attacks using intrusion detection systems.
Information is sent through the network in small blocks of data known as packets. It
goes deeper than a firewall by assessing each packet based on the network protocols,
the context of the communication, and it’s tracking of each session (the time the user
spends communicating on the network). Akin to antivirus software on a desktop, it
contains a large repository of signatures that help to identify potential attacks by
matching attempts to exploit known vulnerabilities.

Authentication/Authorization Systems: Authentication and authorization systems

protect applications by verifying user identity, providing access to devices based on
that users role and privilege level, and logging all access attempts in order to audit any
infringement or misuse of critical plant functions. The use of passwords alone is not a
secure enough mechanism, yet it is still the norm to find devices in the field that rely
on the manufacturers default password. Most security standards require two-factor
authentication, which requires the combination of two methods of identification, such
as a password and a certificate.

Network Access Control: This might include ensuring those users and their laptops or
other devices meet a minimum baseline of security in order to gain access. Such
policies can be based on various criteria, such as user identity, device identity, device
health, and device and/or network location. A solution including it ensures that both
user and device properly make the appropriate connection to the appropriate network.
It also ensures that users and their devices meet all authentication and security
policies. Since network access control applies to users as well as devices, this can
become a reliable method for rogue device mitigation over wireless or wired
networks.

Encryption of Critical Data: Encryption is the process of transforming information,

such as a document or important message, by using an algorithm or cipher to make it
unreadable to anyone who does not have the key to the cipher. It is a standard method
for protecting highly confidential information. However, as heavily encrypted
messages can slow network performance unless managed effectively, its use is often
restricted to non-real-time messaging and data.

16
Monitoring for Administration and the Audit Trail: An increasingly important aspect
of today’s security solutions is the ability to monitor and administer the entire
network to keep it at optimum performance, identify weaknesses, maintain consistent
security policies, track a constant history of activity, and assure the complete safety of
information.

Secure Remote Access: on top of these security capabilities, contractors, engineers

and managers may remotely communicate via remote access virtual networks enabled
by the secure socket layer (SSL) based security protocols. Found in all standard web
browsers, SSL provides a more secure, efficient and effective way to access control
networks from an outside location or even outside the organization. This set of
protocols allows secure communications via the Internet for gathering sensor data,
sending instructions to field devices, performing remote maintenance and
administrative data transfer task.

Configuration Management: A final aspect of security is helping to assure high

network performance to avoid problems of availability, access and lack of service. A
good security solution provides support for configuration management and control, a
model that focuses on establishing and maintaining knowledge of the system and
network configuration, including security. Based on this approach, operations
personnel have the ability to manage security features and assurances through control
of changes made to hardware, software, firmware, testing and documentation
throughout the lifecycle of the systems. Worku, G. (2010)

2.5 Empirical literature

Some related studies are conducted by different researchers in different parts of the
world.
Mahsa and Ali (2018) studied reviewing the issues and challenges of electronic
banking regime in Iran. According to the authors the challenges that the electronic
banking system faced include financial regulative and legal issues, organizational
factors and process issues, infrastructure and system.
Bultum (2014), also quotes on the influences upsetting e-banking acceptance in
Ethiopia are perceived advantage and threat, legal and regulatory frameworks,
government support, IT infrastructure and technical and managerial skills of the bank.

17
The result obtained from the study states that lack of such authorized framework may
thus block the introduction of cost effective modern electronic payment instrument
such as ATMs, credit and debit cards, mobile/telephone/internet banking.
Gardachew (2010) conducted research on theopportunities and challenges of E-
banking in Ethiopia. The aim of his study was focused onanalyzing the status of
electronic banking in Ethiopia and investigates the main challenges andopportunities
of implementing E-banking system. The author conducted a survey on the existing
operating style of banks and identifies some challenges of using E-banking system,
such as, lack of suitable legal and regulatory frame works for E-commerce and E-
payments, political instability in neighboring countries, high rates of illiteracy and
absence of financial networks that links different banks.
Additionally, CBE(2013) pointed out that E-Banking is revolution by charging the
way CBE are spending what they earn by providing them with secure banking. It is
also profitable for the companies, known as microfinance institutions, which run the
banking systems. The most popular vehicle through which customers can utilize
banking services electronically is via mobile phone. The technology allows customers
to check and manage their accounts, pay utility and service bills and transfer money
between accounts either their own or someone else all on their phone. The value
proposition however, is a significant increase in the intangible item "customer
satisfaction". The increase translates into improved customer loyalty that in result in
higher customer retention and growing organization value.

18
 CHAPTER-THREE
RESEARCH METHODOLOGY
3.1Description of study area
Hossana is a town and separate woreda in southern Ethiopia , and the administrative
city of Hadiya zone located in southern nation and people's region, Hosanna has a
latitude and longitude of 7°33'N and 37°51'E with an elevation of 2177 meters above
sea level. Hossana is dusty, arid town at 7432 ft. above sea level .The town straddles
a paved road ,which runs between Addis Ababa, the capital of Ethiopia, and Arba-
Minch.

Fig. 1 Map of the Study Area Source:-Ethio-GIS and CSA

19
3.2 Research design
This research was able to describe the challenges of e-banking and descriptive
research design will be used in this study. Also, the researcher has used quantitative
and qualitative approach to manage the collected data.

This research design used as visual ads such as graphs and charts to aid the reader in
understanding the data distribution. Because the human mind cannot extract the full
import of a large mass of raw data, descriptive statistics are very important in
reducing the data to manageable form (Kothari 2004).

3.3 Research approach

As indicated in objective of the study, the very purpose of this research was to assess
the challenge of electronic banking in commercial bank of Ethiopia .Therefore; in this
study mixed approaches was used..

3.3.1 Target population

The target population of this research were e-banking employees and customer of
Commercial Bank of Ethiopia, Hossana branch.

3.3.2 Sampling technique and method

The study would be used both probability and nonprobability sampling techniques in
order to draw sample size from total population. As indicated in the population of the
study this research was only by taking e-banking users in to account. Therefore the
research assumed only that employee who gives electronic bank service at the bank.
As a result of this, the researcher contact only employer who are available at the time
of survey. So that the researcher uses censes sampling technique for the employees
because the employees are already known and they are few in number. On the other
hand among the different type of non-probability sampling technique, convenience
sampling technique is selected for this study. The reason for this is due to the
difficulty to get all the customers of the bank. So Due to time and cost constraints, the
researcher has take;n a sample from unknown numbers of customer’s researcher took
68 customers and censuses 50 employees of E baking in Hosanna branch.

3.3.3 Sample size determination

Since, the total population of the study is under 45 in number the student researcher
will use census method in order to take a sample size those are all employees in the

20
organization in which a total number of 45 employees as a sample size. And the total
population of commercial bank's customer is unknown so that the researcher will be
expected are respondent are not available once at the same time and place. Due to
time and cost constraints, the researcher has taken; a sample from unknown numbers
of customers researcher will take 68 customers and censuses 45 employees of E
baking in Hosanna branch. The researcher has used the following formula to
calculate sample size from the unknown populations customers of the organization
(Kothari, 2004) .

n= (Z2.P.Q)/E2

Using 90% confidence level, 10% or 0.9 margin of error (100%-90%)

Where, n= sample size 50% or 0.5 Sample proportion success

Z2=confidence level Q = 1-P, Q =1-0.5 =0.5

P= sample of proportion success Q+P=1, (0.5+0.5 =1)

Q= failure Where, E =0.1, Z =1.645, P =0.5, Q =0.5

E= Margin of error tolerated n= (Z2.P.Q)/E2 = (1.6452 X 0.5 X

0.5)/0.12= 0.67656025/0.01

n=68

Therefore; the researcher has taken 50 employees and 68 customers.

3.4 Source of data

Both primary and secondary data used in this research. According to Kothari (2004),
Primary data are fresh data that are gathered for the first time and thus happened to be
original in character Primary data of the study was information gathered from
employees of the bank. Questionnaire that have both open end and closed end
question would be prepared and delivered to employee in order to gather the primary
data.

The secondary data was collected from different sources such as, websites, journals,
periodicals released by the bank and articles national and international newspaper and
magazines.

21
3.5 Method of data collection
According to Kothari, for descriptive studies the researcher must employ structured
instruments to collect data from the respondents (Kothari 2004).Therefore
Questionnaire used to collect data from employee of the bank. The questionnaire
would have two parts. The first part includes information about demographic
characteristics of the respondents like age, sex, educational back ground and
experience. The second part includes questions directly relate with the objective of the
study. The questionnaire was containing both open ended and closed ended questions.

The qualitative approach was used to describe the raw data gathered from the
manager interview. And also, the researcher used the quantitative method of data
analyze by using graphs and percentages with numerical formats to analyze and
interpret the raw data.

3.6 Data analysis

The data gathered from the respondents were analyzed using descriptive statistics
such as frequency and percentage. Data processing like coding and recording was
done both manually and using computer. Averages, percentages, frequency and tables
used for the analysis of the collected data.

22
 CHAPTER FOUR

4. DATA ANALYISIS, FINDINGS, AND DISCUSSION

4.1. Introduction
As it is discussed in the methodology part of this study, data collected by using
questionnaire were analyzed in this chapter by using descriptive statistics. A total of
45 questionnaires were distributed to electronics banking employees of commercial
bank Ethiopia Hossana branch Out of the total 45 questionnaires, all questionnaires
were obtained (100 % response rate) and the analysis were, made based on this figure.
And 68 questionnaires were distributed to e-banking customer of commercial bank of
ethiopia Hossana branch out of the total 68 questionnaires, all questionnaires were
obtained (100%responsrate) and the analysis were made based on below figure.

4.2. Demographic information of the respondents

This descriptive analysis is used to look at the data collected and to describe that
information. It is used to describe the demographic factors for more clarification. It is
mainly important to make some general observations about the data gathered for
general or demographics questions. The demographics factors used in this research
are gender, age, educational level, and marital status of employees of the bank. For
the scale typed questionnaires for all variables frequency and percentage of
respondents was used.

The study participants on survey questionnaire have different personal information;

besides these differences they introduce different responses towards E-banking usage.
The following discussion shows these differences. The demographic profile of
respondents, participated in this study was shown in table 4.1 as follows.

Table 4.1 Respondents’ Demographic profile

Variable Classification of Respondent Percent

variables

Male 20 62.5%

Gender Female 12 37.5%

Total 32 100.0%

23
 18-30 22 68.75%

31-45 10 31.25%

Age 46-60 0 0

61 and above 0 0

Total 32 100.0%

Diploma 1 3.125

Degree 31 96.880%

Educational levels masters and above 0 0

Total 32 100.0%

Single 1 3.125%

Divorced 3 9.375%

Marital status
Married 17 53.125%

Total 32 100.0%

Source: own survey 2023

As it is shown on the above table 4.1, 20(62.5%) of the respondents of this study were
male and 12(37.5 %) of the respondents were female. From the above discussion, it
can be concluded that the highest percentage of participants in this study were males.

Regarding age of the respondents 22(68.75%) of the respondents were between the
ages of 18-30, 15(31.25%) were between 31-45, no respondents between 46-60, and
also here no the respondents are 61 and above

In the case of classification of respondents by age the highest percentage of

participants were in the age of 18-30.

Regarding the educational level of the study participants1(2.22%) of the respondents

have Diploma, 31(96.875 %) were Degree, and the rest no holds masters and above.

24
From the above discussion it can be concluded that the highest percentage of
respondents has Degree.

As far as marital status of the respondents is concerned, 17(53.125 %) of the

respondents were married, 12(37.5 %) were single and 3(9.375 %) of the respondents
were divorced. From this discussion the highest percentages of the participants are
married people.

4.3. Results and Discussions of Electronic Banking

Although there are many associated benefits with the adoption of E-banking, there are
many reasons which hinder implementation of the system. In case of Ethiopian
banking industries, many private banks still using old banking system and don’t have
access to take advantage from electronic banking facilities. The following discussion
provides an insight about general overlook of e-banking and its challenge.

Table 4.2 service interruption.

NO Item Alternative Respondent Percent

1 Does the bank have all e- Yes 11 34.375%

banking manual procedures
No 21 65.625%
in place for when there is an
interruption in service of e Total 32 100%
banking (internet banking)
for the customer?

Source: own survey 2023

Table 4.2 shows whether the bank have procedures in the time where there is
interruption in service of e-banking for the customers. It depicts that 16(34.375%) of
the respondents reveals that there is a procedures to overcome internet banking
service interruption while the rest 21(65.625 %) of the respondents said there is no
adequate procedures in place for when there is an interruption in service of e-banking
(internet banking) for the customer. Hence, it can be concluded that most of the
employees included in this survey didn’t observe mechanism while there is service
interruption in e-banking.

25
Table 4.3 what are the different electronic channels through which the bank is
delivering the service to its customers? You can choose more than once.

Variable Tick here ( X )

Internet banking 11

ATM 22

Tele banking 0

Mobile or SMS banking 21

Source: own survey 2023

The above table 4.3 reveals different electronic channels through which the bank is
delivering the service to its customers. As indicated in the table from the total
respondents of included in this survey 13 respondents of use internet banking
services, 22 respondents use ATM, 8 respondents of use Tele banking, and 15
respondents of use mobile or SMS banking.

Table 4.4 what options are available to the customer once they have accessed e-
banking?

S. No. Variable Numbers of respondent

1 Fund transfer 20
2 New account set-up 5
3 Insurance premium payment 3
4 Credit application 5
5 Balance inquiry 20
6 Bill presentment and payment 6
7 Cash withdrawal 18
8 Purchase of goods and services 9
9 Utility payment 5
Source: own survey 2023

The above table 4.4 depicts for what purpose employees use the service of e- banking.
As shown in the table from the total respondents included in the study 20 of the
respondents uses for fund transfer purpose, 5 of the respondents uses for new account

26
set-up, 3 respondents uses for insurance premium payment, 5 respondents credit
application. On the other hand, 20 of the respondents uses for balance inquiry, 6 of the
respondents uses for bill presentment and payment, 18 of the respondents uses for
cash withdrawal, 9 of the respondents uses for purchase of goods and services and
finally 5 of the respondents uses for utility payment.

Table 4.5 adoption of e-banking

NO Item Alternative Respondent percent

1 Do you think that the bank Yes 18 56.25%

is sufficiently adopted the
No 14 43.75%
e-banking system?
Total 32 100%

Source: own survey 2023

As far as the above table 4.5 the adoption of the system is concerned, majority
18(56.75%) of the respondents included in this survey believes that the bank didn’t
adopt the system sufficiently, while the rest 14(43.75 %) of the respondents believes
the bank adopted the system sufficiently. From the above discussion most employees
included in this survey believes that the bank didn’t adopted the system sufficiently.

Following this question employees who say" yes" for the above question were asked
to rate their degree of conformity to the following challenges with respect to the
adoption of e banking in the bank.

Table 4.6 Challenges of E-banking discussion

No Item Alternative Respondent percentage

1 High installation cost S. disagree 5 15.625%
Disagree
Neutral 7 21.875%
Agree 2 6.25%
S. Agree 12 37.5%
Total 6 18.75%
32 100.0%

27
2 Lack of demand from the S. disagree
customer’s side Disagree 4 12.5%
Neutral 7 21.875%
Agree 0 0%
S. Agree 11 34.375%
Total 10 31.25%
32 100.0%
3 Chances of risk in relation to e- S. disagree 0 -
banks Disagree
Neutral 16 50%
Agree 2 6.25%
S. Agree 10 31.75%
Total 2 6.25%
32 100.0%
4 Lack of educated and efficient S. disagree 3 9.375%
staff in e-banking context Disagree
Neutral 9 28.125%
Agree 6 18.75%
S. Agree 10 31.75%
Total 4 12.5%
32 100.0%
5 Lack of suitable legal and S. disagree 4 12.5%
regulatory framework Disagree
Neutral 12 37.5%
Agree 8 25%
S. Agree 6 18.75%
Total 2 6.25%
32 100.0%
6 Non-readiness of banks to adopt S. disagree 4 12.5%
the system Disagree
Neutral 12 37.5%
Agree 9 28.125%
S. Agree 7 21.875%

28
 Total 0
32
7 Lack of government support in S. disagree 2 6.75%
introducing e-banking system Disagree
Neutral 12 37.5%
Agree 10 31.75%
S. Agree 5 15.625%
Total 3 9.375
32 100%
8 Absence of financial networks S. disagree 4 12.5%
Disagree
Neutral 10 31.75%
Agree 2 6.25%
S. Agree 9 28.125%
Total 8 25%
32 100%
9 Poorly developed S. disagree 0
telecommunication infrastructure Disagree
Neutral 4 12.5%
Agree 7 21.875%
S. Agree 12 37.5%
Total 9 28.125%
32 100%
10 Low level of initiation on the S. disagree 0 -
side of the shareholders to adopt Disagree
the system Neutral 13 40.625%
Agree 12 37.5%
S. Agree 7 21.875%
Total 0
32 100%
11 Lack of coordination and S. disagree 5 15.625%
cooperation with the other banks Disagree
in e-banking context Neutral 10 31.25%

29
 Agree 7 21.875%
S. Agree 6 18.75%
Total 4 12.5%
32 100%
Source: own survey 2023

The above table 4.6 item 1 shows employees degree of agreement to different
challenges they may encounter while they deal with e-banking in commercial bank of
Ethiopia Hossana branch. Regarding installation costs of the system, 9 (20 %) of
respondents strongly agreed that there were very high installations costs, 9 (20%) of
respondents were agree, 9(20 %) 6 respondents were nuetral, 13 (28.88%) of
respondents were disagree and 5 (11.12 %) of respondents were strongly disagree that
there are high installation cost. Hence, most respondent included in this research were
disagree about the issues under investigation.

The above table 4.6 item 2 shows concerning demand from the customers’ side,
7(15.56 %) of the respondents disagreed them there is Lack of demand from the
customers’ side, 8 (17.77%) of the respondents agree, 4 (8.89%) respondents strongly
disagree, 16(35.55%) of the respondents’ strongly agree and 10(22.23%) in
different/nuetral with the issue. From the above discussion it can be concluded that
most respondents included in this study s.agree believes that there is lack of demand
from the customers’ side.

The above table 4.6 item 3 With respect to chances of risk from the banks side, 5
(11.12 %) of the respondents strongly agree believe that there is chances of risk from
the banks side, 16 (35.56 %) of the respondents agreed, 8(17.77 %) of the respondents
are neutral, 16 (35.56%) of the respondents are disagreed and the rest no the
respondents strongly disagreed that there is chances of risk from the banks side. This
indicates that most respondents included in this research believe that there is a chance
of risk from the banks side.

The above table 4.6 item 4 shows As far as lack of educated and efficient staff in e-
banking context is concerned, 8 (17.77 %) of the respondents were strongly agreed
that there is lack of educated and efficient staff in e-banking context, while 12(26.66
%) of respondents were agree, 6 (13.34 %) of the respondents were
indifferent/nuetral, 16 (35.56 %) of respondents were disagree, and the rest 3 (6.67 %)

30
of the respondents were strongly disagree that there is lack of educated and efficient
staff in e-banking context. So, it can be observed that most respondents included in
this study disagree that there is lack of educated and efficient staff in e-banking
context.

The above table 4.6 item 5 Regarding lack of suitable legal and regulatory framework,
4 (8.88 %) of the respondents were strongly disagreed that there is lack of suitable
legal and regulatory framework, 14 (31.11 %) of the respondents were agree, 11
(24.45 %) of the respondents prefer to be indifferent/neutral, 16 (35.56 %) of the
respondents were disagree and the rest of the no respondents strongly agree that there
is Lack of suitable legal and regulatory framework. From the above discussion, it can
be concluded that most respondents comprised in this survey disagreed that there is
lack of suitable legal and regulatory framework.

The above table 4.6 item 6 shows the other issue that the respondents asked to rate
their levels of agreement with respect to readiness of banks to adopt the system. The
above table reveals that 18(40 %) of the respondents were disagreed that there is no
readiness to adopt the system from the banks side, 17 (37.77 %) of the respondents
were agree and 6(13.34 %) of the respondents were indifferent/nuetral. On the other
hand, 4 (8.89 %) of the respondents were strongly disagree and no the respondents
strongly agree with respect to Non-readiness of banks to adopt the system. Thus, most
participants encompassed in this survey disagreed with non-readiness of the bank to
adopt e banking.

The above table 4.6 item 7 Concerning Lack of government initiation or lack of
government prioritization, 1 (2.23 %) of the respondents were strongly agreed that
there is lack of government initiation or lack of government prioritization, 4 (8.89 %)
of the respondents were agreed and 12 (26.67 %) of the respondents were nuetral/
indifferent. On the other hand, 26(57.77 %) of the respondents were disagree that
there is no lack of government initiation or lack of government prioritization. From
the above presentation of finding it can be determined that most participants included
in the research believe that there is lack of government initiation or lack of
government prioritization regarding the system.

The above table 4.6 item 8 shows As far as Absence of financial networks that links
different banks is concerned, 10(22.22 %) of the respondents were strongly agree that

31
there is absence of financial networks that links different banks, 12(26.67 %)of the
respondents were agree and 7 (15.55%) of the respondents were nuetral/indifferent
about the issue. On contrary, 12 (26.67 %) of the respondents were disagree and
4(8.89 %) of the respondents were strongly disagreed with respect to the absence of
financial networks that links different banks. Therefore, it can be concluded that most
participants encompassed by the study believe that there is absence of financial
networks that links different banks.

The above table 4.6 item 9 Concerning low level of internet penetration and poorly
developed telecommunication infrastructure, 17 (37.77 %) of the respondents were
strongly agree, 12(26.67%) of the respondents were agree that there is low level of
internet penetration and poorly developed telecommunication infrastructure, while 12
(26.67 %) of the respondents were nuetral/indifferent,4 (8.89 %) of the respondents
were disagree and no the respondents strongly disagreed with respect to the issue.
From the above presentation, it can be determined that most respondents participates
in this survey strongly ageed believe that there is low level of internet penetration and
poorly developed telecommunication infrastructure.

The above table 4.6 item 10 Regarding low level of initiation on the side of the
shareholders to adopt the system, 16(35.56%) of the respondents were agreed, 16
(35.56 %) of the respondents were natural and 13(28.88 %) of the respondents were
disagree with respect to low level of initiation on the side of the shareholders to adopt
the system. On the other hand, no the respondents strongly agreed and the no the
respondents are strongly disagreed with low level of initiation on the side of the
shareholders to adopt the system. From this discussion it can be concluded that most
respondent participated in this research strongly agree believes that there is low level
of initiation on the side of the shareholders to adopt the system.

The above table in 4.6 item 11 the participants of the research asked to rate their
agreement with respect to whether there is lack of coordination and cooperation with
the other banks in e-banking context. From the above table it can be observed that
13(28.88%) 0f the respondents were disagree that ther is lack is of coordination and
coopration with the other banks in e-banking contexst,8(17.77 %) of the respondents
were strongly agreed that there is lack of coordination and cooperation with the other
banks in e-banking context, 9 (20 %) of the respondents were agreed, and 10 (22.23

32
%) of the respondents were nuetral/indifferent. On the other hand, only 5 (11.12 %) of
the respondents were strongly disagreed and said there is no lack of coordination and
cooperation with the other banks in e-banking context. Therefore, it can be concluded
that most respondents participates in this survey disagree highest believes that there
is lack of coordination and cooperation with the other banks in e-banking context.

Table 4.7 risks involved in adopting/ using electronic channels

NO Item Alternative Respondent Percent

1 Are there any risks involved Yes 27 60%

because of adopting /using
electronic channels
for No 18 40%
banking services to the
customer? Total 45 100%

Source: own survey 2023

The above table 4.7 shows customers response to risks involved in using or adopting
e-banking services. As indicated, majority 27(60 %) of the respondents agreed that
there are risks in adopting /using electronic channels of e- banking services, while the
rest 18 (40 %) disagreed that there is no risks in using electronic banking. From the
above finding it can be concluded that most respondent participates in this survey
believes that there are risks in adopting /using electronic banking channels.

Table 4.8 Types of risks

N Item Alternative Respondent percent

O
1 Types of risks Transaction or operation risk 24 53.33%

33
 Security risk 9 20%

Compliance or legal risk 0 0

Reputation risk 12 26.66%

Total 45 100%

Source: own survey 2023

In table 4.8 shows types of risks that employee normally faces when they adopt/ use e
banking from the bank. It portrays that 20 % (from 10 respondents who said there is a
risks of using/ adopting) of the respondents said that transaction or operation risk
associated with adoption, 53.33% of the respondents said there is security risks and 10
% of the respondents said there is reputation or legal risk with respects to using/
adopting e-banking in the bank.

Table 4.9E-banking performance evaluation

No Item Alternative Respondent percentage

Your e-banking Disagree 4 8.89%

system enables to
1
attract new Neutral 18 40%
customers? Agree 23 51.11%
Total 45 100%
Disagree 4 8.89%
Your e-banking
2 system builds your Neutral 19 42.23
banks image? Agree 22 48.88%
Total 45 100%

Your e-banking Disagree 11 24.45%

systems enable your
3
bank to retain the Neutral 16 35.55%
existing customers? Agree 18 40%
Total 45 100%
Your e-banking Disagree 4 8.88%
system enable your
4
bank to enhance its
Neutral 18 40%
have finicial return?
Agree 23 51.12%

34
 Total 45 100%

As reflected in the above table 4.9 item 1, shows 4(8.88%) of the respondents
disagree that the performance of e-banking system enable to attract new customer, 23
(51.11%) of respondents agree, and 18(40%) of respondent were neutral whether e-
banking system enables to attract new customers or not. so we can conclude that most
of the respondent are confident that their e-banking system can attract new customers.

The above table 4.9 item 2 shows that weather your company’s e-banking system
helps to build your banks image. 4 (8.88%) of the respondents of the company
employees disagreed that their e-banking system can build their banks image,
22(48.88%) of respondents were agree that e-banking system can build banks image,
19 (42.23%) of respondents were neutral that e-banking have any impact on building
companies image.

In the above table 4.9 item 3 Concerning to weather your banks e-banking system
enables to retain the existing customers company, 18 (40%) of the respondents were
agree, 16 (35.55%) of the respondents were nuetral that the system can enable their
company to retain their existing customer. 11(24.45%) of the respondents were
disagree that the e- banking system can’t enable their company to retain the existing
customers, so in general from the respondents point of view the company must work
on its e-banking service because it’s have an impact in retaining the existing
customers.

As mentioned in the above table 3.9 the last item 4, showsm 23 (51.12%) of the
respondents were agree, 18 (40%) of the respondents were nuetral that the e-banking
system can enable the company to enhance its financial return. And 4(8,88%) of the
respondents were neutral that e-banking does not enables the company to enhance its
financial return, so the bank must work on its e-banking system to enhance the
financial return.

Part 2: This section described the data which is gathered from customers

First demographic characteristic of the respondents, this section is described about

demographic character such us sex, age, education and marital status.

35
Table 4.10: characteristic of respondent

NO Item No of respondents Percent %

1 Sex

Male 43 63.24%

Female 25 36.76%

Total 68 100%

2 Age

17-30 29 42.64%

31-45 33 48.52%

46-60 6 8.82%

Above 61 0 -

Total 68 100%

3 Education

Below grade 12 6 8.82%

Diploma 18 26.47%

1ST degree 38 55.88%

Above 1st degree 6 8.82%

Total 68 100%

4 Marital status

Married 20 29.42%

Unmarried/single 40 58.82%

36
 Divorced/ Windowed 8 11.76%

68 100%

source:own source 2023

Sex distribution is one of the demographic factor as shown below in the table 43
(63.24%) are males where as 25 (36.76%) of respondent are female. this result shows
that the majority of respondents are male.

Age also other demographic variables that indicate the proportion of the people by
dividing in to different section as youth, adult and old. As it indicate below table out
of total respondent 29(42.64%) of respondents lies between the age of 17-30,
33(48.52%) of the respondents lies between 31-45, 6(8.82%) of the respondent were
between 45-60, where as the remaining no the respondents were above 60 years of
age. This indicates that the majority of respondent between 31-45 which are an adult
age.

Education is a variable that use to identify the respondents as below grade 12,
diploma, 1st degree and above 1st degree. As it shown from the above table 6(8.82%)
of the respondent were below grade 12, 18(26.47%) of the respondent holds diploma,
38(55.88%) of the respondent were 1st degree and the remaining 6(8.82%) of the
respondents were hold above 1st degree respectively .this result shown that the
majority of respondent was having 1st degree. Therefore the researcher concluded that
majority of respondent have higher education..

Marital status is also another demographic factor as indicated on the above table
20(29%) of the respondent were married, 40(58.82%) of the respondent were
unmarried and 87(11.76%) of them were windowed. This can understand that the
majority of the respondents were unmarried/single.

Table 4.11: accessebility of e-banking and customer willingness to use e-banking

system.

37
No items Alternative Number of percentage
respondent

1 Do you have to access e- Yes 40 58.82%

banking ?

No 28 41.18%

Total 68 100%

2. Do you have willingness to use Yes 50 73.56%

e-banking?

No 18 26.44%

Total 68 100%

3. Do you know how to use e- Yes 49 72.06%

banking?

No 19 27.94%

Total 68 100%

Source:own source 2023

In the above table 4.2 item 1 Regarding to the accessibility on the side of the e-
banking to the customers, 40(58.82%) of the respondents were yes you have to access
e-banking, 28 (41.18 %) of the respondents were no you have to access e-banking.

The above table 4.2item 2 shows concerning to the Lack of customer willingness to
use the e-banking is, 50 (73.56%) of the respondents were yes that there is lack of
customer willingness to use, 18(26.44 %) of the respondents no that there is lack of
custumer willingness to use From the above presentation of finding, it can be
determined that most participants included in the research highest of yes believe that
there is lack of customer willingness.

The above table 4.3 in item 3 In relation to customers know how to use e-banking ,
49(72.06 %) of the respondents were yes that there is lack the know how about the
use of e-banking , 19(27.94%) of the respondents were no that there is lack of know

38
how to use the e- banking, From the above discussion it can be concluded that most
respondents encompassed in this survey yes that there is lack of know how to use e-
banking.

Table 4.12: Question related to e-banking security facality accessibility and

customer awarness about e-banking and their analysis.

N Items Alternative Numbers of Percentege

0 respondant

1. Full aware and enough S.disagee 6 8.82%

information about e-banking
disAgree 10 14.72%
service
Nutral 18 26.47%

Agree 20 29.41%

S.agree 12 17.65%

Total 68 100%

2, Are they concerned about their S.disagree 4 5.88%

private information and security
Disagree 9 13.23%
polcy
Nuetral 15 22.06%

Agree 26 38.23%

S.agree 14 20.59%

Total 68 100%

3. Aware of the usefull of e- S.disagree 0 -

banking service
Disagre 4 5.88%

Nuetral 17 25%

Agree 18 26.47%

S.agree 29 42.65%

39
 Total 68 100%

4 Think that using e-banking S.disagree 0 -

facility saves their times
Disagree 0 -
&money
Nuetral 19 27.95%

Agree 19 27.94%

S.agree 30 44.11%

Total 68 100%

5. E-banking service in more S.disagree 4 8.82%

accessible to user that visiting
Disagree 19 27.94%
bank branch
Nuetral 17 25%

Agree 28 41.17%

s.Agree 0 -

Total 68 100%

6. Learnig &using e-banking is S.disagree 5 7.35%

easy to use
Disagree 19 27.95%

Nuetral 18 26.48%

Agree 21 30.88%

S.agree 5 7.35%

Total 68 100%

7. the service are adapted to S.disagree 0 -

disable &elder peole who are
Disagree 0 -
lacking computer experience
Nuetral 26 38.23%

40
 Agree 24 35.29%

S.agree 18 26.48%

Total 68 100%

Source: own source 2023

The above table 3 item 1 shows employees degree of agreement to different

challenges they may encounter while they deal with e-banking in commercial bank of
Ethiopia Hossana branch. Regarding fully aware and enough information about e-
banking service, 10(14.72 %) of respondents were disagreed, 7(28%) of respondents
were agree, 18(26.47 %) of respondents were nuetral, 12 (17.65%) of respondents
were s.agree. 6 (8.82%) of respondents were strongly disagree that there . Hence,
most respondent included in this research were agree about the issues under
investigation.

The above table 3 item 2 shows concerned about the private information security
policy, 26(38.32%) of the respondents were agreed them there isconcerned about
private information security policy, 14(28.59%) of the respondents were s.agree,
4(5,88%) respondents were strongly disagree, 9(13.23%) of the respondents were
disagree and 15(22.06%) in different/nuetral with the issue. From the above
discussion it can be concluded that most respondents included in this study agree
believes that there isconcernde about private information security policy.

The above table 3 item 3 think that using e-banking facilty saves their time and
money, 30 (44.11%) of the respondents were strongly agree, 19(27.95 %) of the
respondents agreed, 19(27.94 %) of the respondents were neutral, no the respondents
are disagreed and the rest no the respondents strongly disagreed . This indicates that
most respondents included in this research believe that think that using e-banking
facilty save thier time and mony.

The above table 3 item 4 shows aware of the usefull of e-banking service,
29(42.62%) of the respondents were strongly agreed, 18(26.47%) of respondents were
agree, 17(25 %) of the respondents were indifferent/nuetral, 1(5.88 %) of respondents
were disagree, and no the respondents were strongly disagree So, it can be observed

41
that most respondents included in this study s.agree that there is aware the usefull of
e-banking service.

The above table 4.6 item 5 Regarding e-banking service in more accessible to use that
visiting bank branch , 18 (41.17%) of the respondents were agreed, 19(27.94 %) of
the respondents were disagree, 17(25%) of the respondents prefer to be
indifferent/neutral, 4 (8.82 %) of the respondents were s.disagree and the rest of the
no respondents strongly agree. From the above discussion, it can be concluded that
most respondents comprised in this survey agreed that their e-banking service in more
accessible to use that visiting bank branch.

The above table 3 item 6 shows Regarding learning and using e-banking is easy to
use, that 19(27.95%) of the respondents were disagreed, 21(30.88 %) of the
respondents were agree , 18(26.48%) of the respondents were indifferent/nuetral. On
the other hand, 5 (7.35 %) of the respondents were strongly disagree and 5(7.35%)
the respondents strongly agree. Thus, most participants encompassed in this survey
nuetral with learning and using e-banking is easy to use.

The above table 3 item 7,the service are adapted to disable and elder people who are
lacking computer experince, 18(26.48%) of the respondents were strongly agreed,
24(35.29%) of the respondents were agreed, 26 (38.23 %) of the respondents were
nuetral/ indifferent. On the other hand, no the respondents were disagree and no
respondent were disagree. From the above presentation of finding it can be
determined that most participants included in the research believe that there is the
service are disable and elder peoples who are lacking computer exeperince.

CHAPTER FIVE
5. SUMMARY, CONCLUSSION AND RECOMMENDATION
5.1. Summary of major findings
The outcome of this research with respect to background information of participants
revealed that majority (55.66 %) of participants of the study was male and majority
(44.44 %) of the respondents were between the age group of 18-to-31.

42
Regarding the educational level of the study participants, majority (97.78 %) of the
respondents are first degree holders and majority (55.56 %) of the respondents are
married.

Concerning procedures for service interruption of the bank, most (64.44 %) of the
employees included in this survey didn’t observe mechanism while there is service
interruption in e banking. And employees were asked to identify which electronic
channel they are using from the bank and 13 respondents uses internet banking, 45
respondents uses ATM, 8 of the respondents use Tele banking, 21 respondents uses
mobile or SMS banking.

As far as options that are available to the customer once they have accessed e-banking
is concerned, 20 respondents uses Fund transfer, 5 respondents uses New account set-
up, 3 respondents uses Insurance premium payment, 5Credit application, 20
respondents uses for Balance inquiry, 6 respondents uses e-banking for Bill
presentment and payment, 18 respondents uses for Cash withdrawal 9 respondents
uses for Purchase of goods and services and 5 respondents uses the system for the
purpose of Utility payment.

Concerning the adoption of the system, majority (54.54 %) of the respondent

participated in the survey believes that the bank didn’t adopt the system sufficiently.
Following these employees were asked to rate their agreement to factors (challenges)
that imped the proper adoption of E- banking and the summary of the result shows
that majority (28.88 %) disagreed that e-banking had high installation cost and
majority (22.23 %) disagree that there is lack of demand from customers side.
Furthermore, majority (35.56 %) of respondents were disagree and neutral that there
is chance of risks from bank side and again majority (35.56 %) of the respondents
were disagree that there is lack of efficient staff in e-banking context. The other
challenges were lack of suitable legal and regulatory frameworks, and by this majority
(35.56 %) of the respondent said that there is no lack of suitable legal and regulatory
frameworks and majority (35.56 %) of the respondents disagree non readiness of the
bank to adopt the system. Moreover, with respect to lack of government initiation or
lack of government prioritization majority (57.77 %) of respondents disagree said no
that there is government initiation and majority (57,77%) of the respondents agree
that there is absence of financial networks that links different banks. In addition to

43
this the finding of this research also revealed that, majority (26.67%) of the
respondents were disagree believes that there is low level of internet penetration and
poorly developed telecommunication infrastructure and majority (31.77 %) of the
respondents. agreed that there is low level of initiation on the side of the shareholders
to adopt the system. Also, the finding of the study reveals that majority (35.56%) of
the respondent agree that there is lack of coordination and cooperation with the other
banks in e-banking context and majority (28.88%) of the respondents disagree
majority (58.82%) 0f the respondent yes that there is accessibility to the customers.
and majority (73.58%) of the respondents said yes there is lack of customer
willingness to use and majority (72.06%) of the respondents yes that there is lack of
customer know how to use.

As far as risks involved in adopting/ using electronic channels is concerned, majority

(45.45 %) of the respondent believes that there are risks in adopting /using electronic
banking channels and 53.33% of the respondents believes there is transaction or
operation risk,20 % of the respondents believes there is security risk, 26.67% of the
respondents believe there is reputation risk.

Concerning to the e-banking performance evaluation majority (51.11%) of the

respondents were agree believe that there is e-banking system enable to attract new
customer. in addition to majority (48.88%) of the respondent agree that there is e-
banking system builds banks image. Again majority (40%) of the respondents are
agree in the in e-banking system enable your bank retain the existing customer. And
also majority (51.11%) of the respondents agree in the bank to enhance its have
finical return.

For the customer conclusion; The outcome of this research with respect to
background information of participants revealed that majority (63%) of participants of
the study was male and majority (37%) of the respondents were femal between the
age group of 18-to-31.

Regarding the educational level of the study participants, majority (56%) of the
respondents are first degree holders and majority (59 %) of the respondents were
single. Following these customers were asked to rate their agreement to factors
(challenges) that imped the proper adoption of E- banking and the summary of the
result shows that majority (29 %) agreed that full aware and eneogn information about

44
e-banking service, majority (38 %) agree that there is concerned about their private
information security policy. Furthermore, majority (43%) of respondents were s.agree
and that there is aware the usefull of e-banking , again majority (44 %) of the
respondents were s.agree that there is think that using e-banking facility save their
time and money. this majority (41%) of the respondent were agree and majority
(31%) of the respondents were nuetral learning and using e-banking is easy to use.
Moreover, majority (38%) of respondents were nuetral the service are adapted to
disable and elder peopel who are lacking computer experince.U

The objective of the study was to assess the Challenges Electronic banking in
commercial bank of Ethiopia, Hossana Branch.

The outcome of background information of the study revealed that most of

participants was male and were between the age group of 18-30. Regarding the
educational level of the study participants, most are degree holders and married.

Most of the employees included in this survey didn’t observe mechanism while there
is service interruption in e-banking. And 13 respondents’ uses internet banking, 22
respondents uses ATM, 8 of the respondents use Tele banking, 21 respondents uses
mobile or SMS banking.

The result also depicts that 20 respondents uses fund transfer, 5 respondents uses new
account set-up, 3 respondents uses insurance premium payment, 5 credit application,
20 respondents uses for balance inquiry, 6 respondents uses e-banking for bill
presentment and payment, 18 respondents uses for cash withdrawal, 9 respondents
uses for purchase of goods and services and only 5 respondents uses the system for
the purpose of utility payment.

Challenges of commercial bank

Most of the respondents believe that the bank didn’t adopt the system sufficiently.
Factor(challenges) that impede the proper adoption high installation in the of E-
banking as employees believed were lack of demand from customers’ side, chance of
risks from bank side, lack of efficient staff in e-banking context, absence of financial
networks that links different banks, low level of internet penetration and poorly
developed telecommunication infrastructure, low level of initiation on the side of the
shareholders to adopt the system, high costs of internet, lack of coordination and

45
cooperation with the other banks in e-banking context. And also attract new customer,
to the system, builds banks image the system bank to retain the existing customers
and enhance the system it have financial return.

Respondent also believes that there are risks in adopting /using electronic banking
channels and these risks would be transaction or operation risk, security risk and
reputation risk.

4.1. Work plan

A work plan is an outline of a set of goals and processes by which a team and/or
person can accomplish those goals, and offering the reader a better understanding of
cope of the project. Work plans, whether used in professional or academic life, help
you stay organized while working on projects

No. Activities Time of Place of Responsible Evaluation Remark

work work for task criteria's
1 Title submission Dec 14 Wachemo Mubarek
University Hairedin

46
2 Title selection Dec 25- Wachemo
29 university
3 Background of Jan 2-5 Hossana
study
4 Statement of Jan 15- Hossana
problem 30
5 Significance of Feb 1-15 Hossana
study
6 Objective of study Feb 15- Hossana
30
7 Literature review Mar 1- Ambicho
15
8 Data collection Mar 15- Commercial
30 bank of
Ethiopia
9 Data analysis April 1- CBE
10
10 Write up for first April Wachemo
draft 10-20 university
11 Write up for on April Wachemo
final draft 20-30 university
12 Research defense May 1- Wachemo
30 University

4.2. Budget schedule

Budgeting is the process of creating a plan to spend your money. This spending plan
is called a budget.

Creating this spending plan allows you to determine in advance whether you will have
enough money to do the things you need to do or would like to do. Budgeting is
simply balancing your expenses with your income.

No. Items Unit Quantity Price Total Source Remark

per price of
unit budget

1 Paper Package 150 2 300 Family Completed

2 pen Number 4 20 80 Family Completed

3 Pencil Number 3 10 30 Family Completed

47
4 Transportation Number 10 20 200 Family Completed
service

5 Printing page 62 3 186 Family Completed

6 Copy Page 100 2 200 Family Completed

Total 996

References
1.Abebe, Z. (2016). Opportunities and Challenges in the Adoption of E-Banking
Services: The Case of Dashen Bank S.C., EMBA thesis, Addis Ababa
University

2.Agarwal, P. & Josh C.K.(2016). E-banking Service Quality Parameters‟ Impact on

Customer Satisfaction, International Journal of Marketing and Financial
lManagement, 4(2), 01- 10.

3.Al-Smadi, M. (2012). Factors Affecting Adoption of Electronic banking: an

Analysis of the Perspectives of Banks' Customers, International Journal of
Business and Social Science, Saud Islamic University, Riyadh, Saudi Arabia
Vol. 3 No. 17

48
4.Anuwar (2015), Assessment of Factors Affecting Adoption of Agent Banking and
Electronic Banking in Ethiopian Banking Industry: A case of selected ten
banks, MSC THESIS,ST. Mary’s university, Addis Ababa, Ethiopia

5.Ayana Gemechu, (2012), Adoption of Electronic banking system in Ethiopian

Banking industry: Barriers and Drivers, MSC THESIS, Addis Ababa
University, Addis Ababa, Ethiopia

6.Bultum, A. G. (2014) „Factors Affecting Adoption of Electronic Banking System in

Ethiopian Banking Industry‟, 1(1), pp. 1–17.

7.Driga, I. & Isac, C. (2014) E-Banking Services Features, Challenges and Benefits,
Annals of the University of Petroşani, Economics, 14(1), 49-58

8.Endalkachew, A. (2013), assessing the impact of core banking and service quality
on customer satisfaction in commercial bank of Ethiopia: a case of Bishoftu
Branch, MBA Research, Hawassa University, Ethiopia.

9.Fenuga, O.J (2010). The effect of electronic payment on customer service delivery,
International journal of Economic development research and investment vol.1
no.1.

10.Fikerselassie, A. (2017). The Effect of E-Banking Service Quality on Customer

Satisfaction in The Banking Sector of Ethiopia (case study: Five Selected Grade Four
Branch Customers of CBE,), MBA Thesis, ST. Mary`s University.

11.Gardachew, W. (2010). Electronic-management of accounts in Ethiopia: Practices,

and challenges. Journal of Internet Banking and Commerce, 79, 223-255.

12.Gezahegn, B. (2015). Assessment of customer Satisfaction with ATM banking:

Empirical evidence from Selected Commercial Banks in Ethiopia, Addis
Ababa University

13.Jannatul, M.N. (2010). E-banking and customer satisfaction in Bangladesh: An

analysis international review of business research papers, vol.6 (4), pp.145-
156

14. Kassahun Girma. 2016 .Challenges and Opportunities of Electronic Banking in

Ethiopian Banking Industry. Addis Ababa, Ethiopia.

49
15.Michael M. (2016), Challenges and Opportunities of E-banking in Ethiopia: The
Case of Commercial Bank of Ethiopia, MBA thesis, ST. Mary’s university,
Addis Ababa,Ethiopia

16.Muteteri, A. (2015), Electronic Banking and Financial Performance of

Commercial Banks in Rwanda: a case study of bank of Kigali, a research project,
university of Jomo Kenyatta .

17.Okoye, Victor.( 2013) E–Banking in Nigerian Banking Industry: Challenges and

Prospects‖ International Journal for Management Science and Technology
(IJMST)

18..Prince, A. (2015). The effect of E-banking on customer service delivery, kumasi

metropolis, Kwamenkrumah, MBA thesis, University of science and
technology.

19.Worku, G. (2010) Electronic Banking in Ethiopia – Practices, Opportunities and

Challenges. Journal of Internet Banking & Commerce, Vol. 12 No.2, pp. 4-7

APENDIX
WACHEMO UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MARKETING MANAGEMENT

By: Mubarek Hairedin

ID: 1400758

Questionnaire to be filled by employees

Dear respondent the purpose of this questionnaire is to identify the Challenges of

Electronic Banking in commercial bank of Ethiopia Hossana Branch as part of my
resaerch I would like to gather some information from you which will help me in an
in depth study of the resaerch. I would be indebted if you co-operate with me in filling

50
the questionnaire since the questionnaire is being used for academic purpose; the
information gathered will be strictly confidential.

Thank you in advance for your cooperation!

General instruction.

It is not necessary to write name

If the question has an alternative answer put mark on the space provided
beside your answer.

Please put a tick mark in the appropriate box

Part 1: Demographical Information

1.Gender

A Male  B. Female

2.Age

18 to30  B. 31 – 45  c. 46 – 60  D. 61 and

above 

3.Educational level

A. Not educated  B. Primary to 10th complete 

C.Diploma  D.1st degree 

E.Masters and above

4. Marital status:

A.Single  B. Divorced/separated/widowed  C. Married

51
Part two: Electronic banking questions for employee
Does the bank have all e-banking manual procedures in place for when there is an
interruption in service of e- banking (internet banking) for the customer?

A. yes  B. No 

2.What are the different electronic channels through which the bank is delivering the
service to its customers? You can choose more than once.

Tick here(x)

Internet banking

ATM

Tele banking

Mobile or SMS banking

others

3.What e-banking service options are available once you have accessed? You can
choose more than one.

S .N Variable Tick
here(X)

1 Fund transfer

2 New account set-up

3 Insurance premium payment

52
4 Credit application

5 Balance inquiry

6 Bill presentment and payment

7 Cash withdrawal

8 Purchase ofgoods and services

9 Utility payment

10 Others

4.Do you think that the bank is sufficiently adopted the e-banking system?

A.Yes  B.No 

5. What are the Challenges of E-banking

A. Strongly Agree  B.Agree  C.Neutral  D.Disagree

E.Strongly disagree 

S .N Chatacteristics A B C D E

1 High installation cost

2 Lack of demand from customer's side

3 Chances of risk in relations to e-banking

4 Lack of educated and efficient staff in e- banking

53
 context

5 Lack of suitable legal and regulatory framework

6 Non-readiness to adopt the e- banking system

7 Lack of government support in introducing e-

banking system

8 Absence of financial network that links different

banks

9 Poorly developed telecommunication infrastructure

10 Low level intiation on the side of share holders to

adopt the system

11 High cost of internet

12 Lack of coordination with the other banks in e-

banking context

13 Do you have acess to e-banking?

14 Do you have willingness to use e-banking?

15 Do you know how to use e-banking?

6. Are there any risks involved because of adopting /using electronic channels for
delivering banking services to the customer?

A.yes  B.No 

A. Transaction or operation risk  B.Security risk 

C. Compliance or legal risk  D.Reputation risk 

54
Part three: e-banking performance questions
8. The e-banking performance in the bank side

Variable Agree Disagree

Does your e- banking system enable to attract new

customers

Does your e- banking system build your bank image

Your customers are satisfied by your e-banking service

Does your e- banking system have financial return

Part 4 Questionnaire to be filled by customers

1 strongly disagree 2. disagree 3. neutral 4. agree

5 Strongly disagree

No.

1 Have you fully aware and have enough information

about electronic banking service?

2 Are you concerned about their private information

and security policy?

3 Are you aware of the usefulness of electronic

banking service?

4 Do you think that using electronic banking facility

saves their times and money?

5 Do you think that E banking service is more

accessible to user than visiting bank branch?

6 Is using electronic banking easy to use?

7 The bank provides training to enhance awareness

55
 customer to use electronic banking?

8 The service are adapted to disable and elder people

who are lacking compute experience?

56