HAWASSAUNI

VERSI
TY

AWADABUSI
NESSANDECONOMI
CSCOLLEGE

ACCOUNTI
NGANDFI
NANCEDEPARTMENT

ASSESSMENTTHEEFFECTOFELECTRONI
CBANKI
NGONTHE
PROFI
TABI
LITYOFBANKS

(
Acasest
udyofcommer
cialbankofEt
hiopi
aYi
rgal
em br
anch)

ARESEARCHPAPERPRERAREDASAPARTI
ALFULFI
LLMENTOFTHEREQUI
RMENTS
OFOBTAI
NINGAB.
ADEGREEI
NACCOUNTI
NGANDFI
NANCE

Submi
tt
edby:EYOSI
YASGETACHEW
Submi
tt
edt
o:ASEGI
DG.(MBA)

May,
2018
Hawassa,
Ethi
opi
a
 Abst
ract

Thi
sresear
chpaperai
msatassessi
ngt
hei
mpactofe-
banki
ngont
hepr
ofi
tabi
l
ityof
Commer
cialbankofEt
hiopi
ainYi
rgal
em br
ancht
her
esear
cheruseddi
ff
erentdat
a
gat
her
ingmet
hodandr
esear
cht
echni
quef
ort
hepr
imar
ydat
a,Iusedi
nter
view and
quest
ionnai
reasdat
acol
l
ect
ion met
hod.Thest
udyi
sadopt
ed acensusordat
a
gat
her
edf
rom t
heent
ir
epopul
ati
on.

Commer
cialbanki
mpr
ovest
het
echnol
ogyi
nor
dert
opavet
hewayt
hati
twi
l
lgi
vean
i
mpr
essi
ont
othepeopl
esf
orbecomi
ngacust
omer
.Andt
hef
indi
ngi
ndi
cat
ese-
banki
nghasposi
ti
vei
mpactont
hepr
ofi
tabi
l
ityoft
hebank.

Fi
nal
l
ylogi
calconcl
usi
onar
erepor
teddr
ivi
ngi
nfer
encest
hati
ndi
cat
ether
eisashor
t
comi
ngt
ousee-
banki
ngsuchas,l
ackofcust
omer
’sawar
enesst
owar
dthet
echnol
ogy
andl
owl
evelofanaccessi
nthecount
ryevent
hough,
iti
ncr
easest
hepr
ofi
tabi
l
ityoft
he
bank.

i
i
 Acknowl
edgement

Fi
rstandf
oremostIwoul
dli
ket
opr
izet
heal
might
yGodf
orhi
sunspeakabl
egi
ftt
o
accompl
i
sht
hisst
udy
.NextIwoul
dli
ket
othankandexpr
esssi
ncer
egr
ati
tudet
omy
adv
isorASEGI
DG.underhi
ssuper
visi
onandunr
eser
vedcomment
sunt
ilt
hisst
udyhas
beencompl
eted.Fi
nal
l
yIwoul
dli
ket
othankmybel
ovedf
ami
l
ieswhosuppor
tedme
f
rom t
hebegi
nni
ngt
othi
sday
.

i
i
Tabl
econt
ent

Cont
ent page

Abst
ract
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-I
I

Acknowl
edgement
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II
I

Tabl
eofcont
ent
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-I
V

Li
stoft
abl
es-
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VII

Chapt
erone

i
i
I
ntr
oduct
ion-
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-1

1.
1Backgr
oundoft
hest
udy
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1

1.
2Backgr
oundoft
heor
gani
zat
ion-
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-2

1.
3St
atementoft
hepr
obl
em-
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1.
4Obj
ect
iveoft
hest
udy
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3

1.
5 Gener
alobj
ect
ive-
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1.
6Speci
fi
cobj
ect
ive-
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3

1.
7Si
gni
fi
cantoft
hest
udy
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3

1.
8Scopeandl
i
mit
ati
onoft
hest
udy
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-4

1.
8.1Scopeoft
hest
udy
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4

1.
8.2Li
mit
ati
onoft
hest
udy
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-4

Chapt
ert
wo

Rev
iewl
i
ter
atur
e--
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5

2.
1el
ect
roni
cbanki
ng-
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-5

2.
2el
ect
roni
cbanki
ngcl
assi
fi
cat
ion-
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-5

2.
2.1Tel
ephonebanki
ng-
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5

2.
2.2I
nter
netbanki
ng-
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-6

2.
2.3Mobi
l
ebanki
ng-
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-6

2.
3Adv
ant
ageofel
ect
roni
cbanki
ng-
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6

2.
3.1Nat
ional
poi
ntofv
iew-
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-6

2.
3.2Bankspoi
ntofv
iew-
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6

i
i
 2.
3.3Cust
omerpoi
ntofv
iew-
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-7

2.
4Adv
ant
ageanddi
sadv
ant
ageofi
nter
netbanki
ng-
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9

Chapt
ert
hree

Resear
chmet
hodol
ogy
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13

3.
1resear
chdesi
gn-
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-13

3.
2sour
ceofdat
aanddat
acol
l
ect
ionmet
hod-
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13

3.
3sampl
esi
zeandpopul
ati
on-
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-13

3.
4dat
apr
ocessandanal
ysi
s--
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13

Chapt
erf
our

dat
aanal
ysi
s,pr
esent
ati
onandi
nter
pret
ati
on-
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-14

4.
1int
roduct
ion-
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-14

4.
2anal
ysi
sofpr
imar
ydat
afr
om empl
oyee-
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-14

4.
3int
erv
iewanal
ysi
smanagement
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-20

Chapt
erf
ive

summar
y,concl
usi
onandr
ecommendat
ion-
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21

5.
1summar
yandconcl
usi
on-
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21

5.
2recommondat
ion-
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22

Ref
erence-
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-24

Appendi
x--
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-25

i
i
 Li
stoft
abl
es

Tabl
es……………………………………………….
.….
.…………………pages

Tabl
e4.
2.1banksempl
oyeepr
ofi
l
e………………….
.…………………….
14

Tabl
e4.
2.2i
mpr
ovementi
nusageofe-
banki
ng………….
…………….
.…15

Tabl
e4.
2.3costofe-
banki
ngt
echnol
ogy
……………….
…………….
……16

Tabl
e4.
2.4useofe-
banki
ngi
nal
lwor
ksar
ea…………….
……………….
16

Tabl
e4.
2.5e-
banki
ngf
aci
l
ity………………………………….
.….
.…….
.17

Tabl
e4.
2.6e-
banki
ngr
educet
hecostofbusi
nessoper
ati
on……….
.………17

Li
stoff
igur
e

Fi
gur
e4.
1per
cent
ageofwor
kdonet
hroughel
ect
roni
cchannel
……………….
18

Fi
gur
e4.
2per
cent
ageofempl
oyeesusecomput
eri
nthei
rwor
kar
ea………….
19

i
i
 CHAPTERONE
I
NTRODUCTI
ON

1.
1 Backgr
oundoft
hest
udy

Banksar
efocusi
ngont
hei
rel
ect
roni
cbanki
ngact
ivi
ti
esandar
egl
obal
l
yexpandi
ngE-
banki
ngact
ivi
ti
esexpl
ori
ngt
heuseofwi
rel
essnet
wor
ksandv
ent
uri
ngi
ntosomenew
ar
easofel
ect
roni
ccommer
ce.Banksof
fere-
banki
ngser
vicest
oexpandmar
ketshar
e
orasacostsav
ingst
rat
egyt
oreducepaperwor
kandper
sonnel
(Meson,
2002)
.

E-
banki
ngi
sdef
inedast
hepr
ovi
sionofr
etai
landsmal
lval
uebanki
ngpr
oduct
sand
ser
vicest
hroughel
ect
roni
cchannel
.Iti
mpl
i
esaser
vicet
hatal
l
owscust
omer
stouse
somef
orm ofcomput
ert
oaccessaccount
-banki
ngi
ncl
udesv
ari
esbanki
ngact
ivi
ti
es
conduct
edf
rom si
tesot
hert
hanaphy
sicalbankl
ocat
ion.Fori
nst
ance,al
lov
ert
he
wor
ldcust
omerr
elayonATMst
owi
thdr
awmoneyf
rom t
hei
rdemanddeposi
taccount
s
atanyhour (
Mescon,
2002)
.

E-
banki
ngst
art
edi
ntheear
ly1980bot
hinUSAandUK.I
treal
l
ytookof
fwi
tht
hear
ri
val
oft
heWor
ldWi
deWeb.Theev
olut
ionofe-
banki
ngst
art
edwi
tht
heuseonaut
omat
ic
t
ell
ermachi
nes(
ATMs)andhasonl
i
nebanki
ng.ATMsr
epr
esentasi
gni
fi
cantchangei
n
t
he banki
ng i
ndust
rybecause t
heyof
fera met
hod ofdel
i
ver
ing bankser
vicest
o
cust
omer
s wi
th out t
he need f
or cont
act bet
ween cust
omer
s and st
aff
.
(Hander
son.
1988)
.

El
ect
roni
cfund t
ransf
er (
EFT) i
s anot
her f
orm of el
ect
roni
c banki
ng .
These
comput
eri
zedsy
stem al
l
owsuser
stoconductf
inanci
alt
ransact
ionef
fi
cient
lyf
rom
r
emot
elocat
ion.(
hander
son,
1988)
.

I
naddi
ti
ont
oATM andEFT,
mostmaj
orbanksandmoneyt
hri
ft
sandcommuni
tybanks
nowof
feri
nter
netoronl
i
nebanki
ngt
oaccommodat
ethegr
owi
ngnumberofi
ndi
vi
dual
s
andbusi
nessest
hatwantt
otr
ansf
ermoneybet
weenaccount
s,checkaccountbal
ance,
paybi
l
ls,appl
yforl
oans,andhandl
eot
hert
ransact
ionsatanyhour
.Onl
i
nebanki
ngi
s
notonl
yfastandeasyf
orcust
omer
sbutal
soext
remel
ycostef
fi
cientf
orbanks.
(Mi
chaelH.
Mescon,2002)
.TheCommer
cialbankhaspr
ovi
dedt
hee-
banki
ngser
vices

1
 f
ormt
hei
ruser
s.Someoft
heel
ect
roni
ctechnol
ogi
est
hathaspr
ovi
dedbyt
hebankar
e
aut
omat
ed t
ell
ermachi
nest
echnol
ogy
,int
ernetbanki
ng,poi
ntofsal
e,and mobi
l
e
banki
ng.

1.
2 Backgr
oundoft
heor
gani
zat
ion

TheEt
hiopi
angov
ernment
alpol
i
cycer
tai
ntheadv
ant
ageoft
hef
reemar
keteconomy
.
Whi
chr
epl
acedt
hel
astor
derofsoci
aleconomi
csy
stem br
oughtaboutt
hedy
nami
sm
ofpr
ivat
esect
or,t
heaccel
erat
edgr
owt
handt
hedev
elopmentofEt
hiopi
ansr
equi
re
sy
stemat
icmobi
l
izat
ionanduseoff
inanci
alandmoni
tor
yresour
ces.I
tisnecessar
yto
l
ayt
hebasi
sforasoundbanki
ngsy
stem,whi
chwi
l
lfost
ert
hecont
inuedexpansi
onof
t
heeconomyofEt
hiopi
a.I
twaswi
tht
hisbackgr
ound t
hatagr
oup ofEt
hiopi
an
busi
ness men and pr
ofessi
onal
s mobi
l
ized essent
ial r
esour
ces r
ise t
o t
he
est
abl
i
shmentoft
hepr
ivat
elyownedcommer
cial
itsl
i
censeonSept
ember20,
1995wi
th
anaut
hor
izedandsubscr
ibecapi
talof50mi
l
li
on.Thebankst
art
edi
tsnor
malbusi
ness
act
ivi
ti
esont
hef
ir
stJanuar
y1996pr
esent
ly,i
tscapi
talandr
eser
vehasr
ecor
dedov
er
bi
rr1mi
l
li
on.

Asi
tisf
ir
sty
earofoper
ati
oncommer
cialbankhad13ar
easoft
hebanksspr
eadi
ng
ov
ermaj
ort
ownsi
nEt
hiopi
a.And5conv
eni
entsi
tesi
nAddi
sAbaba.Nowadayi
nor
der
t
oaddr
esst
hei
ncr
easi
ngneedofbanki
ngser
vicet
hebankhasexpendedi
tsbr
anches
t
o103ar
eas.Thebankhasmanagedt
osust
aini
tspr
ofi
tabi
l
itybypr
ofi
torbi
rr813
mi
l
li
onbef
orepr
ovi
si
onf
ort
ax.I
nthej
ustendedy
earl
oant
hebankhaspai
dtot
he
gov
ernmentof
ferbi
rr206mi
l
li
oni
nthef
orm ofpr
ofi
ttax.Thebankhasexpendedt
o
454number
sofcor
respondentbankswi
thwhom i
thasexchangedSWI
FTbi
l
ater
alkey
exchangear
rangement
s.Thepay
mentcar
dser
vicesaccept
ancenet
wor
khasexpandt
o
105aut
omat
ict
ell
ermachi
neand780poi
ntofsal
eter
minal
s.t
hebankst
ri
vest
onat
ure
i
tshumancapi
talt
hroughcont
inuoushumanr
esour
cedev
elopmentpr
ogr
am.byt
he
endofJune2013,t
hest
affst
rengt
hoft
hebank,i
ncl
udi
ngshor
tandl
ongt
erm cont
act
empl
oyees,
stoodat3,
690mi
l
li
on.

i
i
 1.
3St
atementoft
hepr
obl
em

Thei
nter
netanddi
ff
erentt
hingsi
tcandot
oupl
i
ftbusi
nesspr
ocedur
es,pr
oduct
sand
ser
vicesi
sacur
rentnecessi
tyf
orbusi
ness.Oneofi
nter
net
’spr
oduct
sisE-
banki
ng.I
tis
af
ast
erwayf
orcl
i
ent
stot
ransactwi
thoutt
hebanksper
sonnel
.E-
banki
ngser
vices
expandmar
ketshar
eoracostsav
ingst
rat
egyt
oreducepaperwor
kandper
sonnel
.
Et
hiopi
aisl
aggi
ngbehi
ndi
ntheadopt
ionofe-
commer
ce.Thei
nter
neti
nfr
ast
ruct
urei
s
onl
yini
tsmaj
orci
ti
es;duet
olackofi
nter
netf
aci
l
ity
.Lackofsuf
fi
cienti
nter
netf
aci
l
ity
andunsat
isf
act
oryl
evelofat
ti
tudeont
heuseofe-
banki
ngact
ivi
tymakesi
nsuf
fi
cient
(
Michael
H.Mescon,
2002)
.

Ev
eni
fani
nter
netf
aci
l
ityandl
owl
evelofat
ti
tudet
owar
dsont
heuseofe-
banki
ngi
s
i
nsuf
fi
cient
,Et
hiopi
anbanksi
ncl
udi
ngy
irgal
em br
anchcommer
cialbankst
art
edt
hee-
banki
ng ser
vice.so,t
hisr
esear
ch assessed i
ts ef
fecton t
he pr
ofi
tabi
l
ityoft
he
af
orement
ionedbr
anch.

Ther
esear
chwi
l
lanswert
hef
oll
owi
ngquest
ions.

 Howel
ect
roni
cbanki
ngsuppor
tst
heat
tai
nmentofbusi
nessgoal
incommer
cial
bank?

 Whatact
ivi
ti
esar
edonebyCommer
cial
bankt
ochangeat
ti
tudeoft
hecust
omer
?

1.
4Obj
ect
iveoft
hest
udy

1.
4.1Gener
alobj
ect
ive

TheGener
alobj
ect
iveoft
hest
udyi
sassessi
ngt
hei
mpactofe-
banki
ngt
echnol
ogyon
pr
ofi
tabi
l
ityofCommer
cial
bankofEt
hiopi
a,y
irgal
em br
anch.

1.
4.2Speci
fi
cobj
ect
ive

 Assesshowe-banki
ngsuppor
tst
heat
tai
nmentofbusi
nessgoal
inCommer
cial
bank.

 Toassesshowt
hebankbal
ancest
hecostspentf
orusi
nge-
banki
ngandi
tspr
ofi
tabi
l
ity
.

1.
5Si
gni
fi
canceoft
hest
udy

i
i
 Thest
udyhel
psCommer
cial
bankt
oexpl
orei
tsweaknessandst
rengt
h.

 Notonl
ythi
sbutt
hest
udy hel
ps t
hecompanyt
ofi
ndoutway
sjustt
oimpr
ovei
ts
weaknesssi
nce,t
hecompany
’sser
vicer
ender
ingsy
stem i
shi
ghl
yint
erl
i
nkedwi
the-
banki
ng.

 The st
udy pl
ays an i
mpor
tantr
olet
othe company
,tof
ind outt
he i
nfor
mat
ion
r
equi
rement
sfort
hev
ari
ousaspect
sofr
esour
cesal
l
ocat
ionandcont
rol
.

 Fi
nal
l
ythest
udyenabl
est
hecompanyt
ogetunder
standi
nghow t
heel
ect
roni
cfund
t
ransf
er(
EFT)pr
ovi
de compet
it
ive adv
ant
age and how t
he e-
banki
ng company
’s
ef
fect
ivenessorpr
ofi
tabi
l
ity

1.
6Scopeandl
imi
tat
ionoft
hest
udy
1.
6.1Scopeoft
hest
udy

Thest
udywasl
i
mit
edi
nCommer
cialbanky
irgal
em br
anchi
tdi
dn’
tincl
udeot
here-
banki
ngser
vicepr
ovi
derbanksi
nthecount
ryasawhol
eandy
irgal
em t
ownbanksi
n
par
ti
cul
ar.

Li
mit
ati
onoft
hest
udy

 Scar
cit
yofsour
cemat
eri
alorav
ail
abl
edat
a.

 Shor
tageoft
ime.

 Lackofexper
ienceonsuchst
udy
.

 Lackofmoney(
fi
nanci
alsponsor
)

i
i
 Ther
esear
cherwasf
acedt
hedi
ff
icul
tyt
ofi
ndr
eli
abl
edat
ainr
esear
chpr
ocess.

CHAPTERTWO

LI
TRATUREREVI
EW
2.
1El
ect
roni
cbanki
ng
El
ect
roni
cbanki
ngi
sthemoder
ntopi
cint
heer
aofsci
enceandt
echnol
ogy
.Though
el
ect
roni
cbanki
ngst
art
edi
n80’
sbutt
her
evol
uti
onhast
akenpl n20th cent
acei ury
.
Si
ncet
henel
ect
roni
cbanki
ngconcepti
sfl
our
ishedwi
thpopul
ousmodel
,theor
yand
pr
act
icalconcept
.So,
bef
oregoi
ngt
odi
scussanycor
econt
entofel
ect
roni
cbanki
ng,
it
i
sgoodt
omemor
izet
hef
undament
alconceptofel
ect
roni
cbanki
ngwhi
chhel
pst
o
r
eal
i
zebasi
cconcept
sofel
ect
roni
cbanki
ng.

El
ect
roni
cbanki
ngi
sumbr
ell
ater
mfort
hepr
ocessbywhi
chacust
omermayper
for
m
i
i
banki
ng t
ransact
ion el
ect
roni
cal
l
y wi
thout v
isi
ti
ng a br
ick-
and-
mor
tar i
nst
it
uti
on.
Ther
efor
etr
ansact
ionr
elat
edt
obankact
ivi
ti
esv
iaEl
ect
roni
cmeanandmedi
um i
s
cal
l
edel
ect
roni
cbanki
ng(
Hander
son,
1988)
.

2.
2El
ect
roni
cbanki
ngcl
assi
fi
cat
ion
I
nthev
iew poi
ntofuseandaccessmedi
a,El
ect
roni
cbanki
ngcanbecl
assi
fi
edi
nto
t
hreenar
rowsect
ion(
Mescon,
2003)
.

 Tel
ephonebanki
ng(
theol
destandpoor
estone)

 I
nter
netbanki
ng(
onl
i
nebanki
ng)

 Mobi
l
ebanki
ng

2.
2.1Tel
ephonebanki
ng

Tel
ephonebanki
ng i
saser
vicepr
ovi
ded byaf
inanci
ali
nst
it
uti
on,t
hatenabl
es
cust
omer
s oft
he f
inanci
ali
nst
it
uti
on t
o per
for
m f
inanci
alt
ransact
ion ov
ert
he
t
elephone,wi
thoutt
he needt
ovi
sitabankbr
anchoraut
omat
ed t
ell
ermachi
ne.
Tel
ephonebanki
ngt
imescanbel
ongert
hanbr
anchopeni
ngt
imes,andsomef
inanci
al
i
nst
it
uti
onsof
fert
heser
viceon a 24 hourbasi
s.Fr
om t
hebank’
spoi
ntofv
iew,
t
elephonebanki
ngr
educescostofhandl
i
ngt
ransact
ionsbyr
educi
ngt
heneedf
or
cust
omer
stov
isi
tabankbr
anchf
ornon-
cashwi
thdr
awal
anddeposi
ttr
ansact
ion.

2.
2.2I
nter
netbanki
ng
Onl
i
ne banki
ng al
l
ows cust
omer
s ofa f
inanci
ali
nst
it
uti
on t
o conductf
inanci
al
t
ransact
ionsonasecur
ewebsi
teoper
atedbyt
hei
nst
it
uti
on,whi
chcanbear
etai
lor
v
irt
ualbank,cr
edi
tuni
onorsoci
ety.
Itmayi
ncl
udeofanyt
ransact
ionsr
elat
edt
oonl
i
ne
usage.

2.
2.3Mobi
lebanki
ng

i
i
Mobi
l
ebanki
ngi
sat
erm usedf
orper
for
mingbal
ancechecks,accountt
ransact
ions,
pay
ment
s,cr
edi
tappl
i
cat
ionsandot
herbanki
ngt
ransact
ionst
hroughamobi
l
edev
ice
suchasamobi
l
ephoneorper
sonal
digi
tal
assi
stant(
Michael
H.mescon,
2002)
.

2.
3Adv
ant
agesofel
ect
roni
cbanki
ng
Af
terget
ti
ngt
henumberofser
vicespr
ovi
dedbyt
heEt
hiopi
anbankst
hroughel
ect
roni
c
banki
ngi
tiseasyt
owhatadv
ant
agesar
eget
ti
ngbyest
abl
i
shi
ngandusi
ngel
ect
roni
c
banki
ng.Theadv
ant
agecanbecl
assi
fi
edi
nthr
eecat
egor
y,t
hesear
e;Nat
ionalpoi
ntof
v
iew,
Banks’
poi
ntofv
iewandCust
omer
s’poi
ntofv
iew(
Rober
t,
2002)
.

2.
3.1Nat
ionalpoi
ntofv
iew

Thoughi
ntheseday
sbankst
ransact
ionandact
ivi
ti
eshasbr
oughtnegat
ivei
mpacton
t
heeconomyofourcount
ry,t
hei
nvest
menti
nel
ect
roni
cbanki
ngbybankscanmake
somel
ong-
ter
m benef
it
sforourcount
ry.Theadv
ant
agest
hatourcount
ryi
sget
ti
ng
f
rom el
ect
roni
cbanki
ngact
ionar
e;j
obcr
eat
ion,
cont
ri
but
iont
oGDP,
Economi
cbenef
it
s.

2.
3.2Banks‘
poi
ntofv
iew’

Fr
om t
hebanks’v
iewpoi
nt,banksar
eget
ti
ngsomespeci
fi
cadv
ant
agesaf
terst
art
ing
t
heel
ect
roni
cbanki
ngser
vices.Thesebenef
it
sar
e;

“
Prof
itmaxi
mizat
ion;t
hemai
ngoalofev
erycompanywast
omaxi
mizepr
ofi
tsf
ori
ts
owner
sandbankswer
enotanyexcept
ion.Banksar
eincr
easi
ngi
tspr
ofi
tbyr
educi
ng
t
hecostofpaper
,ti
me…et
c.Byusi
ngel
ect
roni
cbanki
ng.Thusaut
omat
edel
ect
roni
c
banki
ngser
vicesof
fer
edaper
fectoppor
tuni
tyf
ormaxi
mizi
ngpr
ofi
ts.

“
Incr
easeser
vicesqual
i
ty;f
eat
uresofel
ect
roni
cbanki
ngser
vicesi
ncl
udel
esst
ime,
compl
etet
ransact
ion,nohumanconf
li
ctandpr
esenceet
c.t
hust
hequal
i
tyofser
vices
ofbanki
sincr
easi
ngdaybyday
.

“
Incr
easedcust
omerr
ate;I
tist
hemostnot
iceabl
echangei
nbankaf
terst
art
inge-
banki
ngser
vices.Cust
omer
sar
eaccept
ingt
hismedi
um besi
deat
radi
ti
onalaccount
.
Ul
ti
mat
ely
,thepr
ofi
tofbanki
sincr
eased.

i
i
 2.
3.3Cust
omer
s’poi
ntofv
iew;

Themai
nbenef
itf
rom t
hebankcust
omer
s’poi
ntofv
iewwassi
gni
fi
cantsav
ingoft
ime
by t
he aut
omat
ion ofbanki
ng ser
vices pr
ocessi
ng and i
ntr
oduct
ion ofan easy
mai
ntenancet
ool
sformanagi
ngcust
omer
’smoney
.Themai
nbenef
it
sofe-
banki
ng
wer
easf
oll
ows;

 I
ncr
eased comf
ortand t
ime sav
ing-
tr
ansact
ions made 24 hra day
,qui
ck and
cont
inuousaccesst
oinf
ormat
ion.

 Cor
por
ati
onshadeasi
eraccesst
oinf
ormat
ionas,
theycheckedonmul
ti
pleaccount
sat
t
hecl
i
ckofabut
ton.

 Bet
tercash management
.E-
banki
ng f
aci
l
iti
esspeed up cash cy
cle and i
ncr
eases
ef
fi
ciencyofbusi
nesspr
ocessesasl
argev
ari
etyofcashmanagementi
nst
rument
sis
av
ail
abl
eoni
nter
netsi
tesofbanks.

 Pr
ivat
ecust
omer
slookedf
orsl
i
ght
lydi
ff
erentki
ndofbenef
it
sfr
om e-
banki
ng.

 Reducedcost
;thi
swasi
nter
msoft
hecostofav
ail
i
ngandusi
ngt
hev
ari
ousbanki
ng
pr
oduct
.

 Conv
eni
ence;al
lthebanki
ngt
ransact
ionper
for
medf
rom t
hecomf
ortoft
hehomeor
of
fi
ceorf
rom t
hepl
aceacust
omerwant
sto.

 Speed;The r
esponse oft
he medi
um was v
eryf
ast
;ther
efor
e cust
omer
s act
ual
l
y
wai
tedt
il
lthel
astmi
nut
ebef
oreconcl
udi
ngaf
undt
ransf
er.

 Fundsmanagement
;Cust
omer
sdownl
oadedt
hei
rhi
stor
yofdi
ff
erentaccount
sanddo
a what
-i
f anal
ysi
s on t
hei
r own pc bef
ore af
fect
ing any t
ransact
ion on t
he
web.
(Dudej
a,
2003)

E-
banki
ng,accor
dingt
o(Dudej
a,
2003)
,al
soknownasel
ect
roni
cfundt
ransf
er(
EFT)
,
usescomput
erandel
ect
roni
ctechnol
ogyasasubst
it
utef
orchecksandot
herpaper

i
i
 t
ransact
ions.El
ect
roni
cfundt
ransf
ersar
eini
ti
atedt
hroughdev
icesl
i
kecar
dsorcods
t
hatl
ety
ouort
hosey
ouaut
hor
izedaccessy
ouraccount
.Manyf
inanci
ali
nst
it
uti
ons
useATM ordebtcar
dsandper
sonneli
dent
if
icat
ionnumber(
PIN)t
othi
spur
posesome
useot
herf
ormsofdebtcar
ds,
suchast
hoset
hatr
equi
re,
att
hemost
,yoursi
gnat
ureof
scan.

ATM andEFTar
eel
ect
roni
cbanki
ngt
hosest
art
edont
heev
olut
ionofe-
banki
ng.ATM-
r
epr
esentasi
gni
fi
cantchangei
nthebanki
ngi
ndust
rybecauset
heyof
feramet
hodof
del
i
ver
ingbankser
vicest
ocust
omerwi
thoutt
heneedf
orcont
act
sbet
weencost
umer
and st
aff
.Thi
shasi
mpor
tanti
mpl
i
cat
ions,some ofwhi
ch ar
e consi
der
ed i
nthe
f
oll
owi
ngsummer
y.

ATMsadv
ant
agef
ort
hebanks
 Ther
eisasav
ingi
ncost
sbecausest
aff
sar
enotneededf
orr
out
inet
asks.

 Themachi
neshav
ecapaci
tyt
ocopewi
thv
eryhi
ghv
olumeofwor
ks.

 Outl
etsf
orbanki
ngser
vicescanbepr
ovi
dedi
nawi
dechoi
ceofl
ocat
ion,
notr
est
ri
cted
t
obr
anchsi
tes.

ATMsdi
sadv
ant
agef
ort
hebanks
 Ther
eisal
ossofper
sonalcont
actwi
thcust
omerwhi
chmaymakesel
l
ingot
her
ser
vicesmor
edi
ff
icul
t.

 Brandl
ocal
i
tyi
smor
edi
ff
icul
ttomai
ntai
nascust
omercanusemachi
nepr
ovi
dedby

compet
it
ors.

ATMsadv
ant
agef
orcust
omer
s
 Ser
vicei
sver
yqui
ck

 Machi
nesar
eav
ail
abl
einmanyl
ocat
ions,
par
ti
cul
arl
ywi
thnet
wor
k-shar
ingagr
eement
.

 Machi
nesar
einoper
ati
onwhenbr
anchesar
eshut
.Someoft
hem f
or24hour
saday
.

ATMsdi
sadv
ant
agef
orcust
omer
s
i
i
 Ser
vicesar
eimper
sonal
.

 Ther
ehav
ebeencl
aimsofaccount
sbei
ngdebi
tedwhennowmanyhav
ebeendr
owni
ng
out
.

 May be di
ff
icul
tto keep t
rack oft
ransact
ion because machi
nes don’
tal
way
s
web(
Hander
son,
1998)

2.
4Adv
ant
ageanddi
sadv
ant
ageofi
nter
netbanki
ng
Theadv
ant
agesofi
nter
netbanki
ngar
ehar
dtoov
erl
ook.Somepeopl
emayf
eart
he
changewhendebat
ingwhet
herornott
ogetst
art
edwi
thi
nter
netbanki
ng.Ot
her
smay
hav
esomeconcer
nsaboutdependi
ngont
hei
nter
netf
orf
inanci
alpur
pose.Many
peopl
e,howev
er,
hav
efoundoutj
usthowconv
eni
enti
nter
netbanki
ngi
s(Jams,
2003)
.

 Bi
l
lpay
;mosti
nter
netbankswi
l
lpr
ovi
debi
l
lpay
mentser
vicesf
reeofchar
get
otot
hose
whochooset
oenr
oll
.Theamountoft
hebi
l
lyoupayt
hroughonl
i
nebi
l
lpayi
sdeduct
ed
di
rect
lyf
rom y
ouraccountwi
tht
hebank,
andt
hebankwi
l
ltakecar
eofev
ery
thi
ngel
se.
Thi
ssav
est
heconsumerbot
hti
meandmoney
.Thedi
sadv
ant
aget
oonl
i
nebi
l
lpay
ment
i
sthatmostbanksdonoti
mmedi
atel
ypr
ovi
dey
ouwi
tht
hedat
ethef
undsar
esent
becauseofnet
wor
kpr
obl
em.

 Conv
eni
ence;Onl
i
nebanksandf
inanci
alser
vicesar
eopen24houraday
,ev
eryday
.As

i
i
 ani
nter
netbankusery
ouhav
eimmedi
ateaccesst
oyouraccountbal
ancesatal
lti
mes.
Thi
sisext
remel
yconv
eni
entf
ort
hosewhoar
eunabl
etomakei
ttoat
radi
ti
onalbank
dur
ingbusi
nesshour
sduet
othei
rwor
korschoolhour
s.Thedi
sadv
ant
agei
sthatt
he
sy
stemsdo go t
hroughupgr
adesand mai
ntenanceper
iodi
cal
l
y.Whi
l
ethi
susual
l
y
occur
s atodd hour
s,dependi
ng on y
ourschedul
es y
ou i
nfor
mat
ion coul
d be un
av
ail
abl
etoy
ouatt
hoset
imes.

 Ti
me management
;Int
ernetbanki
ng el
i
minat
es t
he t
hree-
houraccountbal
anci
ng
sessi
onatt
heendofev
erymont
hbecausey
ouar
enowabl
etot
rackal
lofy
ourbank
t
ransact
ionsonadai
l
ybasi
s.Manyi
nter
netbanki
ngcompani
esal
sopr
ovi
descanand
deposi
tser
vicesi
nwhi ous
chy cani
nthechecky
ouwi
sht
odeposi
tandmai
ltot
he
bank.Thi
ssav
esanenor
mousamountont
imei
nel
i
minat
ingt
hedr
ivet
othebank,
especi
all
yfort
hosewhodonothav
eanear
bybr
anch.

 St
atement
;Byut
il
izi
ngi
nter
netbanki
ngser
vicesy
ouar
ecut
ti
ngdownont
heamountof
papery
ouuse.Mosti
nter
nat
ebankswi
l
lal
l
ow y
out
orecei
veane-
stat
ementas
opposedt
oat
radi
ti
onalpaperst
atement
.Thosest
atement
sar
enor
mal
l
yav
ail
abl
e
onl
i
nef
orasl
ongasy
ouhav
eyouraccount
,andt
her
efor
eel
i
minat
etheneedt
ofi
l
e
t
hosest
atement
sawayeachmont
h.Thi
ssmal
lst
epi
nsmal
lst
epi
nint
ernetbanki
ng
cannotonl
ysav
eyout
ime,
butmoneyandst
oragespaceaswel
l
.

 Secur
it
yandPr
ivacy
;Onl
i
nebanksar
eregul
atedandt
her
efor
erequi
redt
opr
ovi
degood
secur
it
yandpr
otecty
ourpr
ivacy
.Thepr
obl
em i
sthathacker
sar
eal
way
str
yingt
ost
eal
per
sonal
inf
ormat
ion.Maki
ngsur
eyouhav
eagoodf
ir
ewal
landant
i-
vir
usi
sagoodway
t
osaf
eguar
dedy
ouri
nter
netbanki
ngt
ransact
ions.Nev
err
epl
ytoane-
mai
lfr
om y
our
bankt
hatr
equestper
sonali
nfor
mat
ionsuchasy
ouraccountnumberorpasswor
d.I
f
y
ouf
eelsomeonemaybet
ryi
ngt
o gai
naccesst
oyouraccount
,youshoul
dcal
l
cust
omerser
vicer
athert
hansendane-
mai
l
.

i
i
 Adv
ant
age

 Youcanmaket
ransf
ersandot
herchangeswhi
l
ethebanki
scl
osed.

 Youcandownl
oadaf
il
ethathol
dsy
ouraccounti
nfor
mat
ion

 Tor
econci
l
eyourst
atementwi
thy
ourf
inanci
almanagementsof
twar
e

 I
tiseasyt
ovi
ewr
ecentt
ransact
ionandmoni
tory
ouraccount

Di
sadv
ant
age

 I
fthebank’
sser
veri
sdown,
youcan’
tusei
t

 Onl
ysomepl
aceswi
l
lchar
gey
ouf
oronl
i
neaccess

 Youri
nter
netconnect
ionmustbewor
kingi
ndoorf
ory
out
ohav
eaccess

 Manybanksdon’
tshowy
ouhowt
ouseonl
i
nebaki
ngv
erywel
l,andt
hosear
eusual
l
y
t
heoneswi
tht
henon-
int
uit
ivei
nter
faceandcl
utt
ereddesi
gn,
whi
chmakesi
tpr
ett
yeasy
f
ory
out
oscr
ewupsomet
hing.

Wi
thev
ery
thi
ngr
elat
edt
ocommer
ceorf
inanceav
ail
abl
eonl
i
ne,i
nter
netbanki
ngcan
pr
ovi
de ease on busi
ness and sat
isf
act
ion f
ort
he t
echnol
ogi
cal
l
y awar
e,and a
headachef
ort
henewcomer
.Theuseofi
nter
netbanki
ngcanpr
ovi
deonewi
thahel
pful
r
esour
cef
orpay
ingbi
l
ls,maki
ngt
ransact
ionsandor
gani
zi
ngone’
sfi
nanci
erwi
thease
and r
api
dit
y,such i
tis desi
gned pur
pose;howev
er,i
tcan al
so be a f
rust
rat
ing
exper
iencef
ort
hoseuncer
tai
nofmoder
ntechnol
ogy
.Banki
ngcust
omer
sawi
deacr
oss
sect
ionoft
hepubl
i
c,const
it
uti
ngt
hemaj
ori
tyofwor
kingadul
ts;nat
ural
l
y,t
her
efor
e,
t
heyi
ncl
udet
hosewhoar
eint
ernetal
lfai
t,andal
sot
hosewhoar
ecomf
ort
abl
ewi
tht
he
ol
d-f
ashi
onedwor
ldonhi
ghst
reetbanki
ngt
ransact
ionsandhav
enopar
ti
cul
ardesi
ret
o
conductt
hei
rbanki
ngcust
omerov
ert
hei
nter
net
.

i
i
Howev
er,
ther
ear
eadv
ant
agest
ousi
ngi
nter
netbanki
ngt
oconsi
der
edf
oranyonewho
i
sacust
omerofabank;t
heoppor
tuni
tyt
ocheckst
atement
sonl
i
newi
thouthav
ingt
o
spendmoneyonov
erpr
icedt
elephonebanki
ngcal
l
s.Ther
eisal
sot
hef
actt
hatonecan
av
oidt
hef
rust
rat
ionsorwai
ti
ngi
nlongquestatt
hei
rlunchhour
,ort
hatofhav
ingt
ogo
i
ntoabankt
oar
rangeapay
mentt
ocr
edi
tororbusi
ness;pay
ment
scanbear
ranged
v
eryef
fi
cient
lyt
hought
hewor
ldonv
irt
ualbanki
ng,
atanyt
ime,
att
hecl
i
ckofamouse.
Maj
orconcer
nsamongstt
hosecust
omer
swhof
indt
hei
nter
netdi
ff
icul
ttousei
sthat
manybanksi
tesdon’
thav
eamor
euser
-f
ri
endl
yver
sionoft
hei
rnor
malwebsi
tet
ohel
p
t
hosewhoar
enotsocomf
ort
abl
eonl
i
ne;r
ather
,thet
ypi
calsi
test
hatr
espondent
s
banksaf
for
dmuchspacet
oadv
ert
iser
educedr
atesf
ormor
tgages,ort
otr
ytoat
tr
act
cust
om andot
herof
fer
sinat
tent
iongr
abbi
ngadv
ert
sont
hei
rhomepage.at
ypi
calhel
p
andsuppor
ticonoracont
actusl
i
nkar
etobef
oundi
nsmal
lpr
inti
nlessnot
iceabl
e
ar
easoft
hescr
een.Secur
it
y,ofcor
es,
i
sthepr
imar
yconcer
nfort
hosewhoar
ewor
ryof
t
aki
ngt
hei
rbanki
ngonl
i
ne;t
her
ehav
ebeencasesonsuccessf
ulbr
eachesofsome
bankwebsi
tes secur
it
y(al
though t
rul
yrar
e)t
hatshar
ethe pr
udentand t
he under
caut
iousal
i
ke.Thr
eat
ssuchast
hosemaybewor
thheedi
ng,whi
l
stunder
standi
ngt
hat
banksar
etr
ulyawar
eofsuchconcer
nsandusesophi
sti
cat
edcount
ermeasur
est
o
pr
oveandal
tsuchat
tack.mor
ecommonsecur
it
yri
sksgener
all
yst
em f
rom cust
omer
t
arget
edcampai
gnsbyt
hecy
bercr
imi
naldecei
tf
ule-
mai
l
scl
aimi
ngt
obef
rom y
our
bankaski
ngf
ory
out
osi
gni
ntoaf
alsewebsi
teorv
irusesandspy
war
ethatseekt
orai
d
y
ourcomput
ersi
nfor
mat
ion’
sin or
dert
oret
ri
evey
oursecur
it
ydet
ail
s.Thesear
e
av
oidabl
etr
icks(
mostmal
i
cious“
spam”e-
mai
l
sar
efi
l
ter
edbyanymoder
ne-
mai
lhost
s,
l
i
kehot
mai
l
),andi
dent
it
ythef
tisamat
tert
hatbanks(
andt
hepol
i
ce)
takeext
remel
y
ser
iousl
yandmost
lypr
ovi
deexcel
l
enthel
ptocombati
ncl
udi
ngsecur
it
yquest
ionsand
checkst
hatshoul
dil
l
umi
nat
eunwant
edaccessbyout
sider
s.Themostser
ioust
hreat
s
ofmal
war
e and ot
herv
iruses ar
e abl
eto combatby away on t
rust
ed secur
it
y
pr
ogr
ammer
sli
keMacAf
eeorNor
ton,andoneshoul
dnev
erbewi
thoutsuchsuppor
t.
Thebankt
hemsel
vesal
soof
ferhel
p,i
ncl
udi
ngt
ipsandadv
iceont
hei
rwebsi
teand
someev
enof
ferdownl
oadabl
esof
twar
eforf
reet
ofi
ghtsecur
it
ythr
eat
.Oneoft
he
mor
eemot
ional
l
yof
fput
ti
ngdownsi
det
oint
ernetbanki
ngf
ormanycust
omer
swho
mi
ghtwantt
oengagewi
tht
heser
vice,
ist
hati
fonei
sforexampl
eappl
yi
ngf
oral
oan,
it

i
i
i
snotpossi
blet
oexpl
aint
hesubt
lestofy
ourbusi
nessl
i
fet
oaf
orm,andf
ormost
,the
r
equi
redexer
ciseofpat
iencef
orf
eel
i
ngoutandsubmi
tt
ingl
engt
hypaperwor
kisf
ar
l
essf
lui
dinf
rontof ascr
eent
hani
tmaybei
nthecompanyofaper
sonwhocan
expl
aint
echni
calt
ermsanddi
scussy
ourneedi
ntel
l
igent
lyi
nawayt
hatf
acel
essweb
ser
vicecannot
.Oneoft
hemaj
oradv
ant
agesofgoi
ngonl
i
nei
sthatt
hev
erymedi
um of
t
hiski
ndofbanki
ngpr
ovi
dest
heuserwi
thuni
quebenef
it
s;t
hist
endt
ober
ather
t
echni
cal
,forexampl
edi
rect
lyi
mpor
ti
ngdat
a,f
rom somesi
test
hathav
ethi
scapabi
l
ity
,
i
ntoonesaccount
ingsof
twar
efur
ther
mor
e,f
ort
hosewi
thmor
ethanoneaccountor
ev
enbank i
nter
netbanki
ngal
soal
l
owsf
ort
hehi
ghl
yusef
ulofbei
ngabl
etov
iewand
compar
eal
lofone’
saccountandr
elat
edmat
eri
alonl
i
ne,wi
thouthav
ingt
orequest
i
nfor
mat
ionf
rom eachaccountorbanksepar
atel
yanef
for
tsav
ingbenef
itf
ort
hose
whol
i
vebusyandf
astmov
ingl
i
ves.Ther
eisal
sot
hemoder
nphenomenonofbankt
hat
onl
ypr
ovi
desser
viceonl
i
neent
ir
ely
.Onecanj
oint
hisbankwi
thoutev
erhav
ingt
oset
f
ooti
nabui
l
dingt
othecompany
.Thesecompani
esabi
debyt
hel
awf
ulr
ulesoft
radi
ng,
butar
emuchhar
dert
opur
suei
ftheydoy
ouwr
ong.Somesi
tesar
eindeedbogus,and
y
oushoul
dcheckt
hei
rcr
edent
ial
sbef
orej
oini
ng.Ther
ear
eincent
ivest
oswi
tchi
ng
onl
i
ne;t
hemostcasest
hesebankspassont
hesav
ingst
heymakei
nremov
ingl
abor
cost
sbyof
fer
inghi
gheri
nter
estr
atesonsav
ingsaccount
sandl
owerl
oanchangesand
banki
ngf
ees.Howev
er,
thequal
i
tyofser
vicei
sli
kel
ytobesi
gni
fi
cant
lyl
owert
hanr
ival
br
icksandmor
tarbankst
hatal
socompl
eteonl
i
ne.Onbal
ance,aswi
thanychoi
ce
r
egar
dingengagementwi
thser
vicespr
ovi
dedbyacompany
,thenat
ureofonceown
needsandwhatonei
scomf
ort
abl
ewi
thar
ethedeci
siv
efact
orsast
owhet
heronl
i
ne
banki
ngi
sfory
ou.Mi
l
li
onsuseonl
i
nebanki
ng,becausei
tsui
test
hei
rli
fest
yleand
wor
kingneeds,f
ewerhav
eswi
tchedonane-
bankwhi
l
stmanyr
emai
ncont
ainedt
odo
busi
nesst
henor
malwayt
hemaj
ordi
sadv
ant
ageofonl
i
nebanki
ngi
sthesecur
it
y
t
hreat
s;i
dent
if
ythef
tisbi
g(cr
imi
nal
)busi
ness,butasl
ongasy
out
akenoser
iousr
isk,
speci
all
ybyensur
ingt
haty
oual
way
suseasecur
eint
ernetconnect
ionandhav
ean
ant
ivi
rus pr
ogr
am ony
ourcomput
er,y
oushoul
dbesaf
e.Howev
er,i
sthebenef
it
s
of
fer
edbyonl
i
nebanki
ngsi
mpl
ydon’
tappealt
oyouorof
fernor
ealf
inanci
ali
ncent
ive;
i
tmay be bestj
ustt
o cont
inue wi
th whaty
ou ar
e comf
ort
abl
e wi
th,
(Tr
ied and
West
,2001)
.

i
i
 CHAPTERTHREE
METHODOLOGY
3.
1 Resear
chdesi
gn
Thest
udyusedadescr
ipt
ivest
udydesi
gnt
oanal
yzedat
acol
l
ect
edf
rom empl
oyees.
Ther
esear
chercol
l
ect
eddat
abyusi
ngquest
ionerandi
nter
view,t
hati
sther
elev
ant
dat
acol
l
ect
edatonepoi
nti
nti
me.

3.
2Resear
chAppr
oaches

Fort
hisst
udy
,ther
esear
cherusedbot
hqual
i
tat
iveandquant
it
ati
vedat
aty
pe.
Since
t
hisst
udyf
ocused ont
hepr
ofi
tabi
l
ityofe-
banki
ng,quant
it
ati
veappr
oach mai
nly
appl
i
ed.

3.
3 Ar
eaoft
hest
udy
Thest
udyconduct
edont
heassessmentofel
ect
roni
cbanki
ngont
hepr
ofi
tabi
l
ityof
commer
cialbankofEt
hiopi
a,Yi
rgal
em br
anch.

3.
4Sampl
ingSt
rat
egi
esThet
argetpopul
ati
onoft
hest
udywer
eempl
oyeesoft
he
bankwhoar
edi
rect
lyi
nvol
vedi
ntheact
ivi
tyoft
hebankwi
thaspeci
fi
cresponsi
bil
i
ties
i
nthef
oll
owi
ngdepar
tment
s;Management
,net
wor
kandsy
stem,account
ant
,cl
erkand
ot
herspeci
fi
c.

3.
5Dat
acol
lect
ionmet
hod

I
nthi
sst
udyt
hef
oll
owi
ngmet
hodshasbeenused:

Quest
ioner
:pr
epar
ed pr
eci
sel
yand di
str
ibut
etot
her
espondent
sto getadequat
e

i
i
answerf
ort
hedat
athatt
her
esear
cherneeded.

I
nter
view:conduct
edt
other
elat
edof
fi
cialandbanksmanager
.Asasuppl
ementt
othe
quest
ionnai
re,t
he r
esear
cherused unst
ruct
ured i
nter
view t
o decode some oft
he
i
nfor
mat
iont
hatcoul
dn’
tbeassessedusi
ngt
hequest
ionnai
re.

3.
6Met
hodsofDat
aAnal
ysi
s

Af
tert
her
elev
antdat
ahasbeencol
l
ect
ed,
processedandanal
yzedwi
tht
abl
e,
per
cent
agesandchar
ts.

CHAPTERFOUR
DATAANALYSES,
PRESENTATI
ONANDI
NTERPRETATI
ON
4.
1Int
roduct
ion
Thi
schapt
erdeal
swi
thdi
scussi
ons,pr
esent
ati
on,anal
ysesandi
nter
pret
ati
onofdat
a
gat
her
edf
rom pr
imar
ysour
cesbyusi
ngdi
ff
erentdat
acol
l
ect
ioni
nst
rument
.Thedat
a
wascol
l
ect
edbyusi
ngquest
ionnai
resandi
nter
viewsf
rom empl
oyeesofcommer
cial
bankofEt
hiopi
a.Asi
ndi
cat
ed i
nthemet
hodol
ogypar
toft
her
esear
ch t
het
otal
popul
ati
onswer
e42.Oft
het
otalpopul
ati
on85%oft
hequest
ionnai
resf
orempl
oyees
di
str
ibut
ewer
efi
l
ledandr
etur
nedt
other
esear
cher
.

4.
2Anal
ysesofpr
imar
ydat
afr
om empl
oyees
Tabl
e4.
2.1Banksempl
oyeepr
ofi
l
e

No Descr
ipt
ion Al
ter
nat
ives Fr
equency Per
cent
age

1 Howl
onghav
eyouwor
ked Bel
ow1y
ear -
i
n commer
cial bank of
1-
5year 28 70%
Et
hiopi
a
6-
10y
ear 7 17.
5%

Abov
e10y
ear 5 12.
5%

2 Educat
ional
qual
i
ficat
ion Cer
ti
fi
cat
e -

i
i
 Fi
rstdegr
ee 34 85%

Seconddegr
ee 3 7.
5%

Col
l
age 3 7.
5%
di
ploma

3 Whati
syourdepar
tment Net
wor
k 2 5%

andsy
stem

Account
ant 18 45%

Manager 1 2.
5%

Cl
erk 2 5%

Ot
herspeci
fy 17 42.
5%

Sour
ce:
Quest
ionnai
rei
nter
pret
ati
on:

Regar
dingy
ear
sofwor
kexper
ience,i
ncommer
cialbankofEt
hiopi
a70%,17.
5%,
and
12.
5%ar
ebet
ween1-
5year
s,bet
ween6-
10y
ear
sandabov
e10y
ear
srespect
ivel
y.Fr
om
t
her
espondent
swhowor
kincommer
cialbankofEt
hiopi
a85% hasf
ir
stdegr
eeand
7.
5%hav
egotcol
l
agedi
plomaand7.
5%hav
eseconddegr
eei
nthei
reducat
ional
lev
el.

Mor
eov
ert
her
espondent
swho ar
emanager
s2.
5%,account
ant45%,net
wor
kand
sy
stem 5%,
cler
k15%andr
emai
ning42.
5%ar
ecl
assi
fi
esasot
herspeci
fy.

I
mpr
ovementi
ntheusageofe-
banki
ngcompar
ingt
omanualsy
stem
Nowadayt
her
eisst
rongcompet
it
ioni
nbanki
ngi
ndust
ry.Themai
ncompet
it
iont
ooli
s
t
hroughi
ntr
oduci
nge-
banki
ngser
vicest
othecust
omer
s.Respondent
srespondf
ort
he
i
mpr
ovementi
nthe usage ofel
ect
roni
c banki
ng i
n commer
cialbank ofEt
hiopi
a
Yi
rgal
em br
anch,
tabul
atedasf
oll
ows;

Tabl
e4.
2.2I
mpr
ovementi
nusageofe-
banki
ng

Hav
eyou seen i
mpr
ovementi
nthe usage ofe- Respondent
s
i
i
banki
ngi
nbanki
ngcompar
ingt
omanual
syst
em? Number Per
cent
age

Yes 40 100%

No - -

Tot
al 40 100%

Sour
ce:
quest
ionnai
rei
nter
pret
ati
on:

Accor
ding t
othe abov
etabl
ethe r
esear
cher asked whet
hert
he empl
oyees see
i
mpr
ovementi
ntheusageofe-
banki
ngi
nbankscompar
ingt
omanualsy
stem ornot
.
f
ort
hisquest
ion100%t
her
espondent
srespondedt
hatt
her
eisani
mpr
ovementi
nthe
usageofe-
banki
ngi
ncommer
cial
bankofEt
hiopi
a.whent
heyr
espondedt
oopenended
quest
iont
heysai
d,commer
cialbankofEt
hiopi
abei
ngi
mpr
ovedi
ntheusageofe-
banki
ngsi
nce,i
tdecr
easesbur
eaucr
ati
cwor
ks,hel
ptomi
nimi
zel
oadofwor
k,si
mpl
i
fy
wor
kact
ivi
ty,i
tmi
nimi
zesr
isks,i
ncr
easer
eli
abi
l
ityandsaf
eguar
dfr
om t
hef
t,r
obber
y
andcheat
ing,
andi
tisspeedy
,accur
ateandqual
i
tyser
vicegi
vi
ngt
echnol
ogy
.Thoseal
l
ar
erai
sedasar
easonf
rom t
her
espondent
sfort
hei
mpr
ovement
.

Tabl
e4.
2.3Costofe-banki
ngt
echnol
ogy

I
sitcost
lyt
ousee-banki
ngt
echnol
ogy
? Respondent

Number Per
cent
age

Yes 11 27.
5%

No 29 72.
5%

Tot
al 40 100%

i
i
Sour
ce:
Quest
ionnai
rei
nter
pret
ati
on:

Ast
het
abl
eshows,t
heabov
efi
ve(
27.
5%)r
espondent
shav
eagr
eedt
hatusi
nge-
banki
ngt
echnol
ogyi
scost
lysi
ncei
tneedsski
l
ledmanpower
,hi
ghcostofi
nst
all
ati
on,
hi
ghcostofsy
stem t
echnol
ogy
,hi
ghcostofhar
dwar
eandsof
twar
e.butt
heyendup
t
hei
rrepl
ywi
thposi
ti
veout
look.I
tisbet
terusi
ngf
ort
hel
ongr
un,andi
tgener
atesand
f
aci
l
itat
est
hewor
kint
heor
gani
zat
ioni
nsi
mpl
eway
.Ther
emai
ning72.
5%r
espondent
s
sai
dthati
tisnotcost
lyt
ousee-
banki
ngt
echnol
ogycompar
ingi
tfr
om t
hemanual
sy
stem.Theyanswer
edt
heopenendedquest
ion;t
heyr
esponde-
banki
ngi
snotcost
ly
wheni
tcompar
ethecostt
hatspendsbymanualsy
stem l
i
kecost
sforst
ati
onar
y,f
or
sal
aryt
omor
emanpoweret
c.

Tabl
e4.
2.4useofe-
banki
ngi
nal
lwor
kar
ea

Doy
ouagr
eet
ousee-
banki
ngatal
lwor
kar
eaofbank? Respondent

Number Per
cent
age

Yes 40 100%

No - -

Tot
al 40 100%

Sour
ce:
Quest
ionnai
rei
nter
pret
ati
on:

Ast
abl
e3.
4showsf
ort
hequest
ion100%ofr
espondent
srespondt
hatast
heyagr
eet
o
usee-
banki
ngatal
lwor
kar
eaofbankbecausee-
banki
ngdecr
easesbur
eaucr
ati
cwor
ks
andi
tmakesi
mpl
eal
lwor
ks.

Tabl
e4.
2.5E-
banki
ngf
aci
li
ti
es

i
i
Cane-
banki
ngf
aci
l
iti
eswor
kbedonef
astandmi
nimum Respondent
er
rori
nyourbr
anch
Number Per
cent
age

Yes 40 100%

No - -

Tot
al 40 100%

Sour
ce:
Quest
ionnai
rei
nter
pret
ati
on

Asdepi
ctedi
ntheabov
etabl
e100% ofr
espondent
srespondedy
es:andt
heysai
de-
banki
ngwor
ksbymoder
nsof
twar
eandenabl
est
ocompl
etewor
kswi
thi
nami
nimum
t
imeandl
i
ttl
eer
ror
.Thi
sshowse-
banki
ngcanaccompl
i
shact
ivi
ti
est
hatar
ebei
ngi
n
t
hebankwi
tht
hef
astmi
nimum er
ror
s.

Tabl
e4.
2.6E-
banki
ngr
educet
hecostofbusi
nessoper
ati
on

Cane-
banki
ngr
educet
hecostonbusi
nessoper
ati
on? Respondent

Number Per
cent
age

Yes 40 100%

No - -

Tot
al 40 100%

Sour
ce:
Quest
ionnai
rei
nter
pret
ati
on

Theabov
etabl
e4.
2.6showsal
lrespondentagr
eet
hate-
banki
ngt
echnol
ogyr
educet
he
costofbusi
nessoper
ati
on,becauset
heybel
i
evet
hate-
banki
ngt
echnol
ogyr
educet
he
costofdel
ayander
ror
.

i
i
per
cent
ageofwor
kdonet
hroughel
ect
roni
cchannel

sour
ce:
quest
ionnai
rei
nter
pret
ati
on:

Asshowni
nthepi
echar
tabov
e,66.7%oft
her
espondent
sresponsesmor
ethan71%of
t
hebankswor
ksat
isf
iedt
hroughe-
banki
ngsy
stem.t
her
emai
ning20%and13.
3%oft
he
r
espondentagr
eed11%-
30% and51%-
70% oft
hewor
kaccompl
i
sht
hroughel
ect
roni
c
channel
.

i
i
Per
cent
ageofempl
oyeesusecomput
eri
nthei
rwor
kar
ea

Sour
ce:
Quest
ionnai
rei
nter
pret
ati
on

Asshownt
hepi
echar
tabov
e80% ofr
espondent
srespondedasabov
e50% oft
he
empl
oyeewho i
nthebankusese-
banki
ng i
nthei
rdayt
o dayoper
ati
on.butt
he
r
emai
ning20%r
espondent
srespondedasl
esst
han511%-
70%oft
heempl
oyeesusese
-
banki
ngi
nthei
rwor
kingact
ivi
ty.

ATM

Concer
ningt
headv
ant
ageofusi
ngATM machi
nest
her
espondentr
esponsesasi
t
f
aci
l
itat
est
het
ransact
ionmadebyt
hebank.i
naddi
ti
oni
tisf
astand speedyt
o
wi
thdr
awmoneyatanyt
ime,i
ttr
ansf
ermoneyf
rom oneaccountt
otheot
her
,itsav
e
t
ime,andi
tcanr
educet
hecostf
orper
sonnel
’
sandot
herr
elat
edcost
sand24hour

i
i
banki
ng ser
vice i
ncl
udi
ng hol
i
day and wi
thi
n shor
tti
me many cust
omercan be
ent
ert
ained

4.
3Int
erv
iewanal
ysi
swi
thmanager
Act
ivi
ti
es done bycommer
cialbankofEt
hiopi
ato change at
ti
tude ofcust
omer
commer
cial
bankofEt
hiopi
atr
iest
ochangeawar
enessorat
ti
tudeofcust
omert
owar
ds
e-
banki
ng.Act
ivi
ti
est
hatt
akenbyt
hebanki
nor
dert
osol
vecust
omer
s’pr
obl
emsl
i
ke,
t
heel
der
speopl
ecoul
dnotacceptadoptt
oday
’st
echnol
ogy
,ourcount
ryEt
hiopi
aisa
t
hir
dwor
ldcount
ryso,
ithasnotenought
echnol
ogyi
mpr
ovementi
nal
lit
stownexcept
i
nthemai
ntown,et
car
edi
str
ibut
ebr
owsert
othecust
omer
,makeapr
omot
ionabout
t
het
echnol
ogy
,bymedi
a,per
sonal
l
ygi
vi
ngi
nfor
mat
iont
othecust
omerandet
c.
Obst
acl
est
ouseE-
banki
ng
Ther
eisnoanaccesst
ouset
het
echnol
ogyi
nthecount
ry,
evenmor
ethepeopl
ehav
e
al
ackofawar
enesst
owar
dthet
echnol
ogy
,thebankgi
vese-
banki
ngser
vices.

Ty
pesofe-
banki
ngser
vicesusedbycommer
cialbankofEt
hiopi
a
commer
cialbank ofEt
hiopi
a gi
ves e-
banki
ng ser
vices,such as Aut
omat
ict
ell
er
machi
ne,
poi
ntofsal
e,mobi
l
ebanki
ngandi
nter
netbanki
ng.

E-
banki
ngsuppor
tst
heat
tai
nmentofcommer
cialbankofEt
hiopi
a
E-
banki
ngsuppor
tscommer
cialbankofEt
hiopi
abyf
ulf
il
li
ngt
hebanksmi
ssi
onand
v
isi
on.t
hei
rmi
ssi
onandv
isi
onsar
e,

Thebankbal
ancest
hecostspentf
ore-
banki
ngandi
tspr
ofi
tabi
li
ty
Commer
cialbankofEt
hiopi
acr
eat
eabal
ancebet
weencostspentont
hee-
banki
ngand
i
tspr
ofi
tabi
l
ityi
nor
dert
omeeti
tsgoal
bygr
eat
erav
ail
abi
l
ityofe-
banki
ng.

CHAPTERFI
VE

SUMMARY,
CONCLUSI
ON,
ANDRECOMMENDATI
ON

i
i
 5.
1Summar
yandconcl
usi
on

I
nthi
ssect
ionmaj
orf
indi
ngsandr
esul
tsar
ehi
ghl
i
ght
edwi
tht
heobj
ect
iveoft
hest
udy
whi
chi
sinv
est
igat
ingef
fectofel
ect
roni
cbanki
ngont
hepr
ofi
tabi
l
ityofcommer
cial
bankofEt
hiopi
a.

Keepi
ngi
nmi
ndt
hathowt
hegener
albackgr
oundoft
her
espondent
swi
l
lmat
ter
sthe
cl
ari
tyand concr
etenessoft
hedat
a.Wehav
e42 popul
ati
onswi
th di
ff
erentage,
educat
ionalbackgr
ound,
depar
tment
,andt
imet
heyhav
ewor
kedi
nthebank.Her
ewhat
mat
ter
smostar
ehoweachr
espondentr
espondt
hei
rownopi
nionwi
thoutanyi
nfl
uence.
Thi
sisbecausemyf
indi
ngwi
l
lbet
ruei
fandonl
yift
hedat
aar
efr
eef
rom anybi
as.Asa
r
esul
ttomaket
hedat
aandsuggest
ionf
reef
rom bi
as,
iti
str
iedt
otr
iangul
art
hesour
ce
ofi
nfor
mat
ionusi
ngcompr
ehensi
vequest
ionnai
reandi
nter
viewandt
hef
indi
ngwhi
ch
i
sinv
est
igat
edf
rom t
hosesour
cescanbesummar
izedandconcl
udedasf
oll
ows.

Fr
om t
hegener
albackgr
oundsoft
her
espondent
sitcanbeunder
standt
hatmostof
t
heempl
oyeesoft
hebankhav
eaf
ir
stdegr
eeandt
heyal
mosthav
ewor
kedf
rom 6-
10
y
ear
s.

 Accor
dingl
ytheanal
ysi
soft
hisr
esear
chshowst
her
eispr
obl
emst
hoseaf
fect
sthe
bankdonott
ousee-
banki
ngt
echnol
ogy
.Pr
obl
emst
hosecr
eat
ethegapi
nusi
ngoft
he
t
echnol
ogyar
elow awar
enessoft
hecust
omer
stowar
dse-
banki
ng,Ther
eisnoan
accesst
ouset
het
echnol
ogyi
nthecount
ry.Ri
singf
rom t
hisi
tcanconcl
udet
hat
,ther
e
i
sanobst
acl
est
ousee-
banki
ng.

 Fr
om t
hedat
agat
her
edi
tisobser
vedt
hate-
banki
ngt
echnol
ogyt
ri
est
ocont
ri
but
eon
t
heat
tai
nmentofgoaloft
hebankaccor
dingt
othemi
ssi
onandv
isi
onofcommer
cial
bankofEt
hiopi
a.But
,asi
tisment
ionedt
heabov
epar
agr
apht
her
eisanobst
acl
ein
usi
nge-
banki
ng.Theymaket
het
echnol
ogydon’
ttoi
mpr
oveandl
i
mit
sthecont
ri
but
ion
ont
heat
tai
nmentofgoal
asexpect
ed.

 Ther
eisl
owawar
enessofcust
omer
stowar
dse-
banki
ng.Thebanki
str
yingt
ochange
t
hisnegat
iveat
ti
tudeorper
cept
ionofcust
omer
sbydi
str
ibut
esbr
owser
,adv
ert
isi
ngt
he
t
echnol
ogyt
hroughmedi
aandbyf
acet
ofacecommuni
cat
ionwi
tht
hecust
omer
.But

i
i
 st
il
ltheawar
enessofcust
omer
stowar
de-
banki
ngi
snotwel
lchanged.

 Al
mostal
lrespondent
ssai
d,t
her
eisav
isi
blei
mpr
ovementofe-
banki
ngi
ncommer
cial
bankofEt
hiopi
a.Soexceptf
ort
heaf
orement
ionedshor
tcomi
ngse-
banki
ngpr
esent
sa
posi
ti
vecont
ri
but
iont
othepr
ofi
tabi
l
ityofcommer
cialbankofEt
hiopi
a.Whent
hebank
i
ncr
ease usi
ng oft
he t
echnol
ogyt
he cust
omer
s wi
l
lat
tr
act
ed and t
heyuse t
he
t
echnol
ogy
,andt
hent
hebankwi
l
lbeapr
ofi
tabl
ebyat
tr
act
ingmor
ecust
omer
s.

2Re
5. commendat
ion

 Ther
easonf
ornott
ousee-
banki
ngt
echnol
ogyef
fect
ivel
yisl
uckofawar
enessoft
he
cust
omer
sandl
ow accessoft
het
echnol
ogy
.So,t
hecust
omermustmakeagr
eat
ef
for
ttoi
ncr
easehi
sawar
enessaboutt
hei
mpor
tanceofusi
nge-
banki
ngt
echnol
ogy
f
orhi
msel
f.Thebankmustuset
heact
ivi
ti
esef
fect
ivel
yandef
fi
cient
lyt
hatcanmake
t
hecust
omer
saposi
ti
vet
hinkeraboute-
banki
ngt
echnol
ogy
.Ithast
oincr
easet
he
amountofbr
owsert
hatdi
str
ibut
etot
hecust
omer
.Andt
othei
l
li
ter
atecust
omer
sthose
can’
tread,t
heempl
oyeesoft
hebankmustgi
vei
nfor
mat
ionaboutt
heusagewi
thout
anybor
edom andt
hebankmusti
ncr
easet
henumberoft
hemedi
aoruseaddi
ti
onal
Medi
ast
oinf
ormt
hecust
omer
swel
l
.Bydoi
ngal
ltheabov
ebanksmustchanget
he
at
ti
tudeofcust
omerandmusti
mpr
ovei
tspr
ofi
tabi
l
ity
.

 I
n addi
ti
ont
otheabov
emechani
sm t
oincr
easecont
ri
but
ion ofe-
banki
ng on t
he
at
tai
nmentofbanksgoal
,Speci
alt
rai
ningshoul
dbegi
venbyt
hebankt
othenewand
exi
stedempl
oyeeswhoar
eyoungandv
ibr
antt
onew i
dea,E-
banki
ngmachi
nesmust
useef
fi
cient
lyt
out
il
izee-
banki
ngser
vicesand,t
hebankmustpl
antt
hemachi
nesi
n
ar
eawher
emar
ket
ers,
nightout
s,t
our
ist
s…et
car
efr
equent
ed.

 TheCompanyhassomee-
banki
ngcomponent
sthatt
hecompanyspenthi
ghcostt
o
pur
chasei
t,t
hiscostadv
ersel
yaf
fectt
hebank.I
nor
dert
oel
i
minat
ethi
sef
fectort
o
bal
ance t
he costand t
he pr
ofi
t,commer
cialbankofEt
hiopi
a shoul
d getgr
eat
er
av
ail
abi
l
ityofe-
banki
ngser
viceal
mostal
lar
eaoft
het
ownandt
henat
tr
actcust
omer
s

i
i
 t
oit
stechnol
ogy
.Fi
nal
l
ythecostofe-
banki
ngi
snotmuchaf
fectt
hebankbecauset
he
benef
itwhi
chwi
l
lgai
nfr
om r
isi
nge-
banki
ngexceedsf
rom i
tscost
.

 I
nor
dert
oimpr
ovet
heexi
sti
nge-
banki
ngt
echnol
ogy
,thesy
stem shoul
dhav
etobe
r
eengi
neer
ed and al
so suppor
ted byaut
omat
ion.Thecompanyshoul
d beused e-
banki
ngt
oimpr
oveoper
ati
onalef
fi
ciencyandcont
rolcar
ryoutst
rat
egyandmanagei
ts
r
esour
ces.Tooper
atet
henew e-
banki
ngt
echnol
ogy
,thest
affmustbet
rai
ned.I
tis
bet
tert
hatt
heempl
oyeest
rai
nedi
ncl
assesoront
hej
ob.

i
i
Ref
erence

1.Dudej
a,2003,Managementi
nfor
mat
ion sy
stem i
nthe new mi
l
lenni 1st
um (
edi
ti
on)
,shahazada,
newdel
hi.Pp(
105-
111)

2.E-
busi
ness;appl
i
cat
ionofsof
twar
eandt
echnol
ogyi
nsel
ect
edEt
hiopi
anbanks;
Tewodr
osSi
say
,2011,
Hawassapp(
20-
35)

3.Ef
foz,2002,Moder
nmanagementsy
st 3rd edi
em ( ti
on)
,cour
set
echnol
ogyUSA
pp(
225-
240)

4.Fer
ti
gandWest
,2001,
Bankt
othef
utur
e(1stedi
ti
on)
,USANewor
kpp(
98-
114)

5.JamsA,2003,I
ntr
oduct
iont
oinf
ormat
ionsy
st 11thedi
em, ti
on,
NewYor
kpp(167
-
172)

6.Mj
.Hander
son,
1988,
Banki
ngoper
ati
on,
(6TH edi
ti
on)Londonpp(
183-
195)

7.Mi
chaelH.
Mescon,2002,Busi
nesst
oday
,(4TH edi
ti
on)USAWashi
ngt
onDCpp
(
55-
71)

8.Rober
t,2001,Thenewi
nter
nat
i 6th edi
onalmoneygame ( ti
on)
,Londonpp(324-
338)

i
i
 Appendi
x

HawassaUni
ver
sit
y

Col
l
egeofbusi
nessandeconomi
cs

Depar
tmentofAccount
ingandf
inance
Dearr
espondent
;

Thisisthest
andardquesti
onerpreparestocol
lectdat
afortheimpactofe-banki
ng
ser
vicesi
n organi
zat
ional
profi
tabil
i
tyonCommer ci
albank.

Fi
rstofal
liwoul
dli
ket
othanky
ouf
ory
ouki
ndl
yhel
ptof
il
lthequest
ioner
,Pl
easef
il
l

i
i
 thequesti
onercaref
ull
yand put
””
marksintheboxpr
ovi
ded f
ormul t
ipl
echoice
quest
ion.Moreoverpl
easet
rytomenti
onsomepoi
ntf
ort
hosequest
ionswhichneed
expl
anat
ion.

1.Backgr
oundi
nfor
mat
ion;
I
. Howl
onghav
eyouwor
kedi
nCommer
cial
bank?

Bel
ow1y
ear 6-
10y
ear

1-
5year abov
e10y
ear

I
I. Educat
ional
quest
ion;

Cer
ti
fi
cat
e Seconddegr
ee

Fi
rstdegr
ee Col
l
egedi
ploma

1 Whati
syourdepar
tment
?

Net
wor
kandsy
stem Account
ant

Manager Cl
erk

Ot
herspeci
fi
c Assi
stant

3.Haveyouseeni
mpr
ovementi
ntheusageofe-
banki
ngi
nbanki
ngcompar
ingt
o
manualsy
stem?

Yes No

4.I
fyouranswerf
orquest
ionnumber3i
syes,
whati
sther
eason?

…………………………………………………………………………………………………

5.I
sitcost
lyt
ousee-banki
ngt
echnol
ogy
?

Yes No

6.I
fyouranswerf
ornumber5i
syes,
wri
tey
ourr
eason?

7.Doy
out
hinke-
banki
ngusedi
nal
lwor
kar
eaofbank?

Yes No

8.Cane-
banki
ngf
aci
l
itat
ewor
ksbedonef
astandmi
nimum er
ror
?

i
i
 Yes No

9.I
fyouranswerf
orquest
ionnumber8i
syeshow?

………………………………………………………………………………………….
.

10.Cane-
banki
ngr
educet
hecostofbusi
nessoper
ati
on?

Yes No

11.How many per

centof t
he bank wor
kis accompl
i
shed t
hrough el
ect
roni
c
channel
s?

Bel
ow10% 31%-
50% abov
e70%

11%-
30% 51%-
70%

12.Howmanyempl
oyeeshav
eusede-
banki
ngi
nthei
rwor
kingact
ivi
ty?

Lesst
han10% 21%-
35% abov
e50%

11%-
20% 36%-
50%

13.Howdoy
ouseet
headv
ant
ageofATM machi
ne?

…………………………………………………………………………………………

I
nter
viewquest
ionsf
ormanager
1.Whatt
ypeofe-
banki
ngser
vicedoesCommer
cial
bankuse?

i
i
2.Whatist
hedi
ff
erenceoft
hepr
ofi
tabi
l
ityoft
hebankbef
oreandaf
tert
heyusee-
banki
ng?

3.Howe-
banki
ngaf
fectempl
oyeesi
nthei
rwor
kper
for
mance?

4.Whati
sthei
mpactofe-
banki
ngonCommer
cial
bank?

5.Whati
sthebank’
sper
for
manceaf
tert
hepr
ecededf
ourorf
ivey
ear
s?

6.Howt
hebankbal
ancest
hecostspentf
orusi
nge-
banki
ngandi
tspr
ofi
tabi
l
ity
?

THANKYOUFORYOURCOOPERATI
ON

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