AN ASSESSMENT ON BENEFITS AND RISKS OF E BANKING ON CUSTOMER SAVING: IN THE CASE OF CBE UNDER NORTH ADDIS ABABA DISTRICT

Abstract

Ethiopian banking system is still underdeveloped compared to the rest of the world. In Ethiopia Cash is still the most dominant medium of exchange and electronic payment systems are at an embryonic stage. This study is aimed to assess the benefits and risks of E banking on customer saving. The study was conducted based on the data gathered from Commercial Bank of Ethiopia, bank managers, clerks and customers. Qualitative and quantitative research approach was used to answer the research questions that emerge through the review of existing literature and the experiences of the researcher in respect of the E-banking system in Ethiopia. The study statically analyses data obtained from the survey questionnaire. The study used descriptive type of statistics and Data was analyzed using a statistical package for social sciences (SPSS). Result of the study indicated the introduction of e-banking has a positive effect on saving level of the country. The study also identified that Since most of our banks are at infant stage and they are not strong enough financially, cost of the automating their system could be a factor that affect the modernizing effort they tend to put in effect. It also indicated that E-banking affects customer consumption saving patterns by simplifying banking tasks, reducing costs per transaction, improving customer satisfaction, attracting new segment of customers, creating additional ways of transaction. The study suggests a series of measures which could be taken by the banking industry and by government to address various challenges identified in the thesis. These measures include: ICT infrastructure is a major prerequisite for e-banking and hence the government should support banking sector by investing on ICT infrastructure development, Aggressive e-banking awareness through all media of communication should be embarked upon by banks and Continuous effort must be put by the government and all stake holders to overcome hindering factors that are treats to the development of e-banking.