CHALLENGES AND PROSPECTS OF ON LINE BANKING SYSTEM (IN THE CASE OF CBE, GUBRE BRANCH)

Abstract

Despite the growth of online banking adoption worldwide, Ethiopian commercial banks continue to conduct most of their banking system transactions using traditional methods. The general objective of the study was on the challenges and prospects of online banking system in commercial bank of Ethiopia in Gubre branch. From this, three specific objectives were explored. A descriptive research design was employed to conduct this study. Primary data were collected for the purpose of this study from the commercial bank of Ethiopia from the manager and employees. The primary data are collected through questionnaire and interview. The collected data was analyzed by using descriptive analysis such as tables and percentages. From the analysis of the collected data, the findings revealed that: balance inquiry, cash Withdrawal, funds transfer within the bank, are some the major practice of online banking in commercial banks that are providing the service to their customer. The different online-banking channels by which bank are using to provide these services to their customers are ATM, debit card, Internet banking and Mobile banking. On the View point of the bank Cost reduction, reduce risks, it provide 24 hour service, provide quality service, coverage of wide geographical area, customer satisfactions are some of the prospects of using on line banking. The driving forces that initiate bank to adopt online banking services are : existence of high competition in the banking industry, desire improve organizational performance, desire to reduce transaction cost, desire to cover wide geographical area, and desire to build organizational reputation are among others. Interruption of networks, lack of skilled man power, Chances of risk, Lack of suitable legal and regulatory framework, absence of financial networks that links different banks, Low level of internet penetration and poorly developed telecommunication infrastructure, high cost of internet, security concerns are among the major challenges of on line-banking service in the commercial bank of Ethiopia in Gubre branch