ADDIS AB AB A UNIVERSITY

SCHOOL OF GRADUATE STUDIES

THE IMPACTS OF E-BANKING SERVICES ON CUSTOMER

SATISFACTION: THE CASE OF SELECTED COMMERCIAL BANKS IN
ADDIS ABABA

A Thesi s Subm i tted to Addi s Ababa Uni v ersi ty i n Parti al Ful fi l l m ent of the
Requi rem ents for the Degree of Masters of Arts i n Publ i c Managem ent and
Pol i cy Speci al i zati on Devel opm ent Studi es

BY
SINTAYE HU YITB AR EK
Adviso r
Degefe Duressa (P h.D.)

February 2 015

Addis Ababa
 Addis Ababa Univers ity
Sc holl of Graduate Studies
Department of Public Adminis tration and Development Management

This is to certify that the thesis prepared by Sintayehu Yitbarek entitled The Impacts of E- banking
Services on Customer Satisfaction: the Case of Selected Commercial Banks in Addis Ababa
which is submitted in partial fulfillment for the Degree of Master in Public Management and
Policy (Development Management Stream) compiles with the regulation of the University and
meets the accepted standard with respect to origina lit y and qualit y.

Appro ved by B oard of Exami ners:

Degefe Duressa (P hD) ________________ _____________

Advisor Signature Date

______________________________ ________________ _____________

Internal Examiner Signature Date

______________________________ ________________ _____________

External Examiner Signature Date

_____________________________________
Chair of Department or Graduate Programs Coordinator Signatur e Date

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 Acknowle dgeme nts

First, I would like to thank almighty God, the compassionate, the most merciful and source of

knowledge and wisdom, who bestowed upon me the health, the power of communication

and the audacity to accomplis h this thesis.

I would like to sincerely thank my advisor Dr. Degefe Duressa for his constructive comments,

valuable suggest io ns and good guidance.

I also would like to thank to the staff and management of all the three commercial banks for their

response to research questionna ire and intervie w.

Lastly but not the least, my appreciation also goes to some of my colleagues, Masresha Mulat,

Michael Tamyale w, and Mulaw Berihun.

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 Table of Conte nts

Page
Ack now led ge me nts ......................................................................................................... i

Lis t o f Tab les ................................................................................................................. v

Page ................................................................................................................................ v

Lis t o f F igures ................................................................................................................ v

Acro nyms ...................................................................................................................... vi

Abst ract ........................................................................................................................ vii

1. INTROD UCTIO N ...................................................................................................1

1.1. Back gro und o f t he St ud y ...................................................................................1

1.2. State me nt o f t he Prob le m ...................................................................................2

1.3. O bject ives o f t he S t ud y ......................................................................................3

1.3.1. Ge nera l Object ive o f t he St ud y ............................................................3

1.3.2. Spec ific Obj ect ive o f t he St ud y............................................................3

1.4. Resea rc h Que st io ns ............................................................................................4

1.5. H ypot hes is ..........................................................................................................4

1.6. Scope of t he St ud y .............................................................................................5

1.7. Signif ica nce o f t he St ud y ...................................................................................5

1.8. O rga nizat io n o f t he S t ud y ..................................................................................5

2. LI TERA TURE REVI EW ........................................................................................7

2.1. Theore t ica l Is s ue ................................................................................................7

2.1.1. De finit io n o f E- Ba nk ing .......................................................................7

2.1.2. For ms o f E- Ba nk ing .............................................................................8

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 2.1.3. Service Q ua lit y .....................................................................................9

2.1.4. Custo mer Sa t is fact io n ........................................................................10

2.1.5. Custo mer Sa t is fact io n in Ba nk ing ......................................................11

2.1.6. The Re la t io ns hip bet wee n Ser vice Q ua lit y a nd C us to me r Sat is fac t io n12

2.1.7. Meas ur ing C us to me r Sat is fac t io n ......................................................13

2.1.8. De finit io n a nd Feat ures o f I ndepe nde nt Va r iab les .............................16

2.2. Emp ir ica l Evide nces ........................................................................................18

3. RES EARC H DESI GN AND M ETHODO LOGY .................................................23

3.1. Resea rc h P urpose .............................................................................................23

3.2. Resea rc h Met hodo lo gy ....................................................................................23

3.3. Data Co llect io n Tec hniq ue s a nd Me t hods o f Ana lys is ....................................23

3.4. Data So ur ce ......................................................................................................24

3.5. Popula t io n a nd Sa mp le ....................................................................................24

3.6. Resea rc h Mode l................................................................................................26

4. RES ULT AND DISCUSSIO N ..............................................................................28

4.1. Descr ipt ive F ind ings ........................................................................................29

4.1.1. De mo gr ap hic Pro fi le ..........................................................................29

4.1.2. Mean a nd Sta ndard De viat io n ............................................................30

4.2. Infere nce F ind ings ............................................................................................31

4.2.1. Chi- Squa re Test ..................................................................................31

4.2.2. Re gres s io n Ana lys is ...........................................................................32

4.3. Inter view Respo nses ........................................................................................40

5. CONCLUSION AND RECO MM ENDA TION.....................................................43

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 5.1. Conc lus io n .......................................................................................................43

5.2. Reco mme ndat io n .............................................................................................44

BI BLIO GRAP HY ........................................................................................................46

APPEN DIX ..................................................................................................................54

Appe nd ix- A Q uest io nna ire for C us to me rs ..............................................................54

Appe nd ix B- Inter view q uest io ns fo r Custo mer Ser vice Ma na ge rs .........................56

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 Lis t of Table s Page

Table 3.1 Population and Sample Size Determinat io n 25

Table 3.2 Actual Number of Cases and Corresponding Sampled Branches 26
Table 4.1 Cronbach Alpha Coeffic ie nt for each Variable 28
Table 4.2 Demographic Profile of E- banking Customers 29
Table 4.3 Mean & Standard Deviatio n 30
Table 4.4 Chi- Square Test for Independence Result 31
Table 4.5 Correlation Matrix between Explanator y Variables 33
Table 4.6 Correlation Matrix: CSEB 36
Table 4.7 Model Summery 36
Table 4.8 ANOVA 37
Table 4.9 Regression Coeffic ie nt Analys is of the Model 38

Lis t of Figure s

Figure 4.1 N ormal Point Plot of Standardized Residual 34

Figure 4.2 Frequency Distribut io n of Standardized Residual 35

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 Acronyms
AN OVA Analys is of Variance
ATM Automated Teller Machine
CSEB Customer Satisfact io n in Electronic Banking
EBSQ Electronic Banking Service Quality
EFT Electronic Fund Transfer
ICT Informat io n and Communicat io n Technology
PO S Point of Sale
SERVQ UAL Service Quality
SMS Short Message Service
TA Technology Associate
TOE Technology- Organizat io n Enviro nme nt

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 Abs trac t
The purpose of t his st udy is t o inv est igat e im pact s of e-bank ing serv ices on cust omer sat isf act ion,
it s relat ion wit h demographic charact erist ics, and maj or challenges in e-bank ing act iv it ies t o
sat isf y t he cust omers of t he select ed priv at e and public com mercial bank s in Addis Ababa. The
st udy used quant it at iv e research approach by employed mult iple linear regressions m odels f or t he
Cust om ers Sat isf act ion in Elect ronic Bank ing (CSEB) and chi-square independency t est t o see
t he relat ionship bet ween dem ographic charact erist ics and sat isf act ion of e-bank ing users.
Prim ary dat a were collect ed by using 5-point Lik ert -scale quest ionnaire and int erv iew wit h
branch managers and cust omer serv ice superv isors of t he select ed com mercial bank s. A t ot al of
300 quest ionnaires were properly f illed and ret urned. The empirical result shows t hat serv ice
qualit y dim ensions; reliabilit y, cust omer support and ease of use hav e st rong inf luence on e-
bank ing user’s sat isf act ion lev el in bot h public and priv at e commercial bank s in Addis Ababa.
Thus, m anagement bodies of com mercial bank s should st riv e t o st rengt hen t hese serv ice
dim ensions. There is also a relat ionship bet ween sat isf act ion in e-bank ing and age and
educat ional lev el of users of e-bank ing. The maj or problem f aced by com mercial bank s in relat ion
t o e-bank ing is net work f ailure due t o poorly dev eloped t elecommunicat ion inf rast ruct ure, lack of
reliable power supply, and lack of ICT k nowledge f rom cust omers end. In order t o sust ain a
reliable serv ice f or such t echnology, comm ercial bank s should work wit h gov ernment bodies
(Et hio-Telecom and Et hiopian Elect ric Power). They also need t o increase t he conf idence of t heir
cust omers as well as dev eloped sk ills and k nowledge of cust omers in using e-bank ing serv ices.
Key words: E-bank ing, Cust omer Sat isf act ion

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 CHAPTER ONE

1. INTRODUCTION

1.1. B ackg round of the Study

Banks play an important function in the economy of any country. They are the main

intermediaries between those with excess money (depositors) and those individuals and

businesses with viable projects but requiring money for their investment (creditors). Banks have

at least the following functions: lending money, depositing others’ money, transferring money

locally or abroad and working as paying agent (Tefere, 2013).

In the face of rapid expansion of electronic payment systems throughout the world, the

Ethiopian financial sector cannot remain an exception in expanding the use of the system

(Garedachew, 2010). E- banking plays a crucial role in the banking industry by creating value for

banks and customers. E- banking has enabled banking institutions to compete more effectively in

the global environment by extending their and services beyond the restriction of time and space

(Turban, 2008).

Nowadays, people are so busy in their work lives, that they don't even have time to go to the bank

for conducting their banking transactions. Thus, banks provide e- banking facility to their

customers as an added advantage. These services enable people to carryout their banking

transactions such as – see their account balances, pay bills, view records of transactions, transfer

money to linked accounts with in the same bank, transfer money to specially selected unlinked

accounts, check interest in accounts, send money overseas, etc.

E- banking is one of the most recent channels of distribution used in the financial services

organizations. This method was established in the mid- 1990s, thereafter becoming more important

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(Allen L. & Rai A., 1996). It has been widely used in developed countries. However, in

developing economies, the spread is much limited. As suggested by Classens, Glaessner, &

Klingebiet (2002), developing countries in general have an advantage as they can learn from the

experience of advanced economies. Today, almost all banks in Ethiopia are adopting electronic

banking as a means of enhancing service quality of banking. It also increases customer

satisfact io n in banking services (Shittu, 2010).

1.2. Statement of the P robl em

Banks in Ethiopia are involved in tough competition to attract customers by delivering various

services. It is better for customers to have broad choices to select best bank for them to satisfy

their needs. For banks as well, they have to find the ways to satisfy customers and keep

competitive advantages above other banks. In pursuit of round the clock customer services and

keep abreast with the developing global banking technology, almost all banks in Ethiopia are fast

moving toward launching new technology based products and services such as internet banking,

mobile banking, ATMs, POS etc.

Commercial banks in Ethiopia have launched e- banking services as part of ensuring service

excellence by reducing waiting time, errors, costs, and improve customer satisfaction. In order to

encourage or discourage further e- banking expansion in Ethiopia, a better understanding of its

impact on customer satisfaction is critical. However, despite the importance of e- banking in

bringing customer satisfaction limited studies are available in Ethiopia both in terms of number

and scope. Therefore, more studies are still required to understand the relevancy of e- banking in

the country.

Assefa (2013) conducted a study on the impact of e- banking on customer satisfaction in two

branches of private banks in Gondar City. The researcher used qualitative approach in analyzing

this study and it was limited to customers of two privet banks only. In addition to this, only ATM

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was considered as e- banking because there was no any other form of e- banking in the study area.

Bultum (2014) also studied factors that affect adoption of e- banking in the Ethiopian banking

industry. Still this study was entirely focused on factors that affect adoption of e- banking.

Satisfaction of customers towards e- banking required to be investigated to understand the

relevancy of e- banking in the country. Therefore, the present study bridged the gap of

methodology by using quantitative approach which employs MLR model. Question of

representativeness of the sample also solved by including state owned commercial bank which

owned more than half of the total e- banking customers in Ethiopia. E- banking platforms including

ATM, POS, mobile banking and internet banking were also considered under this study.

The study is designed to examine the impact of e- banking on the satisfaction of its users. It also

assesses whether e- banking customers are constrained by the technology, particularly on the basis

of different demographic characteristics, such as different age groups, educational level,

employme nt status and etc.

1.3. Objecti ves o f the Study

1.3.1. Ge ne ral Obje ctive of the Study

The main objective of this study is to find the electronic banking service dimensions that have the

impact on customer satisfaction in two private banks Dashen Bank (DB) and Wegagen Bank

(WB) and one public bank Commercia l Bank of Ethiopia (CBE) in Addis Ababa area.

1.3.2. Spe cific Obje ctive of the Study

Specifica lly, this study aspires to achieve the following objectives;

 To identify the major electronic banking service dimensions that have impact on customer

satisfact io n.

 To analyze the level of customer satisfact io n in e- banking in the study area.

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  To see the relationship of demographic variables (age, occupation and education) and

customers satisfact io n in e- banking.

 To find out the problems in e- banking activit ies to satisfy the customers.

1.4. Research Questi ons

 What are the major electronic banking service dimensions that have the impact on

customer satisfaction among Commercial Bank of Ethiopia, Dashen Bank and Wegagen

Bank?

 What is the level of customer satisfact io n in e- banking in the three commercia l banks?

 Is satisfaction in e- banking services related to age, occupational and educational status in

the city?

 What are the major challenges problems in e- banking activities to satisfy customers at the

three banks?

1.5. Hypo thesi s

 M ajor Hypothe s is

H0 : E- Banking service quality has no significa nt positive impact on customer satisfact io n

H1 : E- Banking service quality has significa nt positive impact on customer satisfact io n

 Sub Hypothe s is

H0 1 : Reliab ilit y has no signif ica nt positive impact on customer satisfact io n

H1 1 : Reliabilit y has significa nt positive impact on customer satisfact io n

H0 2 : Transaction effic ie nc y has no significa nt positive impact on customer satisfact io n

H1 2 : Transaction effic ie nc y has significa nt positive impact on customer satisfact io n

H0 3 : Customer support has no signif ica nt positive impact on customer satisfact io n

H1 3 : Customer support has signif ica nt positive impact on customer satisfact io n

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H0 4 : Service security has no significa nt positive impact on customer satisfact io n

H1 4 : Service security has significa nt positive impact on customer satisfact io n

H0 5 : Ease of use has no signific a nt positive impact on customer satisfact io n

H1 5 : Ease of use has significa nt positive impact on customer satisfact io n

H0 6 : Performance has no significa nt positive impact on customer satisfact io n

H1 6 : Performance has significa nt positive impact on customer satisfact io n

H0 7 : Service content has no signif ica nt positive impact on customer satisfact io n

H1 7 : Service content has signif ica nt positive impact on customer satisfact io n

1.6. Scope of the Study

First, the study is confined only to customers’ perspective of e- banking. Second, it does not

include bank customers who are registered and took e- cards and yet never utilize it. Third, it is

also limited to banks customers who have been using e- banking up to the maximum of three years

in one public bank (Commercial Bank of Ethiopia) and two private banks (Dashen Bank &

Wegagen Bank).

1.7. Si gni fi cance of the Study

The study will help both public and private banks to;

 Understand the impact of variables of e- banking on customer satisfact io n.

 Formulate appropriate strategies in building customer satisfact io n.

 Realize the existing limit at io ns of e- banking within the sector.

 Add value to the existing knowledge related to electronic banking and customer satisfaction

in financ ia l instit ut io ns.

1.8. Organi zati on of the Study

The study is organized in to five chapters. The first chapter deals with background of the study,

statements of the problem, objective of the study, the research questions, scope of study,

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significance of the study, and organization of the research. The second chapter presents

previous related research conducted on e- banking and customer satisfaction locally and globally.

The third chapter explains types and source of data that are used for the study , sampling

techniques used to determine the sample size, data analysis method and collection tools. The

fourth chapter discusses the analysis and result of the study. The last chapter presents conclusion

and recommendat io n of the study.

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 CHAPER TWO

2. LITERATURE REVIEW

2.1. Theoreti cal Issue

2.1.1. D e finition of E-Banking

E- banking has a variety of definitions all of which explains similar concept. The following section

shows some of these definit io ns.

E- banking is a form of banking service where funds are transferred through an exchange

of electronic signal between financial institutions, rather than exchange of cash, checks, or other

negotiable instruments (Kamrul, 2009). E- banking also known as electronic funds transfer (EFT).

It is simply the use of electronic means to transfer funds directly from one account to another

rather than by check or cash (Malak, 2007).The term e- banking often refers to online/internet

banking which is the use of the internet as a remote delivery channel for banking services (Furst

& N olle, 2002, p.5). E- banking is the use of a computer to retrieve and process banking data

(statements, transaction details, etc.) and to initiate transactions (payments, transfers, requests

for services, etc.) directly with a bank or with other financial service provider remotely

via a telecommunications network (Yang, 1997). It should be noted that electronic banking is a

bigger platform than just banking via the internet.

E- banking can be also defined as a variety of platforms such as internet banking or

(online banking), TV- based banking, mobile phone banking, and PC (personal computer)

banking whereby customers access these services using an intelligent electronic device, like

PC, personal digital assistant (PDA), automated teller machine (ATM), point of sale (POS), kiosk,

or touch tone telephone (Alagheband, 2006).

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2.1.2. Forms of E-Banking

There are many electronic banking delivery channels to provide banking service to customers.

Among them ATM, POS, Mobile banking and internet banking are the most widely used and

discussed below.

ATM

ATM is an electronic machine in a public place, connected to a data system and related equipment

and activated by a bank customer to obtain banking services without going in to the banking hall.

It allows customers to access banking services such as withdrawals, transfers, inquiries about

account balances, requests for cheque books, account statements, direct deposits, foreign

currency exchange etc. (Fenuga, 2010). Using an ATM requires an ATM card and a pass code,

often referred to as a PIN (Personal Identificat io n Number).

INTERN ET BANK ING

Internet banking is conducted by completing bank transactions by directly accessing the bank

through the internet. Nowadays, internet banking customers can access many different services

online, which makes physical banks open even after office hours. Internet banking allows

customers of a financial institution to conduct financial transactions on a secure website operated

by the institution. Internet banking can be conducted either by accessing the internet with a

computer or by using a phone that has internet features (Alabar & Timothy, 2012).

PO S

Point of Sale (PO S) also sometimes referred to as Point of Purchase (POP) 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. A

POS terminal manages the selling process by a sales person accessible interface. The same

system allows the creation and printing of the receipt (Shittu, 2010).

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MO BILE BANKIN G

Mobile banking (also known as M- Banking) is a term used for performing balance checks,

account transactions, payments, credit applications and other banking transactions through a

mobile device such as a mobile phone or Personal Digital Assistant (PDA). The earliest

mobile banking services were offered over SMS, a service known as SMS banking. Mobile

banking is used in many parts of the world with little or no infrastructure, especially remote

and rural areas. This aspect of mobile commerce is also popular in countries where banks can only

be found in big cities, and customers have to travel several miles to the nearest bank. The scope

of offered services may include facilities to conduct bank and stock market transactions, to

administe r accounts and to access customized infor mat io n (Tiwari & Buse, 2007).

2.1.3. Se rvice Quality

The present business era is now named as “Quality Era” because perceived quality of the

product is becoming the most important competition factor in business world (Bedi, 2010). It

is now the most powerful competition weapon and organization’s life giving blood. Perceived

service quality refers to the consumer’s global attitude or judgment of the overall

excellence or superiority of the service. It is a result from comparisons by consumers of

expectations with their perceptions of service (Caruana & Malta, 2002). That means it can be

termed as the extent of matching or the degree of discrepancy to which the service delivered

matches customer expectations (Parasuraman, Zeithmal, & Berry, 1988). Delivering quality

service means conforming to customer expectations on a consistent basis (Thakur, 2011).

Today one of the most dominant topics of research in services is service quality. It is necessary

for service providers to understand how customers evaluate the quality of service. When

customers consume a product, they compare the quality of experience with their prior

expectations, which leads to their satisfaction or dissatisfaction (Thakur, 2011). Therefore

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services marketing researchers based their work on developing a service quality concept focused

on consumer behavior instead of using manufacturing quality concepts (Dhandabani, 2010). Thus

it had been recognized that customers evaluate service quality by comparing the actual

performance with service expectations that they held (Thakur, 2011).

2.1.4. Cus tome r Satis faction

Customer satisfaction is a measure of how products and services supplied by a company meet or

surpass customer expectation. Customer satisfaction is also defined as the number of customers

whose reported experience with a firm exceeds specified satisfaction goals (Farris, Paul et al.,

2010). Another definition of customer satisfaction refers to the extent to which customers are

happy with the products and/or services provided by a business. Further definition of customer

satisfaction states that it is a term generally used to measure a customer's perception of a

company's products and/or services (Ahmed, 2005). It's not a straight forward science. Customer

satisfaction will vary from person to person, depending on a whole host of variables which may

be both psychologica l and physical.

According to Saha & Zhao (2005), customer satisfaction is defined as a collection of outcome of

perception, evaluation and psychological reactions to the consumption experience with a

product/service. In other words, Saha and Zhao further defined customer satisfaction as a result of

a cognitive and affective evaluation where some comparison standard is compared to the

actually perceived performance. If the performance perceived is less than expected, customers

will be dissatisfied. On the other hand, if the perceived performance exceeds expectations,

customer will be satisfied.

In a competitive market place where businesses compete for customers, customer satisfaction is

seen as a key differentiator and increasingly has become a key element of business strategy (Carl

& McDaniel, 2005). It is seen as a key performance indicator within business and is often part of

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a Balanced Scorecard. Therefore, it is essential for organizations to effectively manage customer

satisfaction. To be able do this, organizations need reliable and representative measures of

satisfact io n.

In researching satisfaction, firms generally ask customers whether their product or service has met

or exceeded expectations. Thus, expectations are a key factor behind satisfaction. When

customers have high expectations and the reality falls short, they will be disappointed and will

likely rate their experience as less than satisfying (John & Joby, 2003).

2.1.5. Cus tome r Satis faction in Banking

Customer satisfaction is a key determining factor why customers leave or stay with a bank.

Fornell (1992) cited in Thakur (2011) noted that although customer satisfaction and quality

appear to be important for all firms, satisfaction is more important for loyalty in service

industries like bank. Because even if the customers appear to be satisfied, they may look

for other bankers if they believe they might receive better service elsewhere (Reichheld, 1996)

cited in Thakur (2011). Thus the banking organizations need to know how to keep their

customers. However, keeping customers is also dependent on a number of other factors. These

include a wider range of service choices, greater convenience, better prices, and enhanced income

(Thakur, 2011).

Ioanna (2002) cited in Thakur (2011) further proposed that differentiation is nearly impossible in

a competitive environment like the banking industry. Banks everywhere are delivering nearly

same services. Thus, bank management tends to differentiate their firm from competitors through

service quality. Service quality is a crucial element which impact customers’ satisfaction level in

the banking industry. Generally in banking, quality is a multivariable concept, which includes

differing types of convenience, reliability, services portfolio, and critically, the staff

deliver ing the service (Storbacka et al., 1994) cited in Thakur (2011).

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Minimum price with maximum usage and profit always breeds higher level of satisfaction (Jamal

& K amal, 2004) cited in Afsar (2010). When pricing is not suited to the needs of the customers,

dissatisfaction usually occurs. In banking industry also, the interest rates on loans and charges on

the usage of online services such as ATM machines and the processing fee is a major

source of conflict between the bank and its customers. If customers think that the charges are

more than it should become paring to their needs, they switch. Competition is now fierce in

banking industry as it has become too easy to open an account in any other bank that results

switching cost to be very minimal. But if a customer is satisfied, the loyalty injects

automatically and the customer remains with the current banker for a longer and longer period

of time (Fox & Poje, 2002) cited in Afsar (2010).

2.1.6. The Re lations hip be twe e n Se rvice Quality and Cus tome r Satis faction

The status or prestige of an organization is determined by the quality of the provided

services. O rganization of high quality level of its services has a high competitive position.

Achieving a high level of services meet the needs of customers. Studies confirmed that

service quality and customer satisfaction have strong relationship (Alagheband, 2006; Bedi, 2010;

Keiningham, 2005). when the customer receives high quality service his behavior and

attitude towards the organization will be positive and that would strengthen the relationship with

the organization and vice versa. Customer satisfaction is the most important criteria that enable

organiza t io ns to ensure the quality of their goods or services (Parasuraman et al., 1985).

In case of the banking sector, recognized standard scales to measure the perceived quality of a

bank service is not available. Thus providing high quality service is being taken as an important

weapon to survive and to gain and maintain competitive advantage (Bateson, 1985) cited in

Thakur (2011).

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For commodity like products, quality can be measured easily by its features. But quality of

service depends heavily on the quality of the personnel of service provider or the provider

himself. Studies on customers’ switching from banks have found that they do so because they

considered to be poorly serviced. Quality service improved customer satisfaction and reduced

customer erosion (Thakur, 2011).service quality is the key to measure e- banking user satisfaction.

Researchers have paid much attention to the close relationship between service quality and

customer satisfact io n (Parasuraman et al., 1985).

2.1.7. M e as uring Cus tome r Satis faction

Customer satisfaction is measured at the individual level, but it is almost always reported at an

aggregate level. Customer satisfaction is an ambiguous and abstract concept and the actual

manifestation of the state of satisfaction will vary from person to person and product/service to

product/service. The state of satisfaction depends on a number of both psychological and

physical variables which correlate with satisfaction behaviors such as return and

recommend rate. The level of satisfaction can also vary depending on other options the customer

may have and other products against which the customer can compare the organization's products

(David, 2010).

It is also well recognized that measuring service quality is more difficult than to measure good’s

quality because of the unique characteristics of services. The main characteristics of services in

general and banking services in particular are the following (Parasuraman, Zeithmal, & Berry,

1988):

 It’s intangib le, since services are not material and cannot be touched.

 The production and consumption of service happens at the same time, which means

that it is produced upon request.

 Service cannot be stored

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Most researchers found that service quality is the antecedent of customer satisfaction (Bedi, 2010;

Kumar et al., 2010; Kumar et al., 2009; Naeem and Saif, 2009; Parasuraman et al., 1988). Quality

customer service and satisfaction are recognized as the most important factors for bank customer

acquisition and retention (Jamal, 2004; Armstrong and Seng, 2000; Lassar et al., 2000). Service

quality is considered as one of the critical success factors that influence the

competitiveness of an organization. A bank can differentiate itself from competitors by

providing high quality service. Service quality is one of the most attractive areas for researchers

over the last decade in the retail banking sector (Avkiran, 1994; Stafford, 1996; Johnston, 1997;

Angur et al., 1999; Lassar et al., 2000).

According to Tse & Wilton (1988) customer satisfaction is the consumer’s response to the

evaluation of the perceived discrepancy between prior expectations and the actual performance of

the product. The service quality variables identified by (Parasuraman et al., 1994) are

reliability, responsiveness, competence, accessibility, courtesy, communication, credibility,

security, understanding and tangibility. Service quality leads to overall customer satisfaction. It

is one of the service factors contributing to customers’ satisfaction judgments and can be

considered in mult i- le ve l and mult i- d ime ns io na l (Caruana & Malta, 2002).

Yang, Jun, & Peterson (2004) identified five online service quality dimensions (responsiveness,

reliability, competence, access and security) and their relationships with the customer satisfaction.

Wolfinbarger & Gilly (2002) observed that reliability and fulfillment are the strongest predictors

for customer satisfaction. Lui & Arnett (2000) identified five critical dimensions of online service

quality in relations to customer satisfaction in the website. Among these, the quality of

information that is relevant, accurate, timely, customized and complete are given priority for the

customer satisfaction in the online service. Johnston (1997) identified attentiveness,

responsiveness care and friendliness as the main sources of satisfactions (satisfiers) in banking

14
services, and integrity, reliability, availability and functionality as the main sources of

dissatisfaction. Khalil & Pearson (2007) have found that trust significantly affects attitude towards

internet banking acceptance. To encourage internet banking adoption, banks need to develop

strategies that improve the customer’s trust in the underlying technology. The other factors

include quick response, assurance, follow- up and empathy. Security, correct transaction, customer

control on transaction (personalization), order tracking facilities and privacy are other important

factors in the online service that affect the customer satisfaction. Joseph, McClure, & Joseph

(1999) investigated the influence of internet on the delivery of banking services. They found six

underlying dimensions of e- banking service quality as convenience and accuracy, feedback and

complaint management, efficiency, queue management, accessibility and customization. Jun &

Cai (2001) identified 17 service quality dimensions of Internet banking service quality. These are

reliability, responsiveness, competence, courtesy, credibility, access, communication,

understanding the customer, collaboration, continuous improvement, content, accuracy, ease of

use, timeliness, aesthetics, security and divers features. They also suggested that some dimensions

such as responsivenes s, reliabilit y and access are critica l for both traditiona l and internet banks.

Hua (2009) conducted an experiment to investigate how user’s perception about online

banking is affected by the perceived ease of use of website and the privacy policy

provided by the online banking website. In this study, it also investigates the relative

importance of perceived ease of use, privacy, and security. Perceived ease of use is of

less importance than privacy and security. Security is the most important factor influencing

user’s adoption.

Jun et al (1999) revealed reliable/prompt responses, attentiveness, and ease of use had

considerable impacts on both customers perceived overall service quality and satisfaction. It also

indicated that there is a significant positive relationship between overall service quality and

15
satisfaction. Yang & Jun (2002) redefined the traditional service quality dimensions in the context

of online services, and suggested an instrument consisting of seven online service dimensions

(reliability, access, ease of use, personalization, security, credibility, and responsiveness). Joseph

et al (1999) considered banking service quality with respect to technology use, such as ATMs,

telephone, and the internet and identified six dimensions. They were convenience/accuracy,

feedback/complaint management, efficiency, queue management, accessibility, and

customizat io n.

Zeithaml et al (2000) developed SERVQUAL for measuring e- service quality. They identified 11

dimensions: access, ease of navigation, efficiency, flexibility, reliability, personalization,

security/pr i vac y, responsive ness, assurance/tr ust, site aesthetics, and price knowledge.

Extensive study on service quality conducted by researchers have proposed that service quality

can be measured using the SERVQUAL instrument (Parasuraman, Berry & Zeithaml 1985, 1988).

The attributes of initial SERVQ UAL model were tangibles, reliability, responsiveness,

competency, courtesy, assurance, credibility, security, access, and understanding. Later reduced

these ten dimensions into five by using a factor analysis (Parasuraman et al, 1988). These

five dimensions are tangibles, reliability, responsiveness, and Empathy. The SERVQUAL

instrument provides the computed disconfirmation approach whereby the difference between a

customer’s expectation and the actual performance is calculated (Dhandabani, 2010).

2.1.8. D e finition and Fe ature s of Inde pe nde nt Variable s

 Reliabil it y

Reliability refers to the ability to perform the promised service accurately and consistently. It

involves accuracy in billing, keeping records correctly, and performing the service at the

designated time. Reliability consists of providing services as promised, dependability in handling

customers’ service problems, prompt reply to customer enquiries, provide services at the

16
promised time and maintaining error- free record. Reliability is the most important factor in

conventio na l service (Parasuraman, Zeithaml, & Berry 1988).

 Transactio ns Effic ie nc y

Transaction efficiency is the ability of the customers to get any of e- banking service, find the

desire product and information associated with it, and check out with minimal of effort.

Transaction efficiency also can understand as performance of e- banking base on some elements:

up to date information, response time, download time, complete product information,

tutorial/de mo ns tra t io n, and help functio n (Leelapongp ras ut et al, 2005).

 Customer Support

Customer support includes before sell and after sell support. Before customer make decisions, the

company should give some support to attract them, let customers feel they are at home. The

relationship is like a good friend not like a business. After customers buy the services or products,

company should solve the problem that customers met or respond to customers’ questions

immediately and according to the problems, company can ameliorate them. In the e- banking

industries, support is also important. Not everyone is good at different technology so they need

guide on how to use the service. Sometimes, after services on the e- banking, customers might

have questions waiting to answer, so he or she also needs support. So support is very important

for customers (Rangsan & Titida, 2013).

 Service Security

Security is defined as the freedom from danger, risk, or doubt. It involves physical safety,

financial security and confidentiality. It consists of employees who instill confidence in

customers, making customers feel safe in their transactions, employees who are consistently

courteous and employees who have the knowledge to answer customer question (Parasuraman,

Zeithaml & Berry, 1985). Moreover, security is defined as personal and possessions safety of the

customers. It also includ es confident ia lit y mainta ined by service providers (Johnston, 1997).

17
 Ease of Use

Ease of use is important in using e- banking, which related to customer apprehension about the

efforts required to learn to use e- banking (David, 2010). It is considered as the factor influencing

the adoption of e- banking, and related to an easy- to- remember pin codes and URL address, well-

organized and usable software, easy of site navigability, concise and understandable contents,

terms and conditions (Alagheba nd, 2006).

 Performance

Performance is the operating quality of each e- banking service and feature offered by banks. It

includes whether e- banking services provide in multi- language or not, e- banking provide 24

houres- 7 days service, allow to transfer funds between banks (Garvin, 1987).

 Service Content

Service content is all information that is provided to customers. For electronic banking service, it

means the content that banks provide to customers through their website, ATM & POS terminal

and Mobile. High value added content is essential.

2.2. Empi ri cal Evi dences

Some related studies are conducted by different researchers in different parts of the world.

However, there are limited numbers of studies conducted in Ethiopia on e- banking technology.

Specifically (Gardachew, 2010) conducted a research on the opportunities and challenges of e-

banking in Ethiopia. The study was focused on analyzing the status of electronic banking in

Ethiopia and investigates the main challenges and opportunities 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 illiterac y and absence of financ ia l networks that links differe nt banks.

18
Wondossen & Tsegai (2005) also studied the challenges and opportunities of e- payments in

Ethiopia; their objective was studying of e- payment practices in developing countries. The

authors employed interview and on site observation to investigate challenges to e- payment in

Ethiopia and found that, the main obstacles to the development of e- payments are, lack of

customers trust in the initiatives, unavailability of payment laws and regulations particularly for e-

payment, lack of skilled manpower and frequent power disruption. According to (Wondwossen &

Tsegai, 2005), an adequate legal structure and security framework could foster the use of e-

payments, which is contradict ing with the finding of the previous study.

The study of (Bultum, 2014) aims to identify factors that affect adoption of e- banking in the

Ethiopian banking industry. The study was conducted based on the data gathered from four banks

in Ethiopia; three private banks (Dashen bank, Zemen bank and Wegagen bank) and one state

owned bank (commercial bank of Ethiopia). A mixed 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 statistically analyzes

data obtained from the survey questionnaire. A research framework developed based on

technology- organization environment model (TOE) developed by Tornatzky and Fleischer. The

result of the study indicated that, the major barriers Ethiopian banking industry faces in the

adoption of electronic banking are: security risk, lack of trust, lack of legal and regulatory frame

work, lack of ICT infrastructure and absence of competition between local and foreign banks.

The study suggests a series of measures which could be taken by the banking industry

and by government to address various challenges identified. These measures include

establishing a clear set of legal framework on the use of technology in banking industry,

supporting banking industry by investing on ICT infrastructure and banks needs to be focused

on technological innovation competition rather than traditional bases of retail bank

competitio n.

19
Furthermore (Assefa, 2013) conducted a study on the impact of e- banking on customer

satisfaction in two privet banks in Gondar city. The researcher employed descriptive and

inferential statistics in analyzing this study and it was limited to customers of two privet banks

only. The results of the study implied that majority of users of e- banking are the young, the

educated, salaried and students, business men and women are not actively using the service

of e- banking, e- banking currently provided for saving and current accounts holders only, e-

banking reduced frequency of bank hall for banking service, reduced waiting time for customers,

there are customers who don’t know the fee charged for being e- banking users , the bank

customers satisfaction increased after being e- banking users, enabled customers to control their

account movement s and there is high opportunit y to expand e- banking service in the city.

The study of (AlaEddin & Hasan, 2011) on e- banking functionality and outcomes of customer

satisfaction in Jordanian commercial banks, it aims to explore the adoption of e- banking

functionality and investigates the impact of e- banking on the outcomes of customer satisfaction. A

purposive sampling technique was employed to recruit 179 customers representing the desired

range of demographic characteristics (e.g. gender, age, and computer use), previous internet

experience levels and product- related knowledge. The research showed that adoption of e- banking

(accessibility, convenience, security, privacy, content, design, speed, fees and charges) had a

positive effect on Jordanian Commercia l Bank customers' satisfact io n.

Gerrard et al (2006) in their study in Singapore identify risk to be an important factor for

Internet Banking adoption. All respondents who did not use internet banking services had a

negative perception of the security in Internet Banking. The respondents perceived that there were

many security risks when using the internet. They felt the privacy was a concern, feeling all their

financial information could be in jeopardy. Risk was one of the two most frequently

mentioned factors in their study, concern about risk was mentioned by all respondents. An

empirical investigation conducted by Sathye (1999) on the adoption of Internet Banking by

20
Australian consumers also identified, security concerns as key factor in internet banking adoption.

A report on Internet Banking in Australia finds that, security concerns among banks and

customers are keeping both away from Internet Banking (Sathye, 1999).

The study of Kerem (2003) on the adoption of electronic banking: underlying consumer

behavior and critical success factors conducted in Estonia, was intended to study the

further understanding of, how consumers perceive electronic banking in the heyday of interactive

channels in Estonia, as Estonia is internationally renowned for being a pioneer in the

acceptance of new technologies. A series of an in depth interviews was conducted with leading

industry experts in Estonia. The selection criterion for the respondent was mainly their

involvement with the development of Internet banking systems from the early days of its

emergence. The survey conducted for this research addressed six different issues influencing

the adoption of Internet banking (Better prices, Recommendations, Better service,

Marketing efforts, Better access and higher privacy). The most important factors in starting to

use Internet banking are first and foremost better access to the services (convenience), better

prices and higher privacy. Better service (i. e. preferring self- service over office service) was also

of above average importance. Two factors that the respondents did not consider relevant to their

adoption decision were banks' marketing activities and personal recommendations from friends

and colleagues. Also the survey conducted six main obstacles (computers are difficult, no

access to internet, internet banking is expensive, low security, have had no chance to try and I

prefer personal contact) in adopting Internet banking (results of a preliminary study, 100

respondents), the most important factors discouraging the use of Internet banking are lack of

Internet access and not having a chance to try out Internet banking in a safe environment. Finally

the research indicates that banking activities alone may not be sufficient in achieving growth if

general infrastructure, economic environment and government initiatives are not supportive. The

aim of the study was to collect South African data in order to test out the hypotheses regarding the

21
factors, which affect adoption of Internet banking and compare these results with those collected

in other countries. O nline questionnaire was used to collect empirical data and the results of

the study shows that intention to adopt Internet banking can be predicted by attitudinal

factors, perceived behavioral control factors to a lesser degree, and not by subjective

norms. All attitudinal factors except banking needs are found to be significant, with

complexit y and risk showing a negative relations hip.

Jannatul (2009) in his study of e- banking & customer satisfaction which focus on understanding

the impact of variables of e- banking, on customer satisfaction in Bangladesh, five service

quality dimensions namely reliability, responsiveness, assurance, empathy, and tangibles are

established based on the SERVQUAL model and the literature review. These variables are tested

in e- banking to explore the relationship between service quality and the customer satisfaction.

Data were gathered through survey interview by a structured questionnaire with 250 customers.

The study shows that these factors are the core service quality dimensions for customer

satisfaction in e- banking. It also explores that reliability, responsiveness, and assurance have

more contribut io n to satisfy the customers of e- banking in Bangladesh.

In general, most of e- banking related studies are too remote for our cases and even the study of

Assefa (2013) which is found to be similar to the present topic were done in qualitative approach

also ignores state owned e- banking customers. Thus to address the current gap in the literature,

methodology and question of representativeness this study is designed to examine the impact of e-

banking on the satisfaction of customers in two Private Banks and one public bank in Addis

Ababa.

22
 CHAPTER THREE

3. RESEARCH DESIGN AND METHODOLOGY

3.1. Research P urpo se

The main objective of this study was to find the electronic banking service dimensions that have

the impact on customer satisfaction in two private banks and one state owned bank in Addis

Ababa area. The study adopted an explanatory research because it is suitable to explain the

relationship between variables as quoted in Mark, Philip & Adrian (2009). In addition to

explanatory research, descriptive studies were also used to describe the characteristics of the

sample by using means and percentages.

3.2. Research Metho dol ogy

To gain a reach understanding of the major impacts of e- banking on the level of customer’s

satisfaction under different contexts (public and private commercial banks) the case study

research methodology was conducted for this study. Moreover, as (Mark, Philip, & Adrian, 2009)

stated, case study methodology is most often used in explanatory and exploratory research. For

this reasons the case study was selected.

3.3. Data Col l ection Techni ques and Methods of Anal ysi s

The study used two data collection techniques. The techniques were a five- point Likert- scale

questionnaire, which was quantitatively analyzed using multiple linear regression model and

semi- structured interview, which was qualitatively analyzed and triangulated with the quantitative

result. Therefore, the study employed both quantitative and qualitative approach. The researcher

found that using multiple methods is better to answer the research questions and the extent to

which the findings can be trusted. Tashakkori & Teddlie (2003) cited in Mark, Philip, & Adrian

(2009) argues that multiple methods are useful for providing better opportunities to answer

23
research questions. It also allows to the research findings can be trusted and inferences made from

them.

3.4. Data Source

The study is mainly based on the primary data source. A questionnaire was distributed to

respondent who have been using e- banking to the maximum of three years in the selected banks.

This usage period is planed if users of e- banking enjoy the service for a long time from any bank

they may be biased to their current banks. Moreover, most commercial banks in Ethiopia

introduced mobile banking & internet banking lately after 2011. The questionnaire was designed

based on previous empirical literature and its consistency was pre- tested using Cronbach Alpha.

The components of e- banking and outcomes of customer satisfaction items were measured on 5-

point Likert- scale ranging from 1 (strongly disagree) to 5 (strongly agree). The research

respondents were asked to indicate the degree of agreement or disagreement on e- banking service

quality offered by their banks. Some demographic questions were also forwarded. Every

questionnaire is personally handed and instructions were given to each customer before

completing the questionnaire. Furthermore, for the purpose of triangulation, semi structured

interview was conducted to all Customer Service Managers of the selected four branches.

3.5. P o pul ati o n and Sampl e

The population of this study was active e- banking customers of the three selected commercial

banks who have been using the service from 0 to 3 years. Accordingly, the total study population

was 954,000 as of September 23, 2014 in the three banks. Sample size of 100 respondents is taken

from each selected bank who has been using at list one of the e- banking types. To calculate

sample size, simplif ied formula provided by Taro Yamane (1967) is used i.e.

n = ___N ____
1+ N (e) 2

24
Where, n = number of sample size,

N = Total number of study populatio n,

e = level of confidence to have in the data or degree of freedom which is 90% for this

study.

Therefore, number of suitable size of respondents’ of each bank were decided using the above

formula as depicted in table 3.1.

Table 3.1: Population and Sample Size Determinat io n

Banks Active No. of E-Banking Users Sample size
CBE 556,000 100
DB 270,000 100
WB 128,000 100
Total 954,000 300
Source: Annual Reports 2013/14 of each Bank.

The population is geographically disbursed and also the researcher needs face- to- face contact with

every respondent to guide them during completing the questionnaires. Therefore, multi- stage

sampling technique was used to select the sample. First, simple random sampling to select

branches and second, purposive sampling to select the actual cases were used. As Mark, Philip, &

Adrian (2009) argue, multi- stage sampling is normally used to overcome problems associated

with a geographica ll y dispersed populatio n when face- to- face contact is needed.

Accordingly, the geographic area (Addis Ababa) was split into four sub areas (districts) which

include north, south, east and west district. One branch from each district were selected using

simple random sampling that means a total of 4 branches from each bank were consisted. Finally,

25 actual cases (e- banking users) were selected from the four branches of each bank using

purposive sampling. Table 3.2 portrayed this result:

25
Table 3.2: Actual N umber of Cases and Corresponding Sampled Branches
CBE DB WBE

Districts* Branch Branch Branch

Cases Cases Cases
N ame N ame Name

North A.A Arat Kilo 25 Piassa 25 Sebara Babur 25

South A.A Lideta 25 Kera 25 Lafto 25

East A.A Airport 25 Bole 25 Gerji 25

West A.A Paulos 25 Tana 25 Merkato 25

Total 100 100 100

*District classification is taken from CBE

3.6. Research Mo del

The aim of this study is to examine the impact of seven e- banking quality dimensions on customer

satisfaction by the banks. The researcher employed the MLR regression model to determine the

significa nce level of the variables for the customer satisfact io n in e- banking.

Customer satisfact io n in e- banking = f (electronic banking service qualit y).

Basically, CSEB = α + β1 X1 + β2 X2 + β3 X3 + β4 X4 + β5 X5 + β6 X6 + β7 X7 + ε

Where, CSEB = Customer Satisfact io n in E- Banking

X1 = Reliabil it y

X2 = Transaction effic ie nc y

X3 = Customer Support

X4 = Service Security

X5 = Ease of Use

X6 = Performance

X7 = Service Content

26
Here α is constant and β is coefficient of estimate and ε is the error term. Customer satisfaction in

e- banking is dependent variable and X1 to X7 are independent variables.

The seven service quality dimensions namely reliability, transaction efficiency, customer support,

service security, ease of use, performance, service content have been established based on

literature review and an exhaustive list of 27 items was also identified.

27
 CHAPTER FOUR

4. RESULT AND DISCUSSION

A total of 300 questionnaires were personally handed to the respondents with close follow

up and guide in filling the questioners. All respondents completed the questionnaires in suitable

form. Several questions were asked related to the E- banking service and their satisfaction level to

the E- banking customers of the selected three commercia l banks in Addis Ababa.

The basic assumptions are that e- banking service quality dimensions namely (reliability,

transaction efficiency, customer support, service security, ease of use, performance, service

content) influence customer satisfaction. A multiple regression modeling approach was proposed

as an effective method for studying the relationships. The result of this multiple regression model

is analyzed and discussed in this chapter.

The statistical analysis of this study was done by SPSS software, version 20. And the results of

the study were shown in inference and descriptive section. In deceptive section, tables, charts and

statistics and in inference section, the result of mult ip le liner regression was analyzed.

To estimate the reliability of the questionnaire a pilot sample of 30 people, 10 from each bank,

were selected and Cronbach Alpha was computed by SPSS software. Table 4.1 shows both the

total and the pilot sample test result of reliabilit y in the questionna ire.

Table 4.1: Cronbach Alpha Coeffic ie nt for each Variable

Crronbach Alpha
Items
10% Pilot Sample Total Sample
Reliabil it y 0.797 0.986
Transactio n efficie nc y 0.779 0.983
Customer support 0.686 0.926
Service security 0.784 0.841
Ease of use 0.720 0.919
Performance 0.553 0.895
Service content 0.669 0.935
Source: SPSS output

28
All the items in the case of total sample have Cronbach Alpha values of greater than 80% it

showed that the high reliabilit y of the questionna ire.

4.1. Descri pti ve F i ndi ng s

4.1.1. D e mographic Profile

The demographic profile of the customers can be seen in Table 4.2.

Table 4.2: Demographic Profile of E- banking Customers

N o. Demographics Frequency Percentage
1. Age (Years) 18- 24 68 22.7
25- 35 217 72.3
36- 50 15 5.0
2. Marital Status Single 280 93.3
Married 20 6.7
3. Educational Primary 10 3.3
Levels TVET 70 23.3
Degree 220 73.3
4. Employment Student 12 4.0
Status Salaried 268 89.3
Business Person 20 6.7
Total 300 100

The questionnaire included a segment on customer’s profile, as an assortment of demographic and

other factors were likely to influence the degree of customer satisfaction with respect to the e-

banking service offered by the selected banks.

As can be seen from Table 4.2, the sample customers were mostly in the age group of 25- 35 years

(72.3%). It is also evident from the table that 22.7% of the respondents were youngsters

(between 18 and 24 years). There were no respondents whose age were 51 and above. Majority

of the respondents were unmarried (93.3%), while 6.7% were married. The respondents were

predominantly degree holders (73.3%) and TVET (23.3%). There were no respondents who were

29
less than primary education level. This implies that the respondents had high literacy levels. As

far as occupation is concerned, the respondents were a mix of salaried (89.3), business person

(6.7) and students (4%) and there were no respondents from pensioner and unemployed category

in the sample respondents under considerat io n.

4.1.2. M e an and Standard De viation

Descriptive statistics (mean and standard deviations) of the respondent scores were computed.

Analysis has been done by comparing these mean scores and deviations among respondents. The

reason for using descriptive statistics is to compare the different factors that affect the level of

customer satisfaction of the selected commercial banks by using the means and standard

deviations values. In table 4.3 the respondents perception on the satisfaction of e- banking service

offered by their banks and ranking was done on each variable.

Table 4.3 shows the mean value depicting the overall customer’s satisfaction. As far as this

descriptive statistics is concerned, customer’s satisfaction on e–banking is above satisfactory level

with a mean value of 3.30 on a 5 point Likert scale.

Table 4.3: Mean & Standard Deviatio n

No. of items N Mean Std.
Deviatio n
Reliabil it y 3 300 3.43 1.480
Transactio n Effic ie nc y 2 300 3.86 1.267
Customer support 5 300 3.35 1.148
Service security 6 300 3.76 0.696
Ease of use 5 300 3.61 0.728
Performance 3 300 2.71 0.743
Service content 3 300 3.29 0.849
E- banking service quality (EBSQ) 7 300 3.43 0.806
Overall customer satisfact io n (CSEB) 1 300 3.30 1.061
Source: SP SS regression results

30
The standard deviation 1.061 indicates that there was moderate variability in overall customer

satisfaction in the data. The table also suggests that all service quality dimensions except

performance rated as above satisfactory. As far as the mean values are concerned, out of the e-

banking service quality dimensions transaction efficiency (mean of 3.86), service security (mean

of 3.76) and ease of use (mean of 3.61) have relatively major roles on e- banking service quality

and in turn overall e- banking customer satisfact io n.

Except performance (mean of 2.71) all explanatory variables play a fundamental role in the

customer satisfaction among CBE, DB, and WB in Addis Ababa. Empirical evidence in this

research also suggests that e- banking factors have a significant degree of influence on customer

satisfaction. This empirical evidence has provided significant support for the electronic banking

literature, which substantively advocates that e- banking factors have an impact on customer

satisfact io n (Hua, 2009;Wise, Victoria & Ali, & Muhammed, 2009).

4.2. Inference F i ndi ngs

4.2.1. Chi-Square Te s t

Here the relationship between demographic characteristics and customer satisfaction on e- banking

had been tested using Chi- Square test. The test statistics was chosen because the variable under

study was categorical. The result of SPSS statistica l package portrayed in table4.4.

Table 4.4 Chi- Square Test for Independence Result

Demographic Character Value Df Sig.(2 sided)

OCCUP 14.137 8 0.078

EDL 125.024 8 0.000

MS 7.575 4 0.108

AGE 40.132 8 0.000

Significa nt at the 0.05 level of precision (2 tailed)

Source: SPSS analysis result

31
It can be observed in table 4.4 that the relationship between customer satisfactions in e- banking

and the demographic variables educational level and age are statistically significant as their p-

value were lower than 0.05. This implies that the relationship between customer satisfaction in e-

banking and demographic variables (educational level and age), except occupation and marital

status, are not due to chance rather it is systematic. In other words the probability associated with

the chi- square statistic of educational level (125.024) is less than 0.01 indicating that there is a

strong relationship between customer satisfaction in e- banking and educational level. Customers

with higher education such as university graduates are more comfortable in using technology, like

the internet and other forms of e- banking. As educational level increases individual's level of IT

literacy increases so they tend to use e- banking and gets more satisfaction. About age, chi- square

value is 40.132 associated with less than 0.01 level of precision indicating age has a strong

relationship with satisfaction in e- banking. To put it best, age and customer satisfaction in e-

banking are definite ly dependent on one another and this is correct at 99% likelihood.

4.2.2. Re gre s s ion Analys is

In this section regression analysis for dimensions of customer satisfaction on e- banking have been

undertaken to understand the relationship between customer satisfaction on e- banking and

explanator y variables.

[Link]. Diagnos is Te s t

Before applying regression analysis, some tests were conducted in order to ensure the

appropriateness of data to assumptio ns regression analysis as follows :

Mul t i col i neari t y Test bet ween St udy Vari abl es

In this section the correlation between customer satisfaction in e- banking and explanatory

variables; reliability, transaction efficiency, customer support, service security, ease of use,

performance, service content have been presented and analyzed. A correlation matrix is used to

ensure the correlatio n between explanator y variables.

32
Table 4.5 Correlation Matrix between Explanator y Variables
X1 X2 X3 X4 X5 X6 X7

X1 1

X2 0.737* * 1

X3 0.695* * 0.119* 1

X4 0.819* * 0.519* * 0.857* * 1

X5 0.469* * 0.692* * 0.042 0.171* * 1

X6 0.617* * 0.846* * 0.152* * 0.409* * 0.889* * 1

X7 0.953* * 0.888* * 0.530* * 0.795* * 0.540* * 0.727* * 1

Source: SPSS output

**Correlation is significa nt at the 0.01 level

*Correlation is significa nt at the 0.05 level

Cooper & Schindler (2009) suggested that a correlation coefficient above 0.8 between

explanatory variables should be corrected for because it is a sign for multicolinearity problem.

Malhotra (2007) argued that the correlation coefficient can be 0.75. Lastly, Hair et al. (2006)

argued that correlation coefficient below 0.9 may not cause serious multicolinary problem. Thus,

service content has been correlation coefficient of 0.953 with reliability at 0.01 level of significant

and correlation coefficient of 0.888 with transaction efficiency at 0.01 level of significant both

greater than 0.8. Performance has also been correlation coefficient 0.846 and 0.889 with

transaction efficiency and ease of use respectively both greater than 0.8 at 0.01 level of

significance. Finally, service security has been correlation coefficient of 0.819 and 0.817 with

reliability and customer support respectively at 0.01 level of significant. Therefore, the variables

service content, performance, and service security were excluded from the regression model to

control mult ico l inea r it y problem.

33
Li neari t y Test

Linearity refers to the degree to which the change in the dependent variable is related to the

change in the independent variables. To determine whether the relationship between the

dependent variable CSEB and the independent variables X1 (reliability), X2 (transaction

efficiency), X3 (customer support), and X5 (ease of use) is linear; plots of the regression residuals

through SPSS software had been used.

Figure 4.1: N ormal Point Plot of Standardized Residual

Source: SPSS output

The scatter plot of residuals shows no large difference in the spread of the residuals as you look

from left to right on figure 4.1. This result suggests the relationship we are trying to predict is

linear.

34
Normal i t y Test

As per the Classical Linear Regression Models assumptions, the error term should be

normally distributed or expected value of the errors terms should be zero (E(ut)= 0).

Figure 4.2: Frequency Distribut io n of Standardized Residual

Source: SPSS output

Figure 4.2 shows the frequency distribution of the standardized residuals compared to a normal

distribution. As you can see, although there are some residuals (e.g., those occurring around 0)

that are relatively far away from the curve, many of the residuals are fairly close. Moreover the

histogram is bell shaped which lead to infer that the residual (disturbance or errors) are normally

distributed. Thus, no violatio ns of the assumption normally distributed error term.

Thus, from an examination of the information presented in all the three tests I conclude that there

are no significant data problems that would lead to say the assumptions of multiple regression

have been seriously violated.

35
[Link]. Corre lation Analys is be twe e n Cus tome r Satis faction in E-banking and

Explanatory Variable s

Table 4.6: Correlation matrix: CSEB

CSEB X1 X2 X3 X5
CSEB 1
X1 0.772** 1
X2 0.739** 0.737** 1
X3 0.379** 0.695** 0.119* 1
X5 0.405** 0.469** 0.692** 0.042 1
Source: SPSS output
**Correlation is significa nt at the 0.01 level
*Correlation is significa nt at the 0.05 level

Reliability and customer satisfaction has highest correlation coefficient which is 0.772 at 0.01

level of significant. This result shows that reliability of commercial banks in service delivery

have significant relationship with the level of satisfaction in e- banking. Transaction efficiency and

customer satisfaction has the second highest correlation coefficient (0.739) next to reliability at

0.01 level of significant. Therefore reliability and transaction efficiency tends to be a better

predictor of satisfaction level on e- banking. Customer support (0.379) and ease of use (0.405)

have also significant correlation with customer satisfaction though their coefficients are relatively

smaller.

[Link]. Re gre s s ion Analys is be twe e n Cus tome r Satis faction on E-Banking and Explanatory
Variable s

The overall regression model and its ANOVA are summar ized as follows :
Table 4.7: Model Summery
Model R R Square Adjusted R Square Std. Error of the Estimate
1 0.821 0.674 0.669 0.610
a. Predictors: (Constant), X5 , X3 , X2 , X1

36
R- squared is measured the goodness of fit of the explanatory variables in explaining the variations

in customers satisfaction measures of explanatory variables (reliability, transaction efficiency,

customer support and ease of use). As clearly described in Table 4.7 adjusted R- square value for

the regression model was 0.669. This indicates the explanatory variables; reliability, transaction

efficiency, customer support and ease of use in this study explain about 67 percent of the

variation in the level of customer satisfaction. The remaining 33 percent of the variation in the

level of customer satisfaction of CBE, DB, and WB are explained by other variables which are

not included in the model. Therefore, e- banking service dimensions (reliability, transaction

efficiency, customer support and ease of use) are good explanatory variables of the satisfaction

level of both public and private commercia l banks in Ethiopia.

Table 4.8: ANOVA

Model Sum of Squares Df Mean Square F Sig.

Regression 226.839 4 56.710 152.422 .000

1 Residual 109.757 295 .372

Total 336.597 299

a. Dependent Variable : CSEB

b. Predictors: (Constant), X5 , X3 , X2 , X1

From the ANOVA test in table 4.8 it shows the table Sig. value 0.01 is greater than the calculated

Sig. value 0.000. It reflects there was a statistically significant correlation between dependent

variable and independent variables at 1% significant level. Which means the explanatory

variables; reliability, transaction efficiency, customer support and ease of use have great

contribution to improve e- banking customer satisfaction level among Commercial Banks of

Ethiopia, Dashen Bank and Wegagen Bank. But it does not mean that all these factors of e-

banking service quality have equally significant correlation with customer satisfaction level. The

37
results of the multiple linear regression analysis signal that there is variation in the effect of e-

banking service quality dimens io ns on customer satisfact io n.

Beside the F statistics (152.422) which is used to measure the overall test of significance of the

model was presented, and null hypothesis can be clearly rejected since the p- value is 0.000 which

is suffic ie nt l y low, the model is well fitted at 1 percent level of signif ica nce.

Table 4.9: Regression Coefficie nt Analys is of the Model

Model Unstandardized Standardized T Sig.
Coefficie nts Coefficie nts
B Std. Error Beta
(Constant) 1.497 .268 5.581 .000
X1 .394 .083 .549 4.734 .000
1 X2 .380 .077 .454 4.928 .000
X3 - .046 .073 - .050 - .637 .525
X5 .239 .067 .164 3.548 .000
a. Dependent Variable : CSEB

From the above find ing we can develop the following regression model

CSEB = 1.497 + 0.549X1 + 0.454X2 + 0.164X5

Std. Err (0.268) (0.083) (0.007) (0.067)

T values (5.581)* (4.734)* (4.928)* (3.548)*

R square (Adj.) = 0.669, F = 152.422

*= Significa nt at 99% level

Where, CSEB = customer satisfact io n on E- Banking

X1 = Reliabil it y

X2 = Transactio n Effic ie nc y

X3 = Customer Support

X5 = Ease of Use

38
Coefficient analysis shows the relationship between dependent variable and independent

variables. According to Sig. value of X1 (reliability), X2 (transaction efficiency) and X5 (ease of

use) are statistically significant at 1 percent significant level in agreement with the hypothesis.

Which means; reliability, transaction efficiency and ease of use have great contribution to

improve customer satisfaction on e- banking. Whereas the sig. value of X5 (ease of use) is greater

than 0.05 and conclude that the variable has no significant impact on customer satisfaction from

using e- banking.

Here, X1 (reliability) = 0.549 i.e., 100% change in reliability leads to 54.9% change in customer

satisfaction level. X2 (transaction efficiency) = 0.454 i.e., 100% change in transaction efficiency

leads to 45.4% change in customer satisfaction level. X5 (ease of use) = 0.164 i.e., 100% change

in ease of use leads to 16.4% change in customer satisfact io n level.

All explanatory variables have a positive relationship with customer satisfaction except X3

(customer support), low coefficient of - 0.05 shows that customer support has weak impact on

e- banking customer satisfaction of commercial banks. A positive coefficient of reliability (0.549)

implies that an increase in reliability leads to increase customer satisfaction. Transaction

efficiency has a positive coefficient of 0.454; this means transaction efficiency leads to better

satisfaction of customers on e- banking. Similarly, ease of use has a positive coefficient of 0.164.

This means any increase in this variable leads to increase in customer satisfaction of commercial

banks in Ethiopia.

These findings provide significant support for the reliability, transaction efficiency and ease of

use literature which advocates that the variables have an influence upon customer satisfaction in

Ethiopian commercial banks. The findings are also consistent with other research findings for

example (Jun et al, 1999; Jannatul, 2009; Parsurman et al, 1988; Yang, Jun and Peterson, 2004,

Lui & Amett, 2000) found that reliability provide higher degree of satisfaction on e- banking.

39
Storback cited in (Thahkur, 2011) also empericaly found that e- banking transiaction efficiency

and customer satisfaction have positive relationship. Parasurman et al, 1988, (Yang, Jun and

Peterson, 2004), (Lui & Amett, 2000), (Storback et al, 1994) cited in (Thahkur, 2011) found ease

of use and satisfact io n as critical factors on the use of e- banking.

4.3. Intervi ew Respo nses

Interview was forwarded for the three banks Customer Service Supervisors (for some branches

Marketing O fficers and other nearly related staff members had been participated in the interview

instead of Customer Service Supervisors) concerning age, gender, occupational, marital status

and others are presented here to triangulat e with customers responses.

Currently CBE offers Automated Teller Machine (ATM), Mobile Banking, Point of Sales (POS)

terminals, and internet banking but most of the users of E- banking are E- card users, says

Communication Manager at the CBE. It started out e- banking service with eight ATM machines,

11 years ago, and now has 300. There are also an additional 158 under deployment and 200 in the

process of procurement. With respect to age, gender, marital status, occupation and educational

status of the customers he responds, it is difficult to put in figure but from observation one can

conclude the youngster salaried and literate people are majority of the users of e- banking. The

bank provide e- banking service both for saving account and checking account but loan accounts

have no such services yet. Customers will expect their banks to be responsive to their needs over

e- banking therefore we are seeking to address these needs and increase their level of satisfaction.

So fare most of our customers are satisfied with the e- banking service. However, despite the

bank’s effort to improve access for its customers by delivering such services, it is well aware of

some problems are encountered by clients which makes them dissatisfied such as network failure,

due to service breakdown from the country’s sole telecommunications service provider, ethio-

telecom, and internal network problems, are the challenges faced by the CBE attributed to the

40
dissatisfaction of customers. While the majority of the complaints are laid at the feet of ethio-

telecom, lack of knowledge from customers end have also a share for the problem of brake dawn

in ATM service. Inappropriate use of ATMs and cards such as inserting card upside down into the

ATM’s card slot, forgetting password which leads to the machine to capture card, transferring

cards to a third party are among the problems by customers themselves.

Managers of the selected branches in Dashen Bank responds, though we are providing E- banking

services including debit card, mobile banking, internet banking and POS the majority of e-

banking customers are users of debit card. Accordingly, to satisfy this demand the bank now days

reached its ATM machine network at 130, since the introduction of the service in May 2006.

Moreover it has bought 40 additional ATMs that are capable of receiving deposits. Concerning

account type ordinary saving account holders are the main users and they are not providing e-

banking service for time deposit, over draft account holders and loan account holders. In

relation to age, gender, occupational, marital status and others the bank has no official statistics

however it is estimated that youngers ranging from 18 to 35 are majority of e- banking users and

the bank guessed that 90% of e- banking customers are graduates. In occupational category since

most government and private organizations channeling salaries of their employees through the

banks salaried takes the lion share of e- banking customers. Most of the problems reported from

our clients; frequent service interruption is the main which makes them to lose their trust on the

service. The bank work around the challenge to minimize this problem by providing phone

support to clients who experience service interruption, so users can get direct assistance. In

addition, there is a standby team equipped with a car that can be dispatched to any location where

a customer faces an inconvenience. That is why last year (2013) 2.5 billion Br in transactions

were handled through our ATMs only. All these evidenced that somewhat our customers are

satisfied by the service we offer. We strongly believe that the technology has given more

satisfaction and reduced the visit of branch now and then as customer gets it 24 hours per day and

41
7 days a week, standardized service, and quicker. But due to various reasons, mostly ethio

telecom’s network failure, customers have faced tragedy because we couldn’t deliver the service

as exactly as we promise.

Wegagen Bank replied that, we are putting a lead in introducing the state- of- art technology as far

as the core banking application is concerned. This centralized banking solution creates conducive

environment to introduce e- banking services. Thus, the bank has availed payment card, POS

terminals, mobile banking and internet banking. Currently majority of the users are saving

account holders but in the future they expect that current account holders (business owners)

would be increased if the bank increase limit on one time withdrawal and fund transfer

through mobile banking and internet banking which is now only Birr 5000. Despite the Bank’s

effort to improve access for its customers by expanding this technology, it is well aware of that

such technology demands furnished infrastructure in order to sustain a reliable service. From the

oral feedback of customers, they routinely complain about frequent problems during transactions.

This is mainly because network failure from ethio- telecom, power interruption and low level of

basic ICT literacy. To resolve such service interruptions besides working with ethio- telecom, WB

uses a wireless EV- DO internet connection, instead of the broadband cable internet to avoid

temporary disruptions due to network failure. These may need manual intervention by the Bank’s

technic ia ns and the Bank has a standby team to deal with these issues.

42
 CHAPTER FIVE

5. CONCLUSION AND RECOMMENDATION

5.1. Co ncl usi on

Customer satisfaction is the major factor contributing to the success of service sector. E- banking

has become a major facility sought after by the existing and potential customers. All the service

sectors depend on customer and their satisfaction and the banks are no exception. One of the ways

for achieving high customer satisfaction and gaining the loyalty of customers is for banks to offer

high qualit y services.

In this research the level of satisfaction of customers with the different quality dimensions

pertaining to the theoretical model was evaluated. Accordingly, the major findings are presented

as follows :

Descriptive analysis results revealed that the majority of current e- banking users are

youth between the age of 18 up to 35, occupationally salaried are the majority

users and business men/women are not active participant in using the service,

educational wise the respondents were predominantly degree holders and TVET.

Customer’s satisfaction on E–Banking is above satisfactory level with a mean value of

3.30 on a 5 point Likert scale. Out of the e- banking service quality dimensions transaction

efficiency (mean of 3.86), service security (mean of 3.76) and ease of use (mean of 3.61)

are the majors to improve e- banking service quality and in turn overall customer

satisfact io n.

Reliability, transaction efficiency and ease of use have a positive relationship with

customer satisfact io n in agreement with the hypothesis.

43
 Any increase in reliability, transaction efficiency, and ease of use leads to increase in

customer satisfaction by 54.9%, 45.4%, 16.4% respectively. These results are significant

at 1% level of precision.

O ut of the demographic variables under investigation educational level and age have

statistically significant relationship with satisfaction in e- banking. In other words customer

satisfaction in e- banking definitely dependent on one another with age and educational

level at 0.01 level of precision.

Both public and private commercial bank e- banking customers suffer from frequent

disruption of e- banking services due to poorly developed telecommunication

infrastr uc t ure, lack of reliable power supply, and lack of knowledge from customers end.

5.2. Recommendati o n

The analysis of this work includes implications for both private and public banks as far as

the satisfaction level of their customers with different aspects of the e- banking services is

concerned. Therefore, based on the study results I would like to forward the following

recommendat io ns for the concerned bodies.

Banks should work much in increasing the number of users from all aspects that is from

age, educational status, occupationally and should do great job in making- business

men/wome n to be the users of e- banking.

As reliability, service content, and transaction efficiency dimensions are highly significant

impacts on the level of satisfaction, banks whether they are private sector bank or public

sector bank better to focus on this dimensions to bring higher level of satisfaction to their

customers.

44
 Commercial banks should give additional emphasis to reliability and transaction efficiency

to increase the satisfact io n level of e- banking customers.

Commercial banks should work with ethio- telecom & Ethiopian Electric Power to resolve

service interrupt io ns and minimi ze the brunt of the consequences of unreliab le services.

Such technology demands well developed ICT infrastructures therefore the respected

governme nt bodies should work to develop and expand ICT infrastr uc t ure s.

Banks need to increase the confidence of their customers as well as develop their skills

and knowledge in using e- banking services. They could also employ the use of video

presentations at bank branches and on television to showcase the user friendliness of such

services. This will help customers to be more familia r with the e- banking services.

At last, this study investigates the dimensions of e- banking service quality that has major impacts

on customer satisfaction both in private and public commercial banks in Ethiopia. But, the

variables included in the study were not exhaustive. Future researchers could include other

variables which are not included under this study.

45
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APPENDIX

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APPENDIX

Appendi x-A Questi onnai re for Customers

Addi s Ababa Uni versi ty F acul ty of B usi ness and Econo mi cs
Devel opment Management: P ost G raduate P ro gram

This questionnaire is designed specifically to carry out a research on the impacts of E- Banking on
customer satisfaction in the banking service in Addis Ababa city specifically and its main
purposes are: to find the electronic banking service dimensions that have the impact on customer
satisfaction among two privet banks and one public bank: Dashen Bank, Wegagen Bank and
Commercial Bank of Ethiopia and as partial fulfillment of the requirements for the degree in
Master of Developme nt Management.

Here I kindly request you to attempt all the questions in the questionnaire to meet the aim
of the study. Whatever information is provided will be treated with utmost confidentiality
and strictly will be used for academic purpose only. There is no need to write your name.

I thank you in advance

SintayehuYitb arek
Tell: 0911943481
Email: seey_2005@[Link]

If you have any question with regard to the questionnaire please contact me using the above
mentioned address.
Part I
B ack g ro und Info rmatio n
Please put right mark (? ) in front of your choice box that express yourself

□
1. Gender: Male Female □
2. Age: 18- 24□ 25- 35□ 36- 50□ 51- 60□ Above 60 □
3. Marital status: Single □ Married□ Separated □ Divorced □ □
Widowed
4. Current education level

□
Illite rate Primary□ High school□ TVET □ □
Univers it y degree

Master Degree □ Doctorate Degree □ Above Doctorate Degree □

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5. O ccupation: Unemplo yed □ Student□ Salaried □ Business man/woma n □
Pensioner □ Other □
6. Which type of customer you are with the bank?

Depositor □ Borrower □ Both depositor& borrower □ other service seeker □

7. If you are depositor, which type of account do you mainta in with the bank?

Checking Account □ Saving Account □

8. Which type of electronic banking service delivery do you use?

ATM □ PO S □ Mobile banking □ Internet banking□

9. How satisfied are you with the e- banking service provided by your bank?

Very Dissatisfied□ Somewhat Dissatisfied □ Neither Satisfied nor Dissatisfied □

Somewhat Satisfied□ Very Satisfied □
Part II
Cus tome r Fe e lings about Ele ctronic Banking

Please put right mark (? ) for response of your feeling about the question provided

Undecided
Disa g ree
disa g ree
Stro ng ly

Stro ng ly
No

Ag r e e

Ag r e e
Dimensions
.

1 2 3 4 5
1 . Relia bility
1.1 E-banking completes a task accurately
1.2 E-banking deliver the service exactly as promise
1.3 E-banking perform the service right at the first time
2 . Tra nsa ctions efficiency
2.1 E-banking provide complete help function
2.2 Transaction process is fast
3 . Customer sup p ort
3.1 E-banking contains enough services
3.2 Case of problem happen, can contact staff immediately
E-banking contains responsible section to guide for common
3.3
problem
3.4 E-banking provide knowledgeable staff to solve problem

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 3.5 Staff can describe step to use and condition to use clearly
4 . Service security
4.1 E-banking keep accurate record of transaction
4.2 E-banking provide security for transaction data and privacy
4.3 No problem during using E-banking service
4.4 E-banking is secure
4.5 Feel safe when using E-banking
4.6 Can check validity and detail of past transaction every time
5 . Ea se of use
5.1 Easy to find information in the E-banking system
5.2 E-banking is easy to use
5.3 The language in e-banking displays is easy to understand.
5.4 Information and text are clear and easy to understand
5.5 E-banking system provides clear instruction.
6 . Performa nce
6.1 E-banking is provided in multi-language
6.2 E-banking provide 24 hours -7 days service
6.3 E-banking allow to transfer between the same banks
7 . Service content
7.1 E-banking provides information that exactly fits needs.
7.2 E-banking provides accurate information.
7.3 E-banking provides information that trust.
*E-Banking refers to variety of platforms such as card banking, mobile phone banking, and internet banking
whereby customers access banking services like transfer funds, performing balance checks, pay bills, view
record of transactions, check interest in accounts, send money overseas, etc.

Appendi x B -Intervi ew questi ons for Custo mer Servi ce Managers

Q1. When we see the current users of e- banking what can one say about age, gender,
marital status, occupation and educationa l status of the customers?
Q2. For which types of account holders the bank is providing e- banking service?
Q3. What are the types of e- banking deliver y channels your bank is providing?
Q4. Does t he ba nk t hink e- bak ing has give n sa t is fact io n to t he use rs o f t he ser vice?
Q5. Do you think e- banking is providing the service as expected and available 24/7for
customers?
Q6. What can you say about the service qualit y of e- banking offered by the bank?
Q7. What are the major problems in e- banking activit ie s to satisfy your customers?

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 Appe ndix C- Conce ptual frame work of the re s e arch

Transaction
Customer efficiency Reliability
support

Service Service
security content
E-Banking
Service
Quality
Performance Ease of use

Customer
Satisfaction

57
 De claration
I, the undersigned, declare that this thesis is my original work and has not been presented for a
degree in any other university, and that all source of materials used for the thesis have been duly
acknowledged.

Sintayehu Yitbarek Tefera

______________________________
February 2015

Confirmation
This thesis can be submitted for examina t io n with my approval as a univers it y advisor.

______________________________
.Degef Duressa (PhD)
February 2015
.

58