Factors affecting bank customers usage of electronic banking in Ethiopia: Application of structural equation modeling (SEM)

Abstract

Electronic banking services have not been widely used by most bank customers in Ethiopia; most bank customers continue to conduct most of their banking transactions using traditional methods. Therefore, the main objective of this study is to identify factors that affect customers’ usage of electronic banking services. The type of research applied in this study is explanatory in nature. A research model was developed by integrating the constructs of Technology Acceptance Model (TAM) and Theory of Planned Behavior (TPB). A total of 420 actual users of e-banking services were used as a sample. A well-structured questionnaire was used to collect the relevant information. The data analyzed using Structural Equation Modeling revealed that perceived usefulness, perceived ease of use, attitude towards e-banking, perceived behavioral control, subjective norms, behavioral intention, awareness as well as the availability of internet/network connection have a significant positive impact on users e-banking usage practice. However, perceived risk has a significant negative impact. These findings suggest that banks in Ethiopia should create awareness to their customers with regard to the usage and benefits of e-banking service delivery channels.

Keywords:

• E-banking
• technology acceptance model (TAM)
• theory of planned behavior (TPB) and structural equation modeling (SEM)

PUBLIC INTEREST STATEMENT

The adoption of e-banking services by bank customers is in an infant stage in Ethiopia. Therefore, this study is intended to identify the factors that affect the adoption of this service delivery channel from bank customers’ perspective in Ethiopia. Thus, this study will help both banks and customers to benefit from the adoption of this technology. It will also give direction for policymakers to improve the infrastructures required for the effective adoption of e-banking services in the banking industry. Once the potential influential factors are identified and appropriate solutions are taken by banks, customers will be benefited from their adoption of the technology. Further, it helps to fill significant knowledge gaps about e-banking landscape in Ethiopia; thereby it will give insight to researchers and students about the problems and stimulate further investigation of the issue.

Additional information

Funding

The author received no direct funding for this research.

Notes on contributors

Beza Muche Teka

This is to inform you that the manuscript entitled as Factors Affecting Bank Customers Usage of Electronic Banking in Ethiopia: Application of Structural Equation Modeling (SEM) is my own research work. Currently I am working as an assistant professor under the department of accounting and finance, Debremarkos University, Ethiopia. I have more than 13 years teaching and research experience. I have six (6) published research outputs in different international journals. The adoption of e-banking services by bank customers is in an infant stage in Ethiopia. Therefore, the identification of influential factors will help both banks and customers to benefit from the adoption of this technology. It will also give direction for policy makers to improve the infrastructures required for the effective adoption of e-banking services in the banking industry. Further, it helps to fill significant knowledge gaps about e-banking landscape in Ethiopia; thereby it will give insight to researchers and students about the problems and stimulate further investigation of the issue.