Journal of Management Information System & E-commerce

Factors Affecting Adoption of Electronic Banking System in Ethiopian Banking Industry
Ayana Gemechu Bultum

Abstract
The aim of this paper is 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-organizationenvironment 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 competition.

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