DEBRE MARKOS UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

ASSESSMENT OF ELECTRONIC BANKING SYSTEM (IN CASE OF

DASHEN BANK DEBRE MARKOS BRANCH)

A SENIOR ESSAY SUBMITTED TO DEPARTMENT OF ACCOUNTING

AND FINANCE FOR THE REQUIRMENT OF IN PARTIAL
FULLFILMENT OF BA DEGREE IN ACCOUNTING AND FINANCE

PREPARED BY: MINALE ABU

ADVISOR: DESALEGN MARU
 JUNE , 2016
DEBRE MARKOS,
ETHIPIA

ABSTRACT
The paper stud's about assessment of e-banking system in Dashen Bank Debre Markos branch
as a case study. The objective of the study was to assess the development of e-banking in Dashen
Bank and identify the determinants of the e- banking service and suggest recommendation based
on the study findings. The study used only primary data. The primary data was collected using
questionnaires distributed to the selected employees and customers of the bank. Based on the
major findings of the study, there is a risk management capacity of the bank associated with e-
banking like operational risk, strategic risk and business risk. There is an obstacle in e-banking
system and the operation has lack of awareness. So, it is recommended that the Bank should
improve awareness of the customer about e-banking and the bank also should have a suitable
business continuity plan to avoid the risk of e-banking.

Key
words: E-banking, Dashen bank, Debre Markos
 AKNOWLEDGEMENT

First of all, I would like to thanks Almighty God and his mother Saint Mary.
Secondly, I would like to express my heartfelt appreciation and gratitude to advisor Desalegn
Maru for his great advice and constructive criticisms from the beginning up to the end of the
paper. Then I would like to extend my great thanks to my family, who have been the reason for
my success.
Finally, I need to say thanks to employees and customers of Dashen bank of Ethiopia, Debre
Markos branch who give me available information and to all my friends for their moral support
and be with me.
TABLE OF CONTEENTS
PAGE
ABSTRACT ----------------------------------------------------------------------
AKNOWLEDGEMENT--------------------------------------------------------
ACRONYM------------------------------------------------------------------------
CHAPTER ONE
1. INTRODUCTION
1.1 Background of the study -----------------------------------------------------
1.2 Statement of the problem -----------------------------------------------------
1.3 Research question--------------------------------------------------------------
1.4 Objectives of the study --------------------------------------------------------
1.4.1 General objectives --------------------------------------------------------- -
1.4.2 Specific objectives ---------------------------------------------------------
1.5 Limitation of the study --------------------------------------------------------
1.6 Scope of the study -------------------------------------------------------------
1.7 Significance of the stud ------------------------------------------------------
1.8 Organization of the paper ----------------------------------------------------
CHAPTER TWO
LITERATURE RIVIEW
2.1 Meaning of e-banking ---------------------------------------------------------
2.1.1 History of e-banking --------------------------------------------------------
2.1.2 E-commerce ------------------------------------------------------------------
2.1.3 Types of e-commerce -------------------------------------------------------
2.1.4 Advance of e-commerce ------------------------------------------------
2.1.5 Electronic capacity ---------------------------------------------------------
2.1.6 General trends e-banking evaluation -------------------------------------
2.1.7 Types of e-banking service and products -----------------------------
2.2 Customers attitude ---------------------------------------------------------
2.3 Capacity of existing bank ---------------------------------------------
2.4 Risk management of bank ---------------------------------------------
2.5 Benefits of e-banking --------------------------------------------------
2.6 Risk of e-banking ------------------------------------------------------
2.6.1 Strategic risk --------------------------------------------------------------
2.6.2 Credit risk -----------------------------------------------------------------
2.6.3 Liquidity risk /Interest rate risk -----------------------------------------
2.6.4 Compliance / Legal risk --------------------------------------------
2.6.5 Transactional /Operational risk -----------------------------------
2.6.6 Reputation/ Total reliability risk ----------------------------------
CHAPTER THREE
RESEARCH METHODS
3.1 Research design -----------------------------------------------------------
3.2 Sources of data ------------------------------------------------------------
3.3 Methods of data collection -----------------------------------------
3.4 Sampling technique ---------------------------------------------------
3.5 Sample size -----------------------------------------------------------
3.6 Data analysis and presentation ------------------------------------
CHAPTER FOUR
DATA ANALAYSIS AND PRESENTATION -------------------------------
CHAPTER FIVE
CONCLUSION AND RECOMMENDATION -----------------------------
5.1. Conclusions -----------------------------------------------------------------
5.2. Recommendations ---------------------------------------------------------
Reference ------------------------------------------------------------------------
Appendix -----------------------------------------------------------------------

LIST OF TABLES

PAGE
Table 4.1.1. Sex of employees -----------------------------------------------------
Table 4.1.2. Age of employees -----------------------------------------------------
Table 4.1.3. Level of education ---------------------------------------------------
Table 4.1.4. Income of employees -------------------------------------------------
Table 4.1.5. Service year of employees -------------------------------------------
Table 4.1.6. E-banking services ---------------------------------------------------
Table 4.1.7. Using e-banking reduces costs -------------------------------------
Table 4.1.8. Expansion of ATM --------------------------------------------------
Table 4.1.9. Technological & Infrastructural requirement ---------------------
Table 4.1.10. No of customers ------------------------------------------------------
Table 4.1.11. Obstacles of e-banking ----------------------------------------------
Table 4.1.12. Importance of e- banking ---------------------------------------------
Table 4.2.1. Sex of customers --------------------------------------------------------
Table 4.2.2 Age of customers --------------------------------------------------------
Table 4.2.3. Income of customers ---------------------------------------------------
Table 4.2.4. Expansion of e-banking -----------------------------------------------
Table 4.2.5. Types of e-banking -----------------------------------------------------
Table 4.2.6. Knowledge and Information ------------------------------------------
Table 4.2.7. Risk of e-banking ------------------------------------------------------
Table 4.2.8. Capacity of the bank --------------------------------------------------
Table 4.2.9.Access to use money --------------------------------------------------
Table 4.2.10. Impact of ATM ------------------------------------------------------
Table 4.2.11. Benefits of e-banking ----------------------------------------------
Table 4.2.12. Problems of ATM --------------------------------------------------

ACRONYMS
ATM: Automatic teller machine
B2B: Business to Business
B2C: Business to Consumer
B2G: Business to Government
C2G: Consumer to Government
IBM: International Business model
IVR: Internet voice response
PC: Personal Computer
PDA: Personal Digital Assistance
 CHAPTER ONE
INTRODUCTION
1.1 Background of the study
Electronic banking means 24-hour access to cash through an automatic teller machine (ATM) or
direct deposit of paychecks into checking or saving accounts. However, electronic banking
involves many different types of transactions, rights and sometimes fees. Electronic banking also
known as electronic funds transfer (EFT); is simply the use of electronic means to transfer funds
directly from one account to another, rather than by check or cash. Electronic funds transfers are
initiated through devices like cards or codes that let you, or those you authorize, access your
account. Many financial institutions use ATM or debit cards and personal identification numbers
(PINS) for this purpose. Some use other types of debit cards that require your signature or a scan.
The federal electronic fund transfer act covers some electronic consumer transactions. Automatic
teller machines (ATMS) also called 24 hours teller is electronic terminals which give consumers
the opportunity to at almost any time. To withdraw cash, make deposit or transfer funds between
accounts, a consumer needs an ATM card and personal identification number. If a fee is charged,
it must be revealed on the terminal screen or on a sign next to the e-banking (Vasu Deva, 2005).
Point of sale transfer terminals:
Allow consumers to pay for retail purchase with a check card, a new name for debit card. Thick
card looks like a credit card but with a significant different the money for the purchase is
transferred immediately from account to the store's accounts. With immediate transfer of the
point of sale, it is easy to over draw your checking account and incur additional charges unless
you keep careful watch on spending. Personal computer banking service offer consumers the
convenience of conducting many banking transactions electronically using a personal computer.
Consumer can view their account balance, request transfer between accounts and pay bills
electronically from home.

1.2. Statement of the problem

Business organizations faces many problems in relation to electronic banking systems such as
lack of technological advancements of e-banking and lack of customers awareness because of
lack of skilled man power and late adoption of the technology. If the adoption of e-banking
service is not good, then the performance of the Bank is affected negatively. It seems very few
service attempt have been made to assess the prospect and challenges and the advantage and
disadvantage of electronic payment system from the bank perspective and the factors mentioned
above have made through assessment about the print-ability of the selected e-banking services at
the industrial level however without aggregate picture of such study policy recommendation and
measure to facilitate the electronic payment system of the country should not be at much use as it
could result in dissatisfaction of user and discourage the public from using the system as a
whole. This ultimately could result resistance or late adoption by the public towards electronic
payment system as whole.
According to Beza, 2010 all banks are too late to move with technological advancement. Every
bank customers is highly dissatisfied by the disappointing status of the financial development in
the country and tries to assess the adoption of services of Internet banking only and finds to
assess driving forces towards the adoption of Internet banking and benefits realized by the bank
in the adoption of Internet banking. However, this study more focused on assessments of
electronic banking as a whole including mobile banking, Internet banking, ATM and other e-
banking services of Dashen Bank Debre Markos branch. Hence, the researcher would tries to
answer the following basic research questions.
1.3 Research question

In this study, the researcher tries to answer the following research questions.
1. What are the prospect and challenges of electronic banking system in Dashen
Bank?
2. What are the factors that influence the adoption of electronic banking?
3. What are the benefits of electronic banking services?
4. Does the adoption of electronic banking services help customers to use easily their
money?
5. What are the impacts of ATM cards introduction on the service quality of the Bank?

1.4 Objectives of the study

1.5 1.4.1General objective
The overall objective of the study is to assess the prospect and potential challenges of electronic
banking system with reference to Dashen Bank of Ethiopia, Debre Markos branch.
1.4.2 Specific objective
1. To assess the prospect and challenges of electronic banking system of Dashen Bank.
2. To identify the factors influencing electronic banking system in Dashen Bank
3. To assess the benefit of electronic banking system for the customer of Dashen Bank.
4. To assess the expansion of electronic banking makes easy access to use money.
5. To identify the impact of ATM cards introduction in the service quality of Dashen Bank.

1.5. Limitation of the study

There are uncontrollable variables that confront the investigation and data collection, the
researcher would face lack of enough secondary data and when the researcher distributes the
questionnaires, some respondents were not voluntary to receive and fill the questioner even if
they have ability.

1.6. Scope of the study

The study is confined to assess the system of electronic banking service of selected Dashen bank
of Ethiopia at Debre Markos branch. Only data that was obtained from Dashen bank were used
in this study, moreover the study focuses only on the assessment of electronic banking service
from the viewpoint of the bank.

1.7. Significance of the study

The study can contribute in understanding the crucial frame work on the prospects and
challenges of electronic banking in Dashen bank of Ethiopia and assist the bank in understanding
the key factors affecting e-banking system. The study can also contribute to upcoming
researchers in understanding the concept and would serve as basis for future research.

1.8. Organization of the study

The paper was organized with five chapters. In which the first chapter is about an introduction
part such as background of the study, statement of the problem, objectives of the study, scope of
the study, limitation of the study, and significance of the study. The second chapter includes
literature review and the third chapter research methods and fourth chapter study about data
analysis and presentation. The last chapter is about conclusion and recommendation.
 CHAPTER TWO
LITERATURE REVIEW
Theoretical literature
2.1. Meaning of electronic banking
various scholars defined electronic banking as follows:
Electronic banking can be communication as the deployment of banking service and products
our electronic and communication networks directly to customer. These electronic and
communication networks include automated teller machines(ATM).Direct dial up connections
private and public networks Internet television, mobile device and telephone. Electronic banking
is defined as the automated of new and traditional banking products and services directly through
electronic interaction communication channel. Electronic banking include the system that
enables financial institution customer individual or business to access account transaction
business or obtain transaction products and services can be accessed using intelligent electronic
device such as personal computer(PC), personal digital assistant(PDA), automatic teller
machine(ATM)or lunch tone telephone (Deva ,2005).

Electronic money
Electronic money is defined as electronic store of monetary values on technical device that may
be widely used for making payment to under taking other than the issuer without necessary
innovating bank account in the transaction but acting prepaid bearer internment stored value
facilitate things likes smart card and digital cost that allow you to transfer money from them and
sometimes to them without needing to access an account. Electronic banking can be classified
into three broad categories as Internet banking, telephone and other electronic delivery channel
depending on the type of delivery channels used (Timothy & Macdonald, 2006).

Internet banking
“The sub set of electronic banking that primary carried by means of the Internet. The uses of
personal computer for making transfer in the bank accounts are the Internet system that enable
bank customer to accounts and general information on bank customer to services through a
personal computer (PC) or other investigate device.”
Telephone banking
Telephone banking is a service provided by financial institution, which channels its customer to
perform transactions through telephone. Most telephone banking use an Internet voice response
(IVR). To quarantine security the customer must first authenticate through the numeric or verbal
password or security. Question asked by live representative with the obvious explanation of cash
withdraws and deposits it offers virtually all the feature of an automated fever machine (Buses,
& Tiwaki, 2006).
Automatic teller machine (ATM)
A synchronous transfer mode is ale-based switching technique that uses a synchronous time
division multiplying. It encodes data into small flood size cells. This different from others
technologies based on pack switched network (such as the Internet protocol). Automated fever
machine are electronic terminals that cup you back withdraw deposit from step cash almost any
time by inserting ATM card one enter personal identification number (PIN). Some financial
institution and ATM owner charges fee particularly to customer who don't have account with
them or in remote in location (Peter. S, 2008).

2.1.1. Historyof E-banking

Electronic banking in developing countries is the early stage of development most banking in
developing countries is still done in the conventional way. However there is an increasing
growth of banking indicating promising future form banking in these countries below abroad
pictures of electronic banking in these Asia countries. The Internet technology is playing a vital
role in the bank industry another areas are obviously the impact on Internet technology on the
human being way of life cannot be under estimated as the use of Internet for information as well
as doing business become increasing through time each one of us can with noses about the over
growing demand and use of Internet from our experience audits impact on the day to day
activities of our life. Banking is an industry that is based on intensive information and transaction
in banking can normally be consummated without only physical exchange. These ingredient rave
made banking a perfect passenger for the in forest vehicle (Deva, 2005).

2.1.2 Electronic commerce

Electronic banking is an extension of e-commerce which is conducting business through
electronic networks. E-commerce is the exchange of information across electronic networks, at
any stage in the supply chain, whether within an organization, between businesses, between
businesses and consumers, or between the public and private sector, whether paid or unpaid.
(cabinet office,1999)

2.1.3 Types of e-commerce

1. B2B E-commerce
B2B e-commerce is simply defined as e-commerce between companies this is the type of e-
commerce deals with relationship between and among business followed by tale banking in the
early 1990. Where telecommunication delivers were committed to automated system with
automated value response (AVR) technology. Then PC banking or desktop is using properly soft
ware, which was more popular among corporate customer than retail customer was. The most
common e-banking service include banking inquiry function bill payment credit cared payments
fund transfers share investing insurance travel electronic shopping and other basic banking
services (Dave Chaffey , 2009). The evaluation of electronic banking travel to the early 1970s
when electronic innovation of financial institution to1970s when the computerization of financial
institution gained change .The transformation from traditional banks and mortal banking to
electronic banking has been momentary since the advantage of automatic teller machine (ATM)
the retail banking industry with reseeds such significance and expense charge. ATM has
delivered on the convenience services and creating more cost effective transaction for financial
institution. An Internet aid the management of real corporate information that may be inter
connected with company e-commerce transactions in this context corporate functional decisions
and processes involves e-commerce activities are more coherent an organized. The B2B market
has to primary computers 3 restructure and market e-restructures in this architecture of B2B e-
commerce primary consists of the following:
 E-market are simply defined as site where buyers and sellers interact with each other and
conduct transaction
 Most B2B application area of supplier management (especially process order processing
inventory management).

 The more common B2B examples are IMB. Hewitt packed (HP) assoc and Dell sis-co for
instance receivers over 90% of if products order the Internet.

2. B2C E-commerce
It is the second largest and earliest form of e-commerce. Its origin can be traced to
rotating (retailing). This more common back business model is the alien retailing
companies such as Amazon com. Drugstores carry beyond com nobles and Russ other
B2C examples in having information good receiving product over on electronic network
business to consumer e-commerce (Chaffey, 2009).

3. B2GE-commerce
Public sector rates the use of the Internet for public procurement licensing procedures
and other government related operations. This kind of e-commerce has two features first
the public sector assumes what loading rate in establishing e-commerce and second it that
the public sector has greatest need for making its procurement system more
effective( Peter S ,2008).
4. C2G E-commerce
Consumer to government type of e-commerce is characterized by the growth of electronic
market place and on line auction particularly vertical industries where firm business can
bid for what they want from among multiple supplies.
2.1.4. Advances of e-commerce for business
1. E-commerce serves as “equalize” in enable start up and small medium size enterprises
to reach the global.
2. E-commerce makes mass customization possible. E-commerce applications in this
area include easy to use ordering system that allow customer to choose and order
products according to their personal and unique specify.

2.1.5 Electronic capacity

Significant different exist among banks items of their banking capacities. These different
can take two main dimensions. The first is the use of electronic channel and the second is
the sophistication of banking service delivered over electronic capacities for channel for
simplification electronic categories by degree of functionally.

1. Information only system level 1

This is the most basic of electronic banking and which the banking put information
about its products and services on a standalone server while can be provided by the
bank itself for by sourcing it.
2. Electronic information transaction level 2
The type of electronic banking allow interaction between the workers and the
customers which may be limited to electronic mail alienate inquiry, loan application
or static file updates this category also include electronic mail capacity that allows
transfer of sensitive message or confidential information and system in which data of
file may be upload and download between users and the financial institution network.
Participants in an electronic payment system no include users of financial institution,
third part processors and government baked central banks.
2.1.6 General trend in e-banking evaluation
Electronic banking services sophistication ranges from one way information push
services where customer receive information about the bank its products and services
to information download where customer land for ask in case to full. Transaction
services where customer co-perform most banking transaction electronically (such
 transfer between accounts bill payment, third party payment card and loan application
etc).

2.1.7. Types of electronic banking service and product

Some of the electronic banking service and products classified based on the level of
banking service are:
Level 1 information:

 Advertisement about bank service

 Announcement to general customer

 Electronic mail for non sensitive information.

Level 2 Communication:

 Balance inquiry
 Account statement
 Check book request etc

Level 3 Transaction: -
 Withdraw
 Bill transfer
 Money transfer
 Deposit
 Loan payment (re- payment)
 Account opening
 Loan disbursement
 Insurance premium
 Remittance
 Benefit payment
 Credit card advance
 Payroll payment etc.

2.2. Customer Attitude

Attitude put proper into frame of liking or liking thing of moving to word from then in
other words perception about Internet banking are expected to divided consumer is now
users. On the other hand the literature an adoption of immolation and specifically
adoption of electronic banking technologies or series and other advocated with the
charismatic of the customer.

2.3. Capacity of the existing banking

Capacity of bank to have appropriate technology, equipment and power required for the
adoption of electronic banking is an important factor to be considered in the regard. It is
court that a bank cannot manage to provide electronic banking service unless it has the
necessary technology, equipment and man power to excuse the service.

2.4. Risk management of bank

Risk management of e-banking may focus one e-banking strategy, cost benefit analysis
management out sourcing relationship information security program and administration
central institution should therefore give emphases to the characteristics of electronic
banking assess their impact and take the necessary precaution to address the risk passed
by electronic banking activities ( Hull's, 2012).
2.5. Benefits of Electronic banking
Electronic banking using e-channel for banking service and product delivery which has
emerged from a business in an extension of the traditional banking activities faculties
impact in efficiency, flexibly and provides global exposure for users. Some of the key of
faring electronic banking service include reducing transactions cost , transaction cost
increasing conveniences , availability and that nests of transaction and improving
accessibility for better fund administration.
 2.6 Risk of Electronic banking
2.6.1.Strategic risk
Strategic risk is the risk associated with the fluencies instruction future business plan and
struggles (Federal financial institution examination council 2004). Financial institution
should understand the risk associated with electronic banking service and evaluation the
resulting risk management cost against the potential return on investment prior to offering
electronic banking service poor electronic banking planning and investment decision can
increase a financial institution strategic risk. In managing the strategic risk associated
with electronic banking service financial institution should develop clear detained
electronic banking objectives which the institutions evaluate the success of its electronic
banking strategy (Hull’s, 2012).

2.6.2. Credit risk

Credit risk is the risk to earn an eventually capital arising from borrower’s have to meet
the term a credit contact with a bank. This risk originated from the originating and approving
loan electronically which involves management information system to track the performance of
past piles. It not properly managed potential risk as peat like verifying the customer identity for
on line credit application and executing and enforceable control maintain for the credit quality at
loans monitoring third parties doing business agent valuing collateral perfecting line and
collecting loans over potentially wider is out of area leading may significantly increase (Federal
financial institution examination council,2005).
2.6.3. Liquidity /Interest rate/ price foreign exchange risk
Liquidity risk is the uncertainty from a banks inability to meet its obligations when they are due
without incurring unacceptable losses and interest rate is the risk to easing arising from
movements in interest rate. An institution can control this potential geographic reach through its
deposit control and account opening practices.

2.6.4. Compliance /legal risk

Legal risk is the risk or using from failure to comply with status or regulatory
obligations .Electronic banking is a new delivery channel where the sawed rules governing the
electronic delivery or certain financial institutions product or service may be amigos or still
evolving some of the request and legal challenges include in certainty over local jurisdictions
and which country low govern a specific electronic banking transaction delivery of credit and
deposit relative disclosures intakes as required by law or equation retention of required
compliance documentation for on line advertising application statement disclosure and not
establishment of legally binding electronic agreement
2.6.5. Transactional /Operational risk
Transactional risk is the current and prospective risk to earning and capital arising from fraud
error the inability to deliver products top or services the failure to maintain competitive position
and services and mobility to manager formation properly the reliance on new technologies to
provide service, makes security and system availability the central operational risk electronic
banking (Basel committee report 1998).

2.6.6. Reputation /Total reliability risk

An instructions decision to offer electronic banking service specially the more complex
transaction service since they increase its level of the reputation risk breaches or security and
description to the system's availability condense electronic banks repetition even other potential
providers of electronic banking as it causes customer to lose confidences on electronic delivery
challenges saw hale. The risk linked with customer expiation regarding the delivery of electronic
banking service and whether the institutions meeting its regulatory and customer's protection
obligation relating to these service. An institution reputation particularly the trust of lender to it
by customers and counter percussion is irrevocably tarnished due to perceived or new breaches
instability to conduct business securely and responsibly (Hull's, 2012).

2.7. Challenges of electronic banking for regulators and supervisors

Electronic banking exacerbated bates of the traditional bank risk live operational reputation and
legal risk and need for increased cross-border co-operation among bank superiors or availability
tight secure.

Empirical literature
The previous study related to this study is presented or discussed under this empirical literature
review: According to M.M.Rahman (2008) in Bangladesh e- banking is now a global
phenomenon. Apart from the developed countries, the developing countries are experiencing
strong growth in e-banking. The governments emphasis on setting up ICT park, rising allocation
for developing ICT infrastructure, waving takes on computer peripherals and other measures
including the automation program of banking sector and competition among the scheduled banks
in improving customer services have accelerated the prospect of e-banking.( M.M.Rahman,2008)
ATM, credit card debit card services, Internet banking, mobile banking and other electronic
payment systems are at infant stage. The most common e-banking channel among the bank,
which are currently provided the service is ATM card, which is the first generation of e-banking
channel, so from this it is possible to conclude that even banks that providing the service did not
sufficiently adopted the latest e-banking channel such as Internet and mobile banking.(Beza,
2010).

CHAPTER THREE

RESEARCH METHODS
3.1 Research design
The type of research for this study is descriptive type of research design. Because the major
purpose of descriptive research is description of the state of affairs as it is exist at present. Then,
this study describes and critically assesses the electronic banking system of Dashen bank of
Ethiopia at Debre Markos branch.
3.2 Sources of data
In order to achieve the objective of the study the researcher were used primary source of data.
Both open ended and close-ended questionnaire were the major source of data for this study.
The reason for the use of primary data is there is no available secondary data source in the bank
on electronic banking.

3.3 Methods of data collection

This study was conducted and evidences were collected from primary data source. The
primary data was collected from questionnaires, which were distributed to selected workers and
customers of the branch.
3.4 Sampling technique
This study has two target groups, the first were workers of the bank and the other were customer
of the bank. In order to collect data from employees of the bank, the researcher uses census-
sampling techniques because; the numbers of employees of the bank are small and simple
random sampling techniques to collect data from customers of the bank.

3.5 Sample size

As it is impossible to cover the whole target population due to financial and time constraints,
this enforced the researcher to take sample from target group. And in order to achieve the
objectives, the researcher were taken a sample size of 9 from employees and from the total of
5400 customers, the researcher were taken a sample size of 98 by using simple random
sampling techniques as follows:

n= N /1+ N(e)2
n= 5400/1+5400(0.1)2 = 98
Where n = sample size
N = target population
e = sampling error

3.6. Method of Data Analysis and Presentation

After the relevant data were collected from the source, the study was analyzed through
qualitative and quantitative data analysis techniques that ensure the objectives of the study. This
analysis technique helps the researcher to analyze and present the finding through percentages,
frequency and tables.

CHAPTER FOUR
DATA ANALYSIS AND PRESENTATION

This chapter is the main part of the study, which concerns with the presentation of the finding,
analysis and discussion on the electronic banking system of Dashen bank Debre Markos branch.
The important information for the analysis is mainly collected through questionnaires from
employees of the Bank and customers of the Bank. To collect relevant data, questionnaires were
distributed to 9 employees and 98 randomly selected customers of the Bank. The questionnaires
distributed to employees of the bank were totally collected and from the total of 98
questionnaires distributed to customers 80 (81.63%) of them were collected, the rest of the
questionnaires is not collected since the respondents were not voluntary to fill and return it
timely. Thus, based on the response obtained from sample respondents, analysis and
interpretation of data are presented as follows:
4.1. General characteristics of employees
Table: 4.1.1: Sex of employees
No Item Frequency Percentage
1 Sex Male 6 66.67%
female 3 33.33%
total 9 100%

(Source: Questionnaire, 2016)

It can be easily understood from the above table about 6(66.67%) of the respondents were male
and 3(33.33%) of the respondents were female. This table shows that the majority of employees
in the bank were male. Since the majority of employees in the bank were male, the bank may
loss some absolute advantages from female because females are active in nature and the can do
activities diligently than males.

Table: 4.1.2: Age of employees

No Item Frequency Percentage
2 Ag 18-25 2 22.22%
e 26-35 7 77.78%
36-45 0 -
Above 45 0 -
Total 9 100%
(Source; Questionnaire, 2016)
The above table shows that about 2(2.22%) of the respondents were at the age of 18-25 and
7(77.78%) of the respondents were at the age of 26-35. And none of the respondents were at the
age of 36-45 and above 45. According to the table majority of the employees are young, which
helps the bank to do activities quickly and actively than old employees since they are at the age
of productivity.

Table: 4.1.3: Level of education

No Level of education Frequency Percentage
3 Diploma 0 -
Degree 5 55.56%
Above Degree 4 44.44%
Total 9 100%
(Source: Questionnaire, 2016)
As indicated from the above table about 5(55.56%) of the respondents were 1 st degree holders
and 4(44.44%) of the respondents were above 1 st degree holders. From the above table the
researcher understood that all of the employees of the bank are degree holder. So, the good
educational level of the employees helps the bank to do carefully by using their good knowledge
and skills than Diploma and certificate holders.

Table: 4.1.4: Monthly income of employees

No Monthly income Frequency Percentage

4 Below 1000 0 0%
1000-2000 0 0%
Above 2000 9 100%
Total 9 100%
(Source: Questionnaire, 2016)
With regard to the income of the respondents 9(100%) of the respondents earn monthly income
above 2000 Ethiopian birr per month. This table shows that all of the employees of the bank are
paid above 2000 Ethiopian birr per month. When the incomes of employees increase, the
employees are more sensitive to do their work effectively and efficiency and attracting customers
by their service, which intern increase the numbers of customers and enhance the profits of the
bank.

Table; 4.1.5: Service year of employees

No Service year Frequency Percentage

5 1-5 6 66.67%
6-10 3 33.33%
11-15 0 0%
Above 16 0 0%
Total 9 100%
(Source: Questionnaire, 2016)

Table 4.1.5 is about the service year of the employees of the bank and the table shows that out of
the total respondents 6(66.67%) of the respondents served 1-5 years and 3(33.33%) of the
respondents served 5-10 years. None of the respondents have served above 10 years.

4.1.6: General information related to the study

In this section the important issues related to electronic banking are discussed briefly. The
analysis and presentation is made using statistical tools such as ratios, percentages and tables.

Table: 4.1.6: Electronic banking services

No Item Frequency Percentage

6 Which e-banking services

currently given by the bank?
You can choice more than once.
ATM 4 44.44%
Mobile banking 1 11.12%
 Telephone banking 3 33.33%
Others 1 11.11%
Total 9 100%
(Source: Questionnaire, 2016)

It can be easily seen from the above table about 4(44.44%) of the respondents believed that the
bank gives ATM service to customers, 1(11.12%) mobile banking, 3(33.33%) telephone banking
and 1(11.11%) others. As we seen from the table the bank most of the time gives ATM and
telephone banking to its customers.

Table: 4.1.7: using e-banking reduce costs

No Item Frequency Percentage

7 Do you think using e-banking

reduce costs?
Yes 7 77.78%
No 2 22.22%
Total 9 100%
(Source: Questionnaire, 2016)

When we look at the response of the respondent with regard to this issue from the above table,
7(77.78%) of the respondents were using e-banking reduces costs and the other 2(22.22%) from
the total respondents were using e-banking does not reduce costs. Thus, majority of the
employees responded that using e-banking reduces costs.

4.1.8. ATM/Automatic teller machine

Automatic teller machine are electronic terminal which helps customers of the bank to
Withdraw, deposit and transfer of cash almost any time by inserting ATM card and enter
personal identification number.

Table: 4.1.8: ATM

No Item Frequency Percentage

8 Do you think the expansion of
ATM results easy money flow to
customers?
Yes 8 88.89%
No 1 11.11%
Total 9 100%
(Source: Questionnaire, 2016)

It can easily understood from the above table 8(88.89%) of the respondents from the total
respondent were expansion of ATM results in easy money flow to customers and 1(11.11%) of
the total respondents were expansion of ATM did not results in easy flow of money to
customers. Table4.1.8. shows that All most all of the respondents respond that the expansion of
ATM results easy money flow to customers.

Table: 4.1.9: Technological and Infrastructural requirement

No Item Frequency Percentage

9 Do you agree on the technological
and infrastructural requirement is
significant for successful adoption
of e-banking?
Extremely significant 5 55.56%
Very significant 4 44.44%
significant 0 0%
Less significant 0 0%
Total 9 100%
(Source:Questionnaire,2016)
It can be seen from the above table 5(55.56%) of the respondents said extremely significant and
4(44.44%) of the respondents considered as very significant. None of the respondents said
significant and less significant. According to the respondents response majority of the
respondents agree that technological and infrastructural requirement is extremely significant to
the successful adoption of e-banking.

Table: 4.1.10: No of customers

No Item Frequency Percentage
10 Do you agree that the number of
customers increasing from time to
time due to the expansion of e-
banking service?
Yes 8 88.89%
No 1 11.11%
Total 9 100%
(Source: Questionnaire, 2016)

It can be easily understood from the above table 8(88.89%) of the respondents from the total
respondents said that the number of customers increasing from time to time due to the expansion
of e-banking and 1(11.11%) of the respondents respond that the number of customers does not
increase time to time. This shows that the number of customers increasing from time to time.

Table: 4.1.11: Obstacles of e-banking system

No Item Frequency Percentage

11 What are the obstacles of e-
banking system in operation?
Time 1 11.11%
Safe guarding 3 33.33%
Lack of knowledge 5 55.56%
Others 0 0%
Total 9 100%
(Source: Questionnaire, 2016)

Table 4.1.11 above shows that 1(11.11%) of the respondents said time is obstacle in e-banking
operation, 3(33.33%) of the respondents is safe guarding, 5(55.56%) of the respondents said that
lack of knowledge is obstacle of e-banking in operation. These show obstacles of e-banking were
lack of awareness or knowledge.

Table: 4.1.12: Important of e-banking in the development of country's economy

No Item Frequency Percentage
12 Do you think that e-banking can
have an important role in the
development of economy of a
country?
Yes 6 66.67%
No 3 33.33%
Total 9 100%
(Source: Questionnaire, 2016)

It can be easily understood from the above table 6(66.67%) of the respondents from total
respondents were respond that e-banking can have an important role in the development of
economy of a country and 3(33.33%) of the respondents were respond that e-banking cannot
have an important role in the development of a country.

Additionally, the respondents who replied “Yes” in the above question were asked to explain
their reason as follows:-

 It is comfortable for investment expansion & foreign exchange.

 E-banking give a good service and saves time.

 Used for exchange of money from one financial institution to other financial institution.

 It induces circulation of money in a country.

 It facilitates the transfer of money so that all transaction will be also smooth, easy and
then the economy of a country will grow.

4.1.13: Effort the bank made to improve e-banking

What effort the bank has made to improve e- banking service delivery from time to time ?

With regard to the above question the answer of the respondents are as follows:-

 Give information to customers of the bank about the technology.

  Create awareness to customers about the important of e-banking by meeting, media and
other mechanisms.

 Countrywide advertisement.

4.2Awareness of customers about electronic banking

General characteristics of customers

Table: 4.2.1: sex of customers

No Item Frequency Percentage

13 Male 49 38.75%
Sex Female 31 61.25%
Total 80 100%
(Source: Questionnaire, 2016)

As indicating in the above table about 49(61.25%) of the respondents were male and 31(38.75%)
of the respondents were female. The majority of the respondents were male.

Table: 4.2.2: Age of customers

No Item Frequency Percentage

14 18-25 21 26.25%
Age 26-35 30 37.5%
36-45 21 26.25%
>45 8 10%
Total 80 100%
(Source: questionnaire, 2016)

As indicated from the above table (table 4.2.2) about 26.25% of the respondents were at the age
of 18-25, 37.5% of the respondents were 26-35, 26.25% of the respondents were 36-45 and 10%
of the total respondents were at the age of above 45. The above table shows that almost all of the
respondents are young.
Table: 4.2.3: Income of customers

No Item Frequency Percentage

15 Below 1000 12 15%

1000-2000 30 37.5%
Above 2000 38 47.5%
Total 80 100%
(Source: Questionnaire, 2016)

With regard to the income of the respondents 15% of the respondents earn below 1000, 37.5% of
the respondents earn 1000-2000 and 47.5% of the respondents earn more than birr 2000 per
month. According to the above table majority of the respondents earn above birr2000 per month.

Table: 4.2.4: Expansion of electronic banking

No Item Frequency Percentage

16 Do you think the expansion of e- Yes 64 80%
banking makes easily access to No 16 20%
your money? Total 80 100%
(Source: Questionnaire, 2016)

It can be easily understood from the above table from the total of 80 respondents 80% were
agree that the expansion of electronic banking makes easy access to use their money and other
20% of the respondents were believe that the expansion of electronic banking cannot make easy
access to use their money. So, majority of the respondents respond that the expansion of
electronic banking helps easy access to use money.

Table: 4.2.5: Types of electronic banking

No Item Frequency Percentage

17 Which types of e-banking user

you are?
ATM 40 50%
 Mobile banking 20 25%
Telephone banking 10 12.5%
Others 10 12.5%

Total 80 100%
(Source: Questionnaire, 2016)

As indicated in the above table 50% of the respondents are user of ATM, 25% mobile banking,
12.55% telephone banking and the remaining 12.5% of the respondents were users of other
electronic banking services. According to the response of the respondents half of the respondents
are user of ATM services.

Table; 4.2.6: Knowledge and information

No item Frequency Percentage

18 Do you have knowledge and
information about e-banking?
Yes 21 26.25%
No 59 73.75%
Total 80 100%
(Source: Questionnaire, 2016)

It can be easily understood from the above table about 26.25% of the respondents were respond
that customers have knowledge and information about electronic banking used by the bank and
the remaining 73.75% of the respondents were respond that customers have no knowledge and
information about electronic banking services used by the bank.

Additionally, the respondents who replied 'Yes' in the above question were asked to explain their
reasons as follows:-

 All customers have got the knowledge and information about e-banking through
promotion of the bank and different brochures.
  The bank gives very good information for all customers, so all customers know about e-
banking services.

 People waltzing e-banking in their area.

 Information and knowledge about e-banking can be transferred through media,

advertisement and other sources.

Table; 4.2.7: Risk of electronic banking

No Item Frequency Percentage

19 Do you think that there is a risk in

the bank with relation to e-
banking?
Yes 50 62.5%
No 30 37.5%
Total 80 100%
(Source: Questionnaire, 2016)

It can be easily understood from the above table about 62.5% of the respondents were respond
that it have a risk in the bank with relation to e-banking and 37.5% of the respondents were
respond that it have no risk in relation to e-banking service. According to the table, majority of
the respondents responses it has a risk.

Table: 4.2.8: Capacity of the bank

No Item Frequency Percentage

20 How do you explain the capacity of
the bank to expand e-banking?
Extremely significant 27 33.75%
Very significant 23 28.75%
Significant 24 30%
Less significant 6 7.5%
80 100%
(Source: Questionnaire, 2016)

As indicated from the above table 33.75% of the respondents respond extremely significant,
28.75%were respond that very significant, 30% were respond that significant and the remaining
7.5% of the respondents were respond less significant. According to the above table the capacity
of bank to expand e-banking is very high which increase the customers of the bank and enhances
the reliability of customers on the bank.

Table: 4.2.9: Access to use money

No Item Frequency Percentage

21 Dose e-banking helps you to get your

money easily?
Yes 68 85%
No 12 15%
Total 80 10
(Source:Questionnaire,2016)

It can be easily understood from the above table about 85% of the respondents were respond that
e-banking helps to get money easily and shortly and 15% of the respondents respond that e-
banking does not help to customers to get their money easily. According to the table all most all
of the respondents think that e-banking helps to get their money easily.

Table: 4.2.10: Impacts of ATM

No Item Frequency Percentage

22 Dose ATM has impact on the saving
culture of customers?
Yes 32 40%
No 48 60%
Total 80 100%
(Source: Questionnaire, 2016)

As indicated from the above table about 40% of the respondents were respond that ATM has
impact on the saving culture of customers and the remaining 60% of the respondents respond
that ATM has no impact on the saving culture of customers. According to the above table
majority of the respondents respond that ATM has no impact on the saving culture of customers.

Additionally, respondents who answered 'Yes' for the above question explain their reason as
follows:-

 It leads to withdrawal of money rapidly, which in turn leads to unplanned use of money.

 Its comfort ability to withdraw money leads to customers to withdraw their money easily
at anytime and anywhere, which in fact reduces the saving culture of customers.

 Since ATM is operating at any time (24 hours) including public holidays, the customers
with draws their money even in holiday so, it leads to extravagance.

 Generally, ATM is comfortable to withdraw money easily and visa cards are simply
holds in pockets it leads to more withdrawal and using it for unwanted uses.

Table: 4.2.11: Benefits of e-banking

No Item Frequency Percentage

23 What benefits does e-banking gives
to customers of the bank?
Easily access of money 28 35%
Saving of time 21 26.25%
Moving of money easily 22 27.5%
Others 9 11.25%
Total 80 100%
(Source: Questionnaire, 2016)

The above table ( table 4.2.11) shows that from the total respondents 35% of the respondents
says that e-banking helps to customers easily access their money , 26.25% saving time , 27.5%
helps to move money easily and 11.25% says e-banking helps to other uses. According to the
table easily access of money is the major benefit of customers of the bank.

Table: 4.2.12: Problems of ATM

No Item Frequency Percentage

24 Which problems you face when
you use ATM?
Defects of machine 26 32.5%
Lack of awareness 41 51.25%
Difference between balances 5 6.25%
Others 8 10%
Total 80 100%
(Source: Questionnaire, 2016)

Table 4.2.12 shows that from the entire respondents about 32.5% says that defects of machine
are problem in the use of ATM ,about half (51.25%) of the respondent says lack of
awareness ,6.25% says difference between balances in the book of the customers and in the
books of the bank and the remaining 10% says other problems. According to the response of the
respondents shown in the table above lack of awareness is the major source of problems for
customers of the bank to use ATM.
4.2.1`3 Contribution of e-banking on protection of money

What is the contribution of e-banking on the protection of money from thief in the safe manner?

With regard to the above question the answers are as follows;-

 When you tack your money in your pocket wherever you go, it is more likely that your
money may be stolen, but if you have ATM card with you, you can pay for your service
at any point of stop. You do not need to take money with you. Therefore, it is safe and
you do not think that your money be stolen.

 General banking service is safe for money save the same to e-banking service more
comfortable for the businessperson.

 If e-banking electronically exercised any damage which can be caused by any case it is
very helpful to control it as soon as, it is supported by full information that guides to
detect the thefts and frauds.

 To use bank account, to use visa card, to use transfer mobile system.

 It helps to limit the amount of money that customers hold, keeps, secret the customer’s
usage and make easy the purchase process in the supper markets and hotels.

 To saving time and to secret any information by money through money transaction.

 In addition, if we have such e-banking system we can withdraw any where the same bank
branch.

CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

5.1. Conclusions

The result of this study has important conclusions for researchers and banks that are planning to
offer e-banking products in terms of research. This study provides further evidence in prospects
and challenges of e-banking in the selected Bank and the factors that are influential for its
success full adoption.

The technological and infrastructural requirements are extremely significant to the successful
adoption of e- banking and the bank makes greater effort to improve e-banking delivery from
time to time by giving information to customers about the technology and create awareness to
customers about the importance of e-banking through different mechanisms.

This study recognizes that e-banking has different benefits operational cost reduction, perfect
information about customer. Easy access to use money on this benefits bank can affirmed e-
banking products at lowest cost attracting and satisfying more customers.

On other hand it has also recognized that e-banking has challenges emanated from the
fundamental requirements like technological and infrastructural requirements capacity of the
existing bank, risk management capacity of bank and associated with e-banking like operational
risk, strategic risk and business risk.

The result also show that the number of customers increasing from time to time due to the
expansion of e-banking system and also the obstacles in e- banking system operation is lack of
awareness.

It also show that e-banking can have an important role in the development of economy of a
country and electronic banking helps to customers of bank easily access to use their money by
moving their money easily from place to place and safeguard it from loss.

5.2. Recommendations

Based on the above conclusions and observation of the study the recommended ideas are the
followings:-
 Dashen Bank, Debre Markos branch need to appropriately assess and take a measurement
in order to overcome the prospects and challenges that affects electronic banking service
of the bank.

 Dashen Bank, Debre Markos branch should have to eventually distribute the availability
of technological and infrastructural requirements to improve e- banking delivery from
time to time and to enhance the service quality of the bank.

 Dashen Bank, Debre Markos branch should improve the awareness of customers about e-
banking and increase the customer’s knowledge and skills to provide new technological
advancements.

 Dashen Bank, Debre Markos branch should have to consider the prospects and challenges
of e-banking before adoption of the products to market.

 Dashen Bank, Debre Markos branch have to undertake market research to develop a
suitable business continuity plan to avoid the risk of e-banking emanated from lack of
technological and infrastructural requirements like operational risk, transactional risk
strategic risk and business risk.

 Dashen Bank, Debre Markos branch should do more in order to provide quality e-
banking services to customers since it plays a vital role in the development country's
economy and assess the impact of ATM on the saving culture of the customer and
creating awareness for the existing electronic banking products like ATM and mobile
banking because most customers used it highly.

REFERENCE
1. Azam, Md. Shah, (2007), Implementation of B2C E-commerce in Bangladesh.

2. Basel committee report on banking supervision, Risk management for electronic

banking money activities, Switzerland; Bank of international settlement,(1998).

3. Buses, S. and Tiwari, R., (2010), mobile banking stages a remarkable comeback,
press release.

4. Dave Chaffey,(2009), Electronic business and Electronic commerce management, 4 th

Edition. Prentice Hall.

5. John C. Hull’s, (2012), Risk management and financial institution, 3 rd Edition.

Sharda offset press, Delhi.

6. Rose Peter. S, (2008), Bank management and financial service, 8 th Edition.

MCGraw- HALL international edition.

7. Timothy W and S. Scott Macdonald, (2006), Bank management, 6th Edition.

8. Vasu Deva, (2005), Electronic banking, 1st Edition.

APPENDIX
 DEBRE MARKOS UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

QUESTIONNAIRE

Questionnaires to be fulfilled by employees of Dashen bank of Ethiopia at Debre Markos

branch.

Dear respondents: The main aim of this questionnaire is to collect relevant data on e- banking
in your organization. Therefore, you are kindly requested to respond genuinely & honestly by
putting x marks on the box for your response. Because, your genuine and honest response is
highly needed since it will enhance the finding of the study.
Directions:

 You are not supposed to write your name.

 Your response will be confidential and it will be used only for academic purpose.
 Please make”x” mark in the box according to your choose and write your response on the blank
space.

Part one: back ground information

1. Sex A, Male B, Female

2. Age A, 18-25 B, 26-35 C, 36-45 D, above 45

3. Level of education A, Diploma B, Degree C, above Degree

4. Job status A, Top level management B, Middle level management

C, Low-level management

5. Monthly income A, below 1000 B, 1000-2000 C above 2000

6. Service year A, 1-5 B, 5-10 C, 10-15 D, above 15

Part Two: General questions

1. What are the e-banking services currently given by Dashen bank? You can choose more than
once.
A, ATM B, Mobile banking
 C, Agency banking D, Others
2. Do you think using e- banking reduces cost?
A, Yes B, No
3. Do you think the expansion of ATM results easy money flow to customers?
A, Yes B, No
4. Do you agree on that the technological and infrastructure requirement is significant for suc-
cessful adoption of e banking?
A, extremely significant
B, Very significant
C, Significant
D, Less significant
5. Do you agree that the number of customers increasing from time to time due to the expan-
sion of e-banking system?
A, Yes b, No
6. What are the obstacles of e- banking systems in the operation?
A, Time B, Safe guarding C, Knowledge D, Others
7. Do you think that e banking can have an important role in the development of economy of a
country?
A, Yes B, No
8. If your answer to the above question is yes, could specify how?

9. What effort the bank has made to improve e-banking service delivery from time to time?

Thank you for your cooperation!

!