The Impact of Electronic Banking Service Quality On customer Service and Bank Performance; The Case of Four Branches of Commercial Bank of Ethiopia in Ambo Town

Abstract

Commercial Bank of Ethiopia is the pioneer mover towards the adoption of electronic banking in Ethiopia. The purpose of this study was the impact of electronic banking service quality on customer service and bank performance. The study used quantitative research approach and secondary financial data are analyzed using multiple linear regressions models for the two bank performance measures; Return on Asset (ROA) and Return on Equity (ROE). Beside this, the study used primary data analysis to obtain customers perception on service quality of the bank after the adoption of electronic banking; and interview is also made to solicit officials’ perception towards the effects on customer service and bank performance obtained as a result of electronic banking. The findings from both customers and bank officials’ indicated that, electronic banking has positive influence on customer service. Both internal and external Secondary data analysis and bank officials also confirmed that electronic banking has improved performance of the bank. However, it is also indicated that, there are some challenges such as machine downtimes, preventing the bank from enjoying benefit of electronic banking system to the maximum. This study suggests that, the bank should process cards as fast as possible, empower the support system as per customers’ expectation, promote usage of cards and adopt alternative electronic banking features.