Determinants Of Digital Banking Channel Usage And Its Effect On Money Transaction In Private Commercial Banks: The Case Of Cooperative Bank Of Oromia, Ethiopia

Abstract

The primary aim of this study is to explore the determinants of digital banking channels usage and its effect on money transactions within Ethiopia's banking sector, in the case of Cooperative Bank of Oromia. . Employing the Unified Theory of Acceptance and Use of Technology (UTAUT) framework, encompassing performance expectancy, effort expectancy, social influence, facilitating conditions, and use behaviour, by adopting a mixed-methods approach. The primary data was collected from 373 randomly selected respondents via semi structured questionnaires. Descriptive statistics, multinomial logit, and multiple linear regression models were employed for analysis. . Cooperative bank of Oromia offers different digital banking channels. Among the mainly used were mobile banking, Internet banking, card banking and wallet banking. Key findings highlight that Wallet Banking emerges as the most widely used channel (50.13%), with lower fees identified as a significant driver of adoption (47.5%). Multinomial regression results underscore the impact of age on digital banking usage, indicating a preference for Internet Banking among younger individuals. Gender dynamics reveal that males are less inclined to use Mobile Banking compared to Wallet Banking. Marital status also plays a role, with married individuals showing a preference for Internet Banking. Performance expectancy strongly influences the usage of Mobile and Card Banking. Social influence has a negative impact on the usage of Mobile, Internet, and Card Banking compared to Wallet Banking. Facilitating conditions positively affect Mobile Banking and overall channel usage but have a negative impact on Internet Banking. Multiple regression results indicate that Internet Banking, Card Banking, and Wallet Banking collectively affects transaction frequency. Practical recommendations derived from these findings include tailoring marketing strategies to the prevalent demographic, enhancing internet connectivity for improved user satisfaction, diversifying digital banking services, promoting long-term engagement through incentives, targeting higher-income users with exclusive benefits, refining the user experience, and educating users on the security features of digital banking channels. In essence, the study provides valuable insights into the intricate dynamics of digital banking channel usage within the Ethiopian context