Abstract:
This thesis aimed to study and present the status of electronic banking in Ethiopia and in
overall the impact on the financial performance of the commercial banks in Ethiopia offering
electronic banking.There is a huge gap in knowledge on the impacts of electronic banking on
banks’ financial performance in commercial banks in Ethiopia across different people. Most
people are account holders of banks but are not aware that the same banks offer convenience
through e-banking. Primary data were collected through questionnaires from staff members
of the surveyed banks. It was complemented with secondary data sourced from the company’s
audited financial statements for the period 2015 to 2023. Data collected were analyzed using
both descriptive and inferential statistics while testing of the research questions was done
using multiple regression analysis. The study revealed that electronic banking has play a
significant role on the financial performances. also, it was observed that E-Banking channels
contributed to Bank's profitability, that E-banking services (EBS) had an influence on the
retention and loyalty of bank's customers and that the quality of service, security, reliability
and efficiency have a definite impact on the usage of the services of e-banking. It was
recommended that the Ethiopian banking industry should invest more in Mobile banking,
Internet banking, point of sale banking, electronic fund transfer followed by ATM amongst
other electronic channels; as they generate more revenues for the bank. The study also
recommended further development of other channels (branch banking, Corporate Payments,
and agency banking) to further enhance their contribution to the bank's profitability.
Commercial banks in Ethiopia should also create a business strategy that is customer-centric
by being continuously innovative in identifying the needs of their customers and improving on
their products offering while developing new ones, to retain and keep the loyalty of their
existing customers while attracting new ones.
