My Ssec Capstone Project The introduction of electronic business

The introduction of electronic business

The introduction of electronic business (E-business), one of the Information Technology (IT) applications has changed the traditional way of conducting business transactions in many organizations and that led the growing number of organizations launch new Internet-based business lines to improve their businesses (Claessens et al, 2002; Yousafzai et al, 2003; Gikandi & Bloor, 2010 and Karjaluoto, 2002). Organizations in the banking industry have also initiated an IT application known as electronic banking (E-banking) in order to meet the growing demands of their customers and to meet the growing trend of technological advancement in recent years. It is nothing but E-business in banking industry. E-banking is a key element for improving efficiency and productivity in both private and government banks in order to strengthen the national economy (Addai, Ameyaw, Ashalley & Quaye, 2015). This supposes that the benefit of E-banking does not only lie in enhancing the ability of banks to meet the demands of their customer but to strengthen the national economy. An assessment of E-banking and its related variables such as service delivery and customer satisfaction is, therefore, very essential.
The evolution of E-banking started from the use of Automatic Teller Machines (ATMs) and Finland is the first country in the world to have taken a lead in E-banking in order to provide efficient and effective service (www.encylopedia.com and Karjaluoto, 2002). Electronic banking has been widely used in developed countries and rapidly expanded in developing countries. However, the slow diffusion of E-commerce to African countries has attributed to a number of issues some of which may be unique to the African Continent (Beza, 2010). The internet is transforming the banking and financial industry in terms of the nature of the essential products /services and the way these have been packaged, planned, delivered and consumed ( Beza, 2010). Moreover, electronic banking products and services are prime importance for banks to operate and remain in a global competitive environment. E-banking service is based on the use of new technologies to provide various banking services directly to customers around the clock. Banks offer a wide range of these services using electronic tools such as ATM, cell phone, cards, television banking, point of sales and Internet (Ammar, 2012). Ovia (2002) states that E-banking as the delivery of banking services and products using electronic devices to customers irrespective of place, time and distance. He went further to state this form of transaction process has transformed the cash based economy to an electronic based. E-banking includes the systems that enable financial institution customers, individuals or businesses, to access accounts, transact business, or obtain information on financial products and services through a public or private network, including the Internet (Goi, 2005).
On the other hand, Timothy (2012) stated that customer’s satisfaction holds the potential for increasing an organization’s customer base, increase the use of more volatile customer mix and increase the firm’s reputation. Consequently, obtaining competitive advantage has secured through intelligent identification and satisfaction of customer’s needs better and sooner than competitors and sustenance of customer’s satisfaction through better products/services (Akindele ; Rotimi, 2014). Hence, technology acquisition must be based on actual needs and the proven ability to deliver customer friendly solutions. However, with globalization, banks have no choice but to adopt electronic banking services to enhance effective service delivery that exceeds to customer satisfaction, if they really want to stay in the business race, let alone be profitable (Madueme, 2009). But, it should be realized that electronic banking services is an invention of Information and Communication Technology (ICT) that made it possible for service providers and their customers in developing economies to enjoy a good resemblance of the services enjoyed in the developed societies. Electronic banking services have afforded banks the opportunities to impress customers that encourage them to keep coming back (Rahel, 2015).
Most banks in the world countries like Ethiopia are now offering E-banking services in various ways to satisfy their customers. It would be difficult to see any bank in any country that does not render one form of electronic banking service or the other even banks in the most remote parts of the world. The banking industry has moved into an era of menu-driven ultra-robust specialized software program called banking applications (Dzogbenuku, 2013). These applications can carry out virtually all banking functions relying heavily on information collection, storage, and transfer and processing. Besides, the application of electronic banking products/services to banking operations has become a subject of fundamental importance and concerns to all banks operating within the country and indeed a condition for local and global competiveness (Rahel, 2015 and Million, 2013).
Following the Ethiopian’s new economic policy and institutional reform program began in the middle of 1991 that indicates the creation of an enabling environment for private sector to participate in the rapid and sustained economic development of the country by investing their money (Haftom, 2013). This recent consolidation exercise in Ethiopia banking sector has drawn the attention of many banks to application of various technological devices in promoting/achieving better customer service delivery that guaranteed customer satisfaction that translates into increase profitability and higher return on investment. One of these technological devices is service delivery through electronic banking.