The factors affecting the Adoption e-banking in Tanzania banking industry: The Case of Banks in Dar es salaam Region

Mkoka, Illuminatus Jones (2014) The factors affecting the Adoption e-banking in Tanzania banking industry: The Case of Banks in Dar es salaam Region. Masters thesis, The Open University of Tanzania.

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Abstract

In recent years, the adoption of Electronic banking (E-banking) began to occur quite extensively as a channel of distribution for financial services due to rapid advances in the information technology (IT) and Intensive Competitive banking market. Electronic banking offers numerous benefits to both banks and customers. Customers can check account balances, transaction costs, establish greater control over bank accounts and other banks. They can also benefit from lower transaction cost, less paper work and less staff. Despite knowing the benefits of E- banking, Tanzania’s banks continue to conduct most of their banking transactions using traditional methods. Understanding the reasons for lack of such technological innovation in developing countries such as Tanzania will develop a fruitful research. This study aimed to investigate the factors that affect the adoption of E-banking in Tanzania Banking Industry (enablers and inhibitors).Other objectives and research questions were developed in order to have proper investigation and analysis on various variables . The study has employed a case study strategy with questionnaires, interviews, consultations, observations and pilot study as main data collection methods. Moreover, qualitative and quantitative techniques have been used in the analysis of the problem. The primary data have been obtained by questionnaires and analyzed and indicated clearly on tables and figures. The secondary data on the other hand have been analyzed and shown on tables as well as reading different literatures from the scholars, while the data from the questionnaires have been processed by using computer programme Statistical Package for Social Sciences (SPSS) to access the enablers and inhibitors of the adoption of e-banking The study has come up with an integrated model including seven variables (Organizational Capabilities, Received Benefits, Perceived Received Benefits, Perceived Credibility, (Perceived Regulatory), Institutional Readiness and Institutional Influence) which influence the adoption of e-banking in developing countries. The findings revealed that all these seven variables jointly provide an excellent understanding of the factors affecting the adoption of E-banking in the Tanzania’s Banking Industry. Also, the study underscored that apart from the perceived benefits as an enabler, other six variables are inhibitors of adoption of e- banking. Services offered by banks to its customers are not adequate, thus leading to retail or personalized banking (B2C). However, with all inhibitors, e-banking have positive impact on economic development and Mobile banking have helped e-banking to spread to unbanked areas. Mobile banking is cheap, time saving and the service can be provided elsewhere using different platforms and inter operability. The study concluded that regulators, law makers, ICT industries, institutions, and the banking industry itself have the task to alleviate these inhibitors by providing guideline/policies, cyber laws, adoption of fast changes in ICT technologies, develop partnership, have enough capital budget for ICT investment and training, in order to develop trust, security, capability, basic bank supervision and increase in service coverage from personalized to SME and Corporate. The study covered commercial banks namely NBC, CRDB, NMB, and DCB located in Dar es Salaam Region.

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