THE EFFECT OF CORE BANKING ON CUSTOMER SATISFACTION

IN COMMERCIAL BANK OF ETHIOPIA (A CASE OF PIASSA

BRANCH) BY

YANET DUGUMA

A THESIS IS SUBMITTED TO ST. MARY’S UNIVERSITY, SCHOOL OF

GRADUATE STUDIES IN PARTIAL FULFILLMENT FOR THE AWARD OF
DEGREE OF MASTER OF BUSINESS ADMINISTRATION (MBA)

DECEMBER, 2020

ADDIS ABABA, ETHIOPIA

 ST MARY UNIVERSITY
SCHOOL OF GRADUATE
STUDIES

THE EFFECT OF CORE BANKING ON CUSTOMER SATISFACTION

IN COMMERCIAL BANK OF ETHIOPIA (A CASE OF PIASSA
BRANCH)

BY

YANET DUGUMA

A THESIS PROPOSAL IS SUBMITTED TO ST. MARY UNIVERSITY

SCHOOL OF GRADUATE STUDIES IN PARTIAL FULFILLMENT FOR
THE AWARD OF DEGREE OF MASTER OF BUSINESS
ADMINISTRATION (MBA)

ADVISOR
DR. MESFINTESFAYE (PHD)

DECMBER, 2020

ADDIS ABABA, ETHIOPIA

 Declaration

I, Yanet Duguma, hereby declare that this thesis entitled “The Effect of Core Banking on
Customer Satisfaction in Commercial Bank of Ethiopia a Case of Piassa branch submitted by me
for the award of the Degree of Master of Business Administration (MBA), St Mary University at
Addis Ababa, Ethiopia, is my original work and it has never been presented in any university.
All sources and materials used for this thesis have been duly acknowledged.

___________________________ _____________ ____________

Name of the candidate signature date

i
Letter of Certificate
This is to certify that the thesis entitled, “The Effect of Core Banking on Customer Satisfaction in
Commercial Bank of Ethiopia a Case of piassa branch was carried out by Yanet Duguma, under
the supervision of Dr. MesfinTesfaye (PhD), submitted in partial fulfillment of the requirements
for the degree of Master of Business Administration (MBA) complies with the regulations of the
University and meets the accepted standards with respect to originality and quality

___________________________ _______________ ____________

Name of advisor signature date

Place of submission: Addis Ababa, Ethiopia

ii
 Approval
We, the undersigned certify that we have and hereby recommendation to the St. Mary University
to accept the thesis submitted by Yanet Duguma and entitled The Effect of Core Banking
on Customer Satisfaction in Commercial Bank of Ethiopia a Case of piassa branch for the
fulfillment of the requirement for the award of Master's Degree in Business Administration
(MBA).

Examiners:

Advisor: Name _______________¬¬¬¬¬¬¬¬¬¬______________Signature_________________Date

________¬___

Internal Examiner: Name _____________________Signature ___________ Date _____¬¬_____

External Examiner: Name_ ____________________ Signature____________Date ___________

Chairperson: Name __________________________Signature ____________ Date __________

iii
ACKNOWLEDGMENTS
I thank the Almighty God for Hisgrace throughout my studies. I also thank my supervisor Dr.
MesfinTesfaye, PhD for hispatience, constructive support and guidance throughout this study.

I would also like to extend my deepest appreciation to my family for their unlimited support
throughout the study.

It is my pleasure to give my appreciations for all commercial banks customers to participate in

the study by filling questionnaires and also thanks for banks managers and staff members who
helped me without any hesitation while I was collecting data for the study.

I amgrateful for all my friends, classmates and work colleagues for their understanding and moral
support that iswhat kept me moving forward.

iv
 Table of content

Contents page
Declaration i
Letter of Certificate ii
Approval iii
ACKNOWLEDGMENTS iv
List of figure viii
List of Table ix
ACRONYMS
x
Abstract xi
CHAPTER ONE 1
1.1 Background of the study 1
1.2 Background of the organization 3
1.3 Statement of the problem 4
1.4 Research Questions 6
1.5 Objectives of the study 6
1 5.1 General objective 6
1 5.2 Specific objectives 6
1.6 Significance of the study 7
1.7 Scope of the study 7
3.8 Organization of the study 8
1.9 Definition of Key Terms 8
CHAPTER TWO 9
LITERATURE REVIEW 9
2. Introduction 9
2.1 Basic Concepts of Core Banking and core banking solutions 9
2.2 Core banking solutions 11
2.3 Core banking system products 12
2.4 Core banking service benefits for Customers and Banks. 14

v
2.5 Service Quality and Customer Satisfaction 15

vi
2.6 Measurement of service quality 18
2.7 Challengesof core banking services 19
2.8 Empirical Review 20
2.9 Hypothesis of the Study 22
2.10 Conceptual framework 23
CHAPTER THREE 24
RESEARCH METHODOLOGY 24
3. Introduction 24
3.1 Research Approach 24
3.2 Research design 24
3.3 Sampling Design 25
3 3.1 Study population/ universe 25
3.3 2. Sample Frame 25
3 3.3 Methodsof sampling and Sampling Technique 25
3.4. Data sources 26
3.4.1. Primary Data Sources 26
3 4.2 Secondary Data Sources 26
3.5 Methodsof data Collection 27
3.5.1 Questionnaire 27
3.5.2 Key informant interview 27
3.6 Methodsof Data Analysis and presentation 28
3.7 Reliability and validity of instrument 28
3.8 Ethical Consideration 29
CHAPTER FOUR 31
CHAPTER FOUR: RESULT AND DISCUSSION 31
4.1 Introduction 31
4.2 Response Rate 31
4.3 Background information of respondents 31
4.4 Correlation of variables 33
4.5 Multiple Regression assumption 34
4.4.4 Multi- colliniarity issues and its test 37
CHAPTER FIVE 41

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5. Summary major findings, Conclusion and Recommendations 41
5.1 Introduction 41
5.2 Summary major finding 41
5.3 Conclusion 43
5.4 Recommendations 44
References 46
Annex I Amharic version Questionnaires 52
Annex II Interview questions 58

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List of figure page
Figure 2. 1 conceptual framework 23

Figure 4. 1 core banking service used by bank customers in the last two years 33

Figure 4. 2 Histogram regression of standardized residual dependent and independent

variables35 Figure 4. 3 Normal P- P Plot of dependent variable customer satisfaction. 36

Figure 4. 4 Scatter Plot standardized residuals vspredicted values 36

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List of Table page

Table 3. 1 Reliability Test

29 Table 4. 1 Responded rate of the study

31 Table 4. 2 respondent’s characteristics in sample survey

31 Table 4. 3 Correlation Matrix 34

Table 4. 4 Multi- collininearlity test 37

Table 4. 5 multiple regression output. 38

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ACRONYMS
ATM: Automated Teller Machine
CBE: Commercial Bank of
Ethiopia CBS- Core Banking
Service
ICT: Information Communication
Technology SERVQUAL: Service Quality
SPSS: Statistical Package for Social Science
SWIFT- Society for Worldwide Interbank Financial Telecommunication

Abstract
xi
This study assessed the Effect of Core Banking on Customer Satisfaction in Commercial Bank of

xii
Ethiopia a Case of piassa branch To meet the objective the study used explanatory and
descriptive research design with mixed (qualitative and quantitative) research approach.
Questionnaire was the primary data gathering tools and 368 customers filled up the
questionnaire properly. The data collected were analyzed by using descriptive and inferential
(correlation and regression analysis) statistics through statistical package for social science
(SPSS) version 21. The research finding showed, independent variables responsiveness,
tangibility and reliability have statistically strong and positive relationship with customer
satisfaction. Also empathy and assurance were moderate and positive relationship with customer
satisfaction. Similarly, the regression result revealed that, responsiveness and tangibility were
statistically positive and strong significant impacts on customer satisfaction with the value of β
= 0.665 and 0.516 respectively. Following these, reliability and assurance were statistically
moderate significant effects on customer satisfaction. Further, empathy was statistically
insignificant impacts on customer satisfaction. Moreover, qualitative research finding
confirmed the above facts. The introduction of centralized core banking system helps to save
time, energy and improved service quality and also enhanced customer satisfaction. However,
system/ network interruption was the primary challenge during core banking service provisions.
Electricity problem, poor technology experience of customer, poor customer handling, inaccessibility
of ATM machine and absence of quality services, access, and customer survey and awareness
creation were the other challenge for core banking service users. To improved customer
satisfaction the bank should be used fast service delivery channel and used up- to- date core
banking solutions and also alleviate the challenges that are face core banking service provision.

Key words: core banking, system, solution, customer, customer satisfaction.

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i
 CHAPTER ONE
INTRODUCTION
This chapter introduced the research problems, background of the study, research objectives
and questions, significance of the study, scope of the study, definitions of terms and
finally organization of the paper.
1.1 Background of the study
Today’s businesses environment tends to be rapidly and non- linearly changed due to
technological innovation, diffusion knowledge (the establishment of knowledge based economy)
and unlimited customer demand and its variability. Moreover, the increment of level of
competitions, customers’ needs and expectation rapid change, high rate of technical
obsolescence and shorter product life cycle aggravate it business change. As a result business
owners actively engaged to meet the demand of their customer and to be competitive by
using sophisticated and modern information and communication technology (Kumar &
Phrommathed, 2006). Among those, the banking industry needs attention to retain, attract
and satisfying of their customers within the existed competitive and dynamic
environment. The use of information and communication is paramount significance for
banking sector. Along this, internet is the main medium where all monetary, banking and
business activities take place globally. In addition, banking has transformed into customer
focused technology driven banking with non- stop digital services for customers and
customers’ ability to bank from any branch in once country (Maskell and Malmberg 1999).

In relation to this, Core banking solutions is one of the vital bank applications and its
transformation is driven by the need for responding to internal business imperatives (growth
and efficiency) and external business imperative(regulations and competition). On the other
side, Core banking solutions helps an increasing number of products to cater to different
customer segments and also the number of channels is expanding with time, which is
increasing the complexity of multi- channel banking. This has necessitated investments into
modernizing core banking systems in order to handle an increasing volume of product-
channel transactions and payments (Camgmeni Analysis, 2013)

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Furthermore, Core banking solution technologies facilitate a central shared database support
the entire banking application. Business processes in all the branches of a bank update a
common database in a central server located at data center, which gives a consolidated view
of the bank’s operations. Likewise, branches function as delivery channels providing services
to the customers of the bank. Core Banking Solution is an integrated application that
supports real time, multi banking and multi- channel strategies. The single biggest
achievement of implementing the Core Banking Solution is that each customer is truly the
customer of the Bank and not just the customer of the Branch, where his/her account is
maintained. He/she can go to a branch anywhere in the country and perform a transaction.
In relation to this, banks to be competitive usually upgraded their technology for greater
efficiency, responsiveness, getting platform independent, adding new module to meet new
demand, and for fewer system crashes specifically core banking solutions.

As a result, banking industry worked to obtain the attention of existing and new potential
customers through accessibility and customer center service i.e. (making available the bank to
customers place) to do so mobile banking, internet banking, card banking and CBE birr are
the main ones. In addition, interconnection of all branches through network (core banking) is
also save customer, time, cost, and energy by providing service with closer branches.
Banking industry of the 21st century operates in a complex and competitive environment
characterized by these changing conditions and highly unpredictable economic climate.
Information and Communication Technology (ICT) is at the center of this global change
hence banking industry is entering into new phenomena of unprecedented form of
competition supported by modern information and communication infrastructure.

A strategic use of ICT and core banking solutions helps an organization gain a
competitive advantage through its contribution to the strategic goals of an organization
and/or its ability to significantly increase performance and productivity. Similarly, banking
industry has realized the significance of customer- centered philosophies and is turning to
quality management approaches to help managing their businesses. Many scholars and
service marketers have explored consumers‟ cognitive and affective responses to the
perception of service attributes in order to benefit by providing what consumers need in
an effective and efficient manner (Ravichandran et al., 2010).

2
Banking industry is marked by aggressive competition and ever- changing customer demands.
As a result, banks need to adopt themselves to the changing environment. It is essential for
the banks to adopt appropriate various strategies to merge as the preferred bank of
customers. Timely introduction of various products to suit the diverse needs of customers is
a functional necessity to the banks. Technology gives the cutting edge to come out with
customer centric products and delivery channels in time (Biju, Devandhiran & Sreehari, 2012).

The focus of this research was The Effect of Core Banking on Customer Satisfaction in Addis
Ababa emphasizing on Commercial Banks of Ethiopia(CBE) Piassa branch. To achieve this,
the researcher used survey research methods and also employs both qualitative and
quantitative approaches.

1.2 Background of the organization

Commercial bank of Ethiopia (CBE) established in 1942 as a state Bank of Ethiopia. It
was legally established as a share company in 1963. Following the declaration of socialism in
1974 the government extended its control over the whole economy and nationalized all
large corporations. Organizational setups were taken in order to create stronger
institutions by merging those that perform similar functions. As a result, in 1974, CBE
merged with the privately owned Addis Ababa Bank. Since then, it has been playing
significant roles in the development of the country (Yesuf, 2010). Then Addis Bank and
Commercial Bank of Ethiopia S.C., were merged by proclamation No.184 of August 2, 1980
to form the sole commercial bank in the country till the establishment of private commercial
banksin 1994.

The Commercial Bank of Ethiopia commenced its operation with a capital of Birr 65 million,
128 branches and 3,633 employees. Through time, branches are increased and stretched
across the country. In June 30th 2019 the bank assets reached 711.96 billion Birr and play a
catalytic role in the economic progress & development of the country. Also, CBE has more
than 22 million account holders and the number of Mobile and Internet Banking users also
reached more than
2.5 million and also active ATM card holders reached more than 8 million. CBE combines a
wide capital base with more than 37,894 talented and committed permanent employees and
more than 22,000 outsourced jobs (http:// www.combanketh.et).
3
Due to information communication technology advancement banks extended and diversified
their services such as credit card, Visa and Master Card, mobile and Internet banking
services. Thus, the bank’s customers will enjoy reduced waiting time and a greater choice
of banking channels and services. According to National Bank of Ethiopia, currently there are
17 banks who have acquired core banking solutions that are required to interface with the
National Bank. (http:// WWW.NBE.COM.ET).

1.3 Statement of the problem

In recent business, customer centered services and satisfying of their customers is one of the
major missions for an organization. This is coming from high linkages of sustainability or
competitiveness of business with satisfied customers. When customers are satisfied the
organizations achieve higher sales; profit and market share and vice versa. Customer
satisfaction also leads organizations to gain loyalty and achieve the desired objectives.
Therefore, it is essential for organizations to satisfy their customer’s promptly so that they can
achieve what they plan. Banks as a business organization should provide a great care for its
customers to attract, retain and gain their loyalty (Eskindir, 2016 and Prahalad and
Ramaswamy, 2004).

In relation to this, commercial bank of Ethiopia has been providing many kinds of
banking services since its establishment in 1942. customers of the bank have not being
satisfied by its services due to poor service quality of the banks and absence of
technologies that are facilitate bank services (Dejene, 2019)

In recent time, the advancement of information and internet technology, the National Bank of
Ethiopia (NBE) required all commercial banks in Ethiopia to install a core- banking system in
2012 to integrate the services delivered in its all branch banks and to improve the quality
of its services. During the time The Commercial Bank of Ethiopia CBE successfully
installed core banking solutions in major head office organs and 34 branches in Addis Ababa.
The regulatory bank introduced the system for better transactions, financial records,
including deposits and loans, mortgages, internet banking and expansion of branches among
others. In additions, the implementation of this technology would enable the CBE to
better cater to customers’ requirements in efficient, cost effective and secure manner.
Through time core banking
4
technology application upgraded and expanded its services hence the CBE would also offer
additional services, such as internet banking and mobile banking. To this effect, Commercial
Bank of Ethiopia (CBE) chose the Swiss IT vendor, Temenos Group to enhance its core
banking system (Addis Fortune, 2018),

In this information communication technology era, commercial Banks of Ethiopian core

banking service are not that much advanced and little care about their customers (Dawit,
2017) This comes from poor technological changes in the bank and forced to use more
obsolete and traditional technologies, these are cause for dissatisfaction and switching
customers (Eskindir, 2016). This means the banks are not satisfying their customers
enough due to various factors in which using traditional technologies is among them.
Levesque and McDougall (1996) have confirmed and reinforced the notion that consistent
poor customer experience as a result of poor service quality leads to a decrease in the levels
of customer satisfaction and the chances of further willingness to recommend the service (i.e.,
word- of- mouth advertising or referrals) is lessened. This is true for commercial bank of
Ethiopia, which is the leading bank in the country.

On the other hand, the implementation of core banking solutions or technology raised
efficiency, quality of process, optimal compatibility and utilization of the functionality, ensured
better risk management with good security and other related issues (Finacus Solutions Pvt Ltd,
2012). Further, the application of this technology is believed to have many contributions for
the bank.

Also, rapid change of customer’s needs and their poor satisfaction, the occurrence of gradual
or poor technology installing/solution of commercial banks of Ethiopia are the primary motive
to conduct this study.

Hence, the researcher identified level of contribution of this technology on satisfying the
customers of the bank.

5
1.4 Research Questions
 What is the impacts tangibility dimension of core banking service quality on
customer satisfaction?
 What is the impacts reliability dimension of core banking service quality on
customer satisfaction?
 What is the impacts responsiveness dimension of core banking service quality on
customer satisfaction?
 What is the impacts assurance dimension of core banking service quality on
customer satisfaction?
 What is the impacts empathy dimension of core banking service quality on
customer satisfaction?
 Which service quality dimensions have greater influence on customer’s satisfaction?
1.5 Objectives of the study
1.5.1 General objective

The general objective of the study was to assess the effects of core banking on customer
satisfaction in CBE (in case of Piassa branch)

1.5.2 Specific objectives

The specific objectives of the study are

1. To assess the impacts of tangibility dimension of core banking service quality

on customer satisfaction in CBE.
2. To assess the impacts of reliability dimension of core banking service quality
on customer satisfaction.
3. To assess the impacts of responsiveness dimension of core banking service quality
on customer satisfaction.
4. To assess the impacts of assurance dimension of core banking service quality
on customer satisfaction.
5. To assess the impacts of empathy dimension of core banking e service quality
on customer satisfaction.

6
 6. To identify which service quality dimensions have greater influence on
customer’s satisfaction.

1.6 Significance of the study

This study was greatly important for bank to assess whether its application of core banking
service enhance the level of customer satisfaction.
Moreover, the study will have the following significances:
 Identifies issues related to the application of core banking and which service
quality dimensions are more important for customer satisfactions.
 Identify customer perception about core banking service and what actual
customer satisfaction look likes in the bank.
 The study helps to enhanced customer satisfaction in the bank.
 Banks can got better information from this research finding regarding with
core banking application and customer management
 Banks, marketing and operation manager and technologies can get an input to
take appropriate measures fromthe study.
 This research used asa base point for further studies in the related issues.

1.7 Scope of the study

Delimitation (scope) addresses how a study is narrowed in scope, that is, how it is bounded.
Limit your delimitations to the things that a reader might reasonably expect you to do but that
you, for clearly explained reasons, have decided not to do” (Dawson, 2007). In relation to this,
the study delimitate with concept, time and place. Geographically, the scope of the study will
limit core banking services in Commercial bank of Ethiopia (CBE); North Addis district; Piassa
branch. The researchers select this branch purposively, because this branch located on
the center of the city and accessible to the researcher, which make data collection processes
much easier. In terms of concept; the scope of this focuses on the assessing of core banking
service and their diminutions (tangibility, reliability, responsiveness, empathy and
assurance) on customer satisfaction.

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1.8 Organization of the study
This research organized in five chapters, chapter one, discussed the introductory part,
background of the study ,background of the organization, statement of the problem, research
questions, objectives of the study, significance of the study and scope of the study. The next
chapter, chapter two discussed the review of related literatures of different scholars .chapter
three will deal with methodologies that will be used in conducting the study, in chapter four,
the data the collected data was presented, analyzed and interpreted. The fifth and the last
chapter, wasdiscussed research finding, conclusions and recommendation of the study.

1.9 Definition of Key Terms

Core banking: - is refers to a centralized online real time exchange banking (Wikipedia).
Core banking solutions (CBS):- is a combination of an application software and network
devices.
Customers’ satisfactions: - refers to a person’s satisfaction with a product, a service, or a
supplier (Terpstra et al., 2014).
Service quality: - is the “the difference between customer expectations and perceptions of
service (Parasuraman, 1988).

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 CHAPTER TWO
LITERATURE REVIEW
2. Introduction

This part of the study discusses the concepts core banking and core banking solution in
relation with customer satisfaction. Moreover, this chapter discuses and presents the
theoretical, conceptual and empirical review of core banking with customer’s satisfaction
and suited in the study.

2.1 Conceptual and theoretical review

2.1 Basic Concepts of Core Banking and core banking solutions
As it can be seen various research and scholars literature Core Banking concepts stands for
"centralized online real- time electronic banking. Core banking refers to the services of
networked branches that allow to their clients to access their funds and to perform
simple transactions from any place. In broader sense, it refers to the exchange, upgrade
and outsourcing core banking system integrated into the package of software
applications for processing and posting the transactions, as well as managing the
accounting processes. The basis of this system is deposits and loans. In order to meet their
clients’ needs banks use core banking applications and also manage every change by the
help of centralized data center, which contains all necessary data of clients and their
accounts. In addition, every banks collect all transactions fromindividual branches with the
help of technology or connectivity (Kreća and Barać, 2015 and Revathy, 2004).

Core banking is a facility provided by banks in which a person having an account in one
branch can operate his account in another branch (Kaur, 2012). This has become possible
because each account holder is given a specialized computerized and unique account number.
In simple terms, CBS is a type of banking in which a person who opens a bank account in a
particular branch of a bank will be a customer of the bank rather than being a customer of a
particular branch. Core banking is all about knowing customers' needs; providing them with
the right services at the right time through the right channels. Moreover, core banking
system is providing various alternative delivery service channels, which reduce cost and time

9
taken for the transactions and

1
also intended to improve banks operational effectiveness (Rahman and Qi, 2016 and Essayas,
2016).
Nowadays, most banks use core banking applications to support their operations and the
entire bank's branches access applications from centralized data centers. This means that
the deposits made are reflected immediately on the bank's servers and the customer can
withdraw the deposited money from any of the bank's branches throughout the world.
These applications now also have the capability to address the needs of corporate
customers, providing a comprehensive banking solution. In a core banking concept all
the systems of the bank are connected to the central office by means of a connectivity which
may be either a leased line or a dial up line (Rahman and Qi, 2016).

A few decades ago it used to take at least a day for a transaction to reflect in the
account because each branch had their local servers, and the data from the server in each
branch was sent in a batch to the servers in the data center only at the end of the day.
Normal core banking functions will include deposit accounts, loans, mortgages and
payments. Banks make these services available across multiple channels like ATMs, Internet
banking, and branches (Rahman and Qi, 2016).

In relation to this, there are many providers around the world that sell their core banking
products to the banks, such are FIS, Temenos, Oracle Financial Services Software, Infosys
Technologies, Fiserv, TCS FS, SAP, Polaris and many others. These products are called core
banking solutions and some of the operations they provide are recording transactions,
maintaining savings books, calculating interest rates for loans and deposits, keeping the
customer’s data, balance of payments, etc. Shortly, the CBS (Core Banking Solution) refers
to connecting the branches, which allows clients to manipulate their funds, independently of
the branch in which these are opened (Kreća and Barać, 2015).

As a result, Banks aim to reduce costs, enhance efficiencies and guarantee customer
retention with use of technology (Turnbull, 2007). In banking, the relationships between
institutions and their customers are critical (Seybold and Foss, 2001) and technology such as
ATMs, POS, SMS Banking, Online Banking and Mobile Banking is the mediator in that
interaction. Technological advances enable close and long- termrelations with customers
(Chairlone, 2009). For these new

1
generation banks the technological gene is called Core Banking Systems (CBS). CBS of a
bank, an engine to facilities appropriate service for customer. Core banking system (CBS) has
been effective in bringing about a radical change in the field of banking. CBS simplify their
banking operations by allowing them to conduct common frequently used banking
transactions without visiting bank’s branches, saving a lot of time. The platform where
communication technology and information technology are merged to suit core needs of
banking is known as Core Banking Solutions.
2.2 Core banking solutions
The advancement in technology, especially Internet and information technology has led to new
ways of doing business in banking. These technologies have cut down time, working
simultaneously on different issues and increasing efficiency. The platformwhere
communication technology and information technology are merged to suit core needs of
banking is known as core banking solutions. Here, computer software is developed to
perform core operations of banking like recording of transactions, passbook maintenance,
and interest calculations on loans and deposits, customer records, balance of payments
and withdrawal. This software is installed at different branches of bank and then
interconnected by means of communication lines like telephones, satellite, internet etc. It
allows the user (customers) to operate accounts from any branch if it has installed core
banking solutions. This new platform has changed the way banksare working(Rahman and
Qi, 2016).

Core Banking Solution (CBS) is centralized Banking Application software. It has several
components which have been designed to meet the demands of the banking industry.
Core banking solution is supported by advanced technology infrastructure. It has high
standards of business functionality. Core Banking Solutions allows or helps the banks to
offer a multitude of services both at the branches and through digital medium bringing about
a transformation in the bank customer interactions. In other words, Core banking solutions
are banking applications on a platform enabling a phased, strategic approach that is
intended to allow banks to improve operations, reduce costs, and be prepared for growth
(Abbate, 1999 and Kreća and Barać, 2015). This core banking application is centrally
accessed by the branches and helps to provide efficient services and it helps to reach bank
service for every individual by the use of technology. As they are networked, customers can
1
access their accounts and perform certain transactions

1
from any of the bank’s branches. Broadly speaking, the customer is no longer a customer of
the branch but a customer of the bank. Core banking solutions (CBS) is a combination
of an application software and network devices. In Core banking solutions there is a
central data center and it has large data housing infrastructure that provides high band width
access to its clients such as, any services, networking devices, firewalls and other related
equipment.

Gartner, (2011) defines a core banking system as a back- end system that processes daily
banking transactions, and posts updates to accounts and other financial records. Core banking
systems typically include deposit, loan and credit- processing capabilities, with interfaces to
general ledger systems and reporting tools. Strategic spending on these systems is based on
a combination of service- oriented architecture and supporting technologies that create
extensible, agile architectures
The implementation of core banking solutions facilitates the integration of bank's services
with installed technologies. This reduced risk that can result from manual data entry and
out- of
- date information, increases management information and review, and avoids the potential
disruption to business caused by replacing entire systems.

2.3 Core banking system products

As a result of technological advancement and unlimited demands of customer core banking
system product increased time and space. Core banking products and services are methods
used by banking organizations to carry out their transactions at a center through centralized
banking services. These services include Automatic Teller Machines (ATMs), Electronic Fund
Transfer (ETF), mobile banking, online banking, Electronic Data Interchange (EDI) and
telecommunication services (Negalign Mamo, 2016). The major and well known core banking
system product discussed below.
2.3.1 Automated Teller Machines (ATM)
It is a computerized telecommunications device that provides the clients of a financial
institution with access to financial transactions in a public space without the need for a
cashier, human clerk or bank teller. Using an ATM, customers can access their bank accounts
in order to make cash withdrawals, credit card cash advances, and check their account

1
balances as well as purchase prepaid cell phone credits by the helps of their owns personal
identification number

1
(PIN) ( Thompson, 1997),

2.3.2 Point- of- Sale Transfer Terminals (POS)

It is a system of sale transaction (sell goods or services) with computer, a cash register and
other equipment or software. Indeed, sale and payment transaction data can be captured
immediately by the computer system electronically. The system allows consumers to pay for
retail purchase with a check card, a new name for debit card. This card looks like a credit
card but with a significant difference (Malak, 2007).
2.3.3 Internet Banking
Internet banking, sometimes called online banking or web banking and it is outgrowth of PC
banking. Internet banking is a system that enables bank customers to access accounts
and general information on bank products and services or perform account transactions
directly with the bank through a personal computer or mobile using the internet as the
delivery channel. Further, an internet banking customer accesses his or her accounts from
browser software that runs Internet banking programs resident on the bank’s World Wide Web
server ( Egland, et al., (2008).
2.3.4 Mobile Banking
Mobile Banking refers to provision and availing of banking and financial services with the
help of mobile telecommunication devices. It is best described as the newest channel in a
banking to provide a convenient way of performing banking tractions using mobile phones or
other mobile device. With mobile technology banks can offer a variety of services to their
customers such as doing funds transfer while traveling, receiving online updates of stock price
or even performing stock trading while being stuck in traffic. Smart phones and 3G
connectivity provide some capabilities that older text message- only phonesdo not (Shan,
2006 and Singh and Nayak, 2012)
2.3.5 Telephone Banking
Telephone banking is a service provided by banks or financial institution, which allows its
customers to perform transactions over the telephone without the need to visit a bank branch
or automated teller machine offer the service on a 24- hour basis (Vila et al., 2013).
Most

1
telephone banking services use an automated phone answering system with phone keypad
response or voice recognition capability. To guarantee security, the customer must first
authenticate through a numeric or verbal password or through security questions asked by a
live representative. Most financial institutions have restrictions on which accounts may be
accessed through telephone banking, aswell asa limit on the amount that can be transacted.
2.3.6 PC- Banking
A banking service enables for bank customers to access their account information and
perform certain bank transactions using a personal computer and a modem. It has become a
popular method for people to manage money and pay bills using online server to log in to
their account and pay bills, transfer money between accounts and reconcile check ledgers.
2.3.7 Credit and Debit Card
It is a normal card whereby a holder is able to purchase goods, without having to pay cash
immediately. Credit card is built around revolving credit principle. Generally, a limit is set to
the amount of money a cardholder can spend a month using the card. At the end of every
month, the holder has to pay a percentage of outstanding (Gordaon E., and Natarajan, K.,).
Debit card is used for purchasing goods and services or for obtaining advances for which
payments is made fromexisting funds in bank accounts.
2.4 Core banking service benefits for Customers and Banks.
Core banking and core banking solutions has a significant advantage or benefit for customer
in bank industry. Among those, the introduction of new delivery channels for customers, by
banks. Internet Banking, Mobile Banking, Mobile Automated Teller Machines (ATMs), multi-
functional ATMs, shared ATM services; quick and immediate funds transfer and smart
card usage opportunity and financial inclusion are the major once (Revathy, 2004).

Other benefits of customer in the implementation of core banking solution are

(1)Availability of electronic delivery channels like ATM, net banking and mobile banking,
providing customers alternate channels outside branch working hours(2) Quicker and
efficient fund transfers for customers (3) Customer can conduct their banking transaction
fromany branch of their bank(4) Ability to offer improved services to the customers of the
bank by the use of centralized database which provide real time information to the
customers of the bank (5) Introduction of new product by banks which are useful to their

1
customers like online bill payment (6)

1
Customer can operate his account fromany of the branch of the bank (7) More service
channels can be made available to the customer (8) Customer gets immediate credit if the
transaction is between the branches of the bank. Even extension counters can provide all
services to the customer (9) Customer gets full attention and service satisfaction at the
branches as the branches are freed from all back office functions, clearing functions and
almost all accounting functions (10) customer can get SMS alerts on his mobile or e- mail
alerts through net for transaction taking place in hisaccount (Revathy, 2004).

On the other hand, Core banking and core banking solutions are paramount advantage
for banks such as (1) there is centralized transactions and accounts, this depicts real
picture of financial position and situation of the bank and help timely and effective decision
making (2) used for centralized product control & monitoring; specifically, interest rate
modifications, product modification and interest application can be done centrally from one
place for all the branches(3) Introduced technology based services centrally(4) Centrally
managed customer account or in any branch services are functioned (5) helps to prepared
centralized report and up
- dated decision making through connectivity (6) help for Centralized System Administration;
this helps also growth opportunities, efficiency gains and risk mitigation for aging
systems(Revathy, 2004 and KULKARNI P. R. 2012).

Further, core banking solution implementation increased bank revenue since you will be able
to reach more customers, improved customer satisfaction since services will be readily
available and fast in their provision, cost reduction because it will not have to incur heavy
wage bill, reduced space requirements and hence reduced rent or lease payments. Other
benefits include increased efficiency since automation enables you to do more with less input,
increased level of output and employee satisfaction and motivation since they will not
have to toil really hard. Larger market share through attraction of new customers and
customer loyalty may be gained (Czerniawska and Potter, 2000).

2.5 Service Quality and Customer Satisfaction

As it can be seen many researchers literature service quality and customer satisfaction had
positive relationships and also tried to differentiate distinction between service quality and
customer satisfaction (Bitner, 1990; Bolton & Drew, 1991; Parasuraman et al., 1988).
1
This

2
differentiation is important for firms to concentrate on enhancing their capability to satisfy
customers through providing high service quality. One that is commonly used defines service
quality as the extent to which a service meets customers’ needs or expectations (Lewis and
Mitchell, 1990 and Wisniewski and Donnelly, 1996). Service quality defined as the difference
between customer expectations of service and perceived service. If expectations are greater
than performance, then perceived quality is less than satisfactory and hence customer
dissatisfaction occurs (Parasuraman et al ., 1985; Lewisand Mitchell, 1990).

According to Mesay (2012) and Clemes, (2008) service quality leads to customer satisfaction
or to achieve high level of customer satisfaction, high level of service quality should be
delivered by the service provider. As a result, service quality improves; the probability of
customer satisfaction also increases. However, service quality is one of the dimensions
to satisfied customers or one of the potential to influence future quality perception. Indeed,
service quality and customer satisfaction concept discussed in details to understand the
issues.

Customers is any individual who is able to figure out and do processing of account, checking
account and all other capable person who operate by banks (Wang and Splegel, 1994). In
relation to this customer has a significant role in business operation and the establishment of
effective communication between customers and businesses. Sometime consumers are
considered as a customer; hence, Businesses obtain better profitability, which stems from
satisfying consumers (Elfarmawi, 2019).

Satisfaction is derived from the Latin satis (enough) and facere (to do or make), hence
satisfying products and services have the capacity to provide what is being sought to the
point of being "enough." two related words are satiation, which loosely means enough up to
the point of excess, and satiety, which can mean a surfeit or too much of enough, as if to say
that too much is necessarily undesirable. These terms illustrate the point that satisfaction
implies a filling or fulfillment (Masrujeh 2009).

According to Kotler (2000), satisfaction is a person’s feeling of pleasure or

disappointment resulting from comparing a product’s perceived performance (or outcome) in
relation to his or her expectation. Kotler (2006) again defined customer satisfaction by

2
giving details on the attributes of a highly satisfied customer. According to him, a highly
satisfied customer stays

2
loyal, longer, and buys more as the company introduces new products and upgrades existing
products; talks favorably about the company and its products, pays less attention to
competing brands and is less sensitive to price, offers service or product ideas to the
company and costs less to serve himthan new customers because transactions are routine.

Similarly, satisfaction is the degree that actual performance of a company satisfies customer
expectations, meaning the performance of a company satisfies customer expectations, the
customer will have sense of satisfaction; otherwise he/she will be dissatisfied (Abdoli &
Fereidunfar, 2008). Also, customer’s satisfaction is fulfilling their needs and wants as means
for the achievement of organization’s objectives. This underlying motivation on customer focus
is clear mission to create value for customers, stay profitable and gain desired performance
(J. Munaiah, 2017).

On the other hand, service quality defined as “the most powerful competitive weapon”,
(Haghighi et al, 2003). The customers expect two desirable and sufficient levels of services
that are separated by the tolerance zone of the customer (Baglou & Zomorodpoush,
2009). According to interactive views, service quality is the outcome of customer and the
service- provider and organizational quality (Shahriari, 2006). In addition, Parasuraman (1988)
service quality is the “the differences between customer expectations and perceptions of
service”. According to him, measuring of service quality as the difference between
perceived and expected service was a valid way and could make management to identify
gaps to what they offer as services. Similarly, Parasuraman et al., (1988), “service quality
involves an attitude and is an evaluation over several service encounters over time”. Also,
service quality is a global judgment, or attitude, relating to the superiority of the service,
whereas satisfaction is related to a specific transaction. Satisfaction is a post consumption
experience which compares perceived quality with expected quality, whereas, service quality
refers to a global evaluation of a firm's service delivery system.”

Furthermore, Oliver (1981) distinguished customer satisfaction from service quality in his
definition of attitude as “the consumer’s relatively enduring affective orientation for a product,
store, or process while satisfaction is the emotional reaction following a disconfirmation
experience which acts on the base attitude level and is consumption- specific” Furthermore,

2
Auka, 2012) also stated that high quality of service will result in high customer satisfaction
and increase loyalty.

Parasuramanet. Al (1985) and Zeithamlet., al (1990) noted that the key strategy for the
success and survival of any business institution is the deliverance of quality services to
customers. The quality of services offered will determine customer satisfaction and attitudinal
loyalty.

Likewise, service quality and customer satisfaction interrelated concepts and one influence the
others. Service quality has a strong correlation with customer satisfaction and also a it is
a strategic component and marketing plan of an organizations ( Spathis et al., 2004).
Also, service quality indicates the extent to which customers' perceptions of service meet
and/or exceed their expectations or the differences between customer expectations and
perceptions of service (Zeithaml ,1990 and Parasuraman, 1988).

Service quality can be extended to the overall evaluation of a specific service with ten service
quality dimensions: tangibles, reliability, responsiveness, competence, courtesy, credibility,
security, access, communication and understanding/knowing the customer (Parasuraman et al.,
1985, 1988). These ten dimensions define into five to measure customer’s perceived value of
service quality, which is known as SERVQUAL. This SERVQUAL adopts the meeting
expectations paradigm to measure service against firms (Ladhari, 2009) Parasuraman et al.,
1988).

2.6 Measurement of service quality

The SERVQUAL scale which is also known as the gap model by Parasuraman, (1988) has been
proven to be one of the best ways to measure the quality of services provided to customers.
Also SERVQUAL scale is a principal instrument for assessing customer service quality
(Parasuramanvd, 1991; Parasuraman et al., 1988).
Researchers have advised the customization of existing service quality scales depending on
the industry to which they are applied as retail industry (Schneider & White, 2004). In
addition, regarding to service quality dimensions emerged across a variety of services are
important to measured effectively. In the context of this study, five service quality
dimensions (three original

2
and two combined dimensions) are used. These are:-
(a) Tangibility: The physical facilities, equipment, infrastructure and the appearance of the
staff/ personnel
(b) Reliability: The dependability and accuracy of the service provider regarding with
delivery, service provision, problemresolution and pricing.
(c) Responsiveness: The ability to know and willingness to cater to customer needs or the
ability to respond customer request, questions, complaints and problems.
(d) Assurance: The ability of the staff to instill confidence and trust in the company
or knowledge and courtesy of employees and their ability to inspire trust and confidence
or it focused competence, courtesy, credibility and security.
(e) Empathy: The ability of the staff to provide a caring service to customers
through quality services, skillfully handling of conflicts and efficient delivery of services
resulted in satisfied customers for long term benefits or it includes access, communication,
understanding the customer.
The last two dimensions (assurance and empathy) contain items representing seven
original dimensions:- communication, credibility, security, competence, courtesy,
understanding/ knowing customers and access; that did not remain distinct after the two
stages of scale purifications, therefore while SERVQUAL hasonly five distinct dimensions,
they capture facets of all 10 originally conceptualized dimensions. These service quality
dimensions helps to reduced service quality measurement issues through attention
centered on the determinants of perceived service quality with particular emphasis on the
service delivery process.
2.7 Challenges of core banking services
Core banking solution help to facilitate bank service, among those it reduce in cost and
improve efficiency, enabling adoption of new customer centric strategies, enhancing business
banking and personalized service and incorporating new and increased business. However,
this are challenging because of deferent factors. Challenges faced in the process of core
banking system development include agreeing on what are actually necessary, security
issues, empowering employees to use the new system, vendor capabilities and credentials,
risk of the software capability to meet requirements and expectations, unavailability of the
diverse skills

2
required and data migration. Lack of suitable legal and regulatory framework for Core banking
and electronic payment is another impediment for the adoption of new technology in the
Ethiopia banking industry Negalign, 2016)

On the other hand, the security issue is of special concern in the Banking Industry, as
banking is highly based on trust from its customers. Hence, the risk of hackers, denial of
service attacks, technological failures, breach of privacy of customer information, and
opportunities for fraud created by the anonymity of the parties to electronic transactions
all have to be managed. Depending upon its nature and scope, a breach in security can
seriously damage public confidence in the stability of a financial institution or of a nation's
entire banking system. Hence, by introducing the appropriate security measures and putting
security concerns at ease, the Banking Industry might be able to attract the segments
among consumers who previously were not inclined to use core banking. Furthermore, it is
also in the banks’ own interest to improve security, as digital fraud can be costly both in
financial losses, and in terms of the damage it doesto the brand of the bank in question
(Broderick and Vachirapornpuc, 2002).
2.8 Empirical Review
In relation to the study, some researchers were conducting a study before. Among those
Endalkachew, (2013) conducting research on Assessing the Impact of Core Banking and
Service Quality on Customer Satisfaction in Commercial Bank of Ethiopia focused on Bishofftu
Branch. The researcher used stratified sampling technique and also employed
questionnaire for data collection. The collected data was analyzed using descriptive
statistics and inferential Statistics. Based on their research findings, there was significant
relationship between all service quality dimension and customer satisfaction in commercial
bank of Ethiopia. At the same time, there was significant relationship between core banking
and customer satisfaction. The three service quality dimension (reliability, assurance,
empathy) have positive and significant impact on customer satisfaction at the bank.
However, the rest two dimensions (responsiveness and tangibility) have no impact on
customer satisfaction Core banking also have positive and significant impact on
customer satisfaction.

Similarly, Ateneh (2018) assessed the effects of the five service quality dimension on

2
customers’ satisfaction in Commercial Bank of Ethiopia, South Gondar Zone, Debre
Tabor

2
Branch. Results showed that four service quality dimensions which include tangibles, reliability,
responsiveness and assurance have significant positive effect on customers’ satisfaction.
However, empathy was found to have positive and insignificant effect on customers’
satisfaction in the study area.

In addition, research conducted by (Yared, 2018) on assessing the effect of core banking on
service quality and customer satisfaction under the emphasis on North Addis Ababa district.
The researcher used questionnaire and interview for data collection. This study mainly
employed a descriptive survey method. The necessary data are collected through primary and
secondary sources. The research finding indicates that, implementing modern core banking
systems has a contribution to the quick and fast service delivery and also banks need to be
mindful of the challenges associated with core banking deployments.

Again, the research conducted by Dejene (2019) focused on assessing the impact of core
banking on customer satisfaction In CBE in Bishoftu branch in Commercial bank of Ethiopia.
The researcher was used descriptive research design and the data were analyzed using
descriptive statistics to meet the research objectives. The result showed that, there were
a significant relationship between core banking and customer satisfaction. A volatile
economic climate, ever increasing competitiveness and continuous pressure to meet
regulatory requirements demand a flexible, consistent, secured, and cost- effective CORE
banking systems environment. Moreover, new age business environment is very dynamic and
undergoes rapid changes as a result of technological innovation, increased awareness and
demands from customers. Core banking system is providing various alternative delivery
service channels, which reduce cost and time taken for the transactions and also intended to
improve banks operational effectiveness.

Further, Tizazu (2012) conducted the study on the Effect of Customer Service Quality on
Customer Satisfaction in Selected Private Banks. The researcher used survey research
method focused on service quality in relation to customer satisfaction in commercial bank of
Ethiopia. The research finding shows that, there is positive and significant relationship
between tangibility, reliability, assurance, and empathy and customer satisfaction. However,
the results also indicate that, there is a negative and insignificant relationship between
responsiveness and

2
customer satisfactions.
The research gap among the above study regarding with the impacts of core banking service
on customer satisfactions were the previous studies not clearly indicate five service
quality measurement with appropriate hypothesis test or an impact measurements. This
study try to full fill the research gapes and investigate the impacts of core banking on
customer’s satisfactions, through its main service quality dimensions.

Other global research studies in relation with the service quality and its influence on customer
satisfaction are discussed below. Mohammad and Alhamadani (2011) and Munusamy, et al.,
(2010) conducted a study on five dimensions of Service quality (tangibility, reliability,
responsiveness, assurance and empathy) with customers satisfaction. According to
Mohammad and Alhamadani(2011) research finding all service quality dimensions
(tangibility, reliability, responsiveness, assurance and empathy) have a positive and
significant effect on customer satisfaction whereas Munusamy, et al., (2010) research result
shows that three service quality dimensions (assurance, empathy, and responsiveness) have
positive and insignificant effect on customer satisfaction. Tangibility hasa positive and
significant impact on customer satisfaction. However, reliability hasa negative and
insignificant effect on customer satisfaction.

In additions, Mesay, (2012) research finding revealed that, there is a significant positive
relationship between the five dimensions of service quality with customer satisfaction. Among
those, empathy has strong correlation with customer satisfactions; on the other hand,
reliability has weakest correlation with customer satisfactions. This indicates that five
service quality dimensions (tangibility, reliability, responsiveness, assurance and empathy)
current status or organization implementing capability with the issues are determine the
result of its relationship and impacts.
2.9 Hypothesis of the Study

H1: Tangibility dimension of core banking service has statistically significant impact on
customer satisfaction in CBE.
H2: Reliability dimension of core banking service has statistically significant impact on customer
satisfaction in CBE.
H3: Responsiveness dimension of core banking service has statistically significant impact on

2
customer satisfaction in CBE.
H4: Assurance dimension of core banking service has statistically significant impact on
customer satisfaction in CBE.
H5: Empathy dimension of core banking service has statistically significant impact on customer
satisfaction in CBE.

2.10 Conceptual framework

The conceptual framework of study design based on the review of theories, empirical studies
and also comply the independent and dependent variables of the study. Moreover, this
conceptual framework summarized from reviewed literature and postulated core banking
service and customer satisfactions. As it can be seen the relationships of independent and
dependent variables i.e., the core banking service or all independent variables service quality
measurement dimensions (tangibility, reliability, responsiveness, assurance and empathy)
degree of influence on customer satisfaction clearly indicate in this study.

Independent variable Dependent variable

Core banking Customer Satisfaction

dimension

Reliability

Assurance

Responsiveness

Empath

Figure 2. 1 conceptual framework

y

3
 CHAPTER THREE
RESEARCH METHODOLOGY
3. Introduction
This chapter deals with the research methodology; it is a plan of action or a way to
systematically solve the research problem. Under this topic, research design and approach,
target population, sampling design and sample size, methods of data collection and analysis,
validity and reliability of the instrument and ethical consideration are discuss in detail.
3.1 Research Approach
This study used both qualitative and quantitative research approach. The qualitative method
used to find out a depth investigation, which is not possible to analysis by quantitative
methods. Whereas quantitative approach enables to used numeric explanation, so it helps
to breadth research findings. By using both methods together, the researcher substantiated
the breadth and depth of the findings (Saunders and Lewis 2018). Therefore, the researcher
applied mixed approach in order to conduct this study.

3.2 Research design

Research design is a general plan of how the researcher goes about answering the research
questions. In other words, it the plan or overall research program that helps the researcher
obtain answers to the research questions (Kombo and Tromp, 2014). In order to achieve the
study objectives, the researcher carryouy survey research types and also used descriptive and
explanatory research design based on the ground that it helps is to examine the impact of
core banking on customer satisfaction in CBE (in case of Piassa branch).

The explanatory research designed depicts determining causal relationship between core
banking and customer satisfaction in CBE whereas Descriptive research design method is

3
an

3
advantageous to pertinent to collect details of data from many respondents, it describes what
the reality or what actually exist within a situation such as current practices, progresses and
situations of different aspects of the research (Creswell, 1994).

3.3 Sampling Design

In this study, sample size and sampling design determined in the process of selecting
samples. The researcher determined, the study population, the sample frame, sampling
technique and then selecting the sample to examine the impact of core banking on
customer satisfaction in CBE.
3.3.1 Study population/ universe

According to Davis, (2000) population is defined as “the complete set of units of analysis that
are under investigation, while element is the unit from which the necessary data is collected.
The target population has the elements, time, and geographical boundaries showing that the
scope of study and the research objective play a major role in the definition of the target
population (Bougie & Sekaran, 2013). This study examined the impact of core banking on
customer satisfaction in Addis Ababa CBE. CBE had four districts in the country fromthose
the study focused on North Addis district, Piassa branch only. Because of high population
and shortage of time are the major reason to select this branch. As a result the researcher
easily managed data collection processes. The major respondents of the study are commercial
banks of Ethiopia customers. Moreover, the study covers Piassa branch workers as
interviews respondents.
3.3.2. Sample Frame

In order to ensure the validity of the study taking sufficient sample size and utilizing sampling
techniques are given special concern. The sample frame of the study focused on the impacts
of core banking on customers in North Addis district; Piassa branch only. The total
number of customer in Piassa branch is 14,920, which are the total number of current
account holder customers are (503) and that of saving account holders are 14,417 (Branch
report, October 31, 2019) Also, for the purpose of interview one Piassa branch manager and
one expert who are working in customer’s management are included in the study.

3
3.3.3 Methods of sampling and Sampling Technique

The researcher used both probability and non- probability sampling techniques to conduct this
study. By using non probability sampling (purposive sampling techniques) the researcher
select study area which is researcher select Piassa branch because the branch located on the
center of the city and accessible to the researcher, which make data collection processes
much easier. Also, under core banking, one is not a customer of a branch but is considered
as customer of the bank but for the purposes of this study Piassa branch selected purposively
to assess the impact of core banking on customer satisfaction.

On the other hand, the researcher used probability (simple random) sampling technique to
get information from Piassa branch customer and its total number were 14,920 in Piassa
branch.
According to (Kumar 2002), the optimum sample size is one of fulfilling the requirements of
efficiency, representativeness, flexibility and reliability while taking into consideration the
constraints of time and cost. As a result of this, to determine the sample size take in to
account the acceptable confidence level and true representation of sample. Hence, for the
purpose of this study Yamane (1967) formula employed with 95% confidence level with 5%
margin error.

Where,

N= population size (14,920) these are total number of Piassa branch bank customer

n= sample size

e= sample error=(0.05)

= 389 this are to total number of the sample.

3.4. Data sources

To acquire the relevant data the researchers used both primary and secondary data source and also
apply variousdata gathering tools and techniques.

3.4.1. Primary Data Sources

3
To conduct the study the researcher employed both close and open ended questionnaires,

3
unstructured interviews to assess the impacts of core banking on customer satisfaction in the
study area.
3.4.2 Secondary Data Sources

To ensure the purpose of this research, the researcher collect relevant secondary data source
from published and unpublished materials; those are professional journal articles, thesis, report
and different research books. This helped the researcher to cross check and validity of
the results of primary data.

3.5 Methods of data Collection

For the purpose of data triangulation, the researcher employed both primary and
secondary data source by using various data gathering tools and techniques. The
primary data was collected through questionnaire, interview and document review, whereas
the secondary data collected through document review.
3.5.1 Questionnaire

For this research the researcher used questionnaire to get required information and also
apply semi- structured (both an open- ended and closed end) type of questionnaire. The
questionnaire has two parts; the first part focuses on demographic information of
respondents, while the second part is emphasizing on core banking service and its customer
satisfaction practices with five dimensions of service quality such as tangibility, reliability,
responsiveness, assurance and empathy. The questionnaires are prepare in English and
Amharic then the prepared questionnaires distributed for 10 bank service providers and 10
customers as a pilots test to improve the answerability of the questionnaires and used the
feedback properly. Finally, the researchers distributed 389 questionnaires to gather
relevant data from Piassa branch customer and analyze qualitatively and quantitatively to
confirm its postulate.
3.5.2 Key informant interview

The Interview parts of this study focused on a series of open ended questions related to core
banking practices in CBE in Piassa branch and its customer satisfaction. The open- ended
natures of the questions try to depict current status of core banking solution and
customer satisfaction with its overall service. To get relevant information the researchers

3
will use one

3
Piassa branch bank manager and one expert who are working in customer management area
as an informative interview. This is carryout with appropriate guideline and it also helps
to triangulating the finding of the study. During interview the interviewer will use sound
recorder to collect information accurately.

3.6 Methods of Data Analysis and presentation

After collecting raw data the researcher analyzed the data quantitatively (inferentially) and
qualitatively (descriptively). The open- ended questionnaires, demographic of the respondents
and interview parts of the study discussed descriptively and present with words, frequencies,
percentage, table, figure and means by the help of statistical package for social science
(SPSS version 21), whereas the quantitative data presented by using ordinary least
squares regression model and Pearson correlation. To this effect the researcher used 5
point Likert scale, with choices from “strongly disagree” to “strongly agree” and analysis
inferentially. Moreover, the researcher used Pearson correlation to identify relationship that
exists between dimensions core banking service and customers satisfaction. Similarly, the
regression analysis is to indicate level or degree of core banking service dimension on
customer’s satisfaction. When analyzing the data, core banking service dimensions were
considered as the independent variables whereas customer’s satisfaction is the dependent
variable. According to Pohlman (2003) OLS models shows the relationship between a
dependent and a collection of independent variables. In OLS models at least one
dependent variable and two or more independent variables treated. Also the study depicts
how dependent variables influenced with independent variables using multiple linear
regression analysis. The regression model and its formulas indicated below.
Y= β0 + β1 X1 + β2 X2 + β3 X3 +β4 X4 +β5 X5 + ε

Where Y = customer
satisfaction, β0 is regression
constant,
β1 – β5 regression
coefficients, X1 is tangibility
X2 is reliability,
X3 is responsiveness,

3
X4 is assurance,
X5 is empathy,
ε model’s error term.
3.7 Reliability and validity of instrument
According to Hair et al., (2007) reliability indicates the extents to which some variables or set
of variables are consistent in what they are intended to measure. Reliability analysis measures
the internal consistency of a questionnaire. As a result, the result the researcher used others
measurement scales to ensured reliability and also before actual data collection the
researchers employed pilot test and improve the clarity and responsiveness of the
questionnaire based on pilot test feedback. Then, Cronbach Alpha reliability statistics applied
to check reliability of the instruments and the coefficient of the reliability of Alpha, a=
0.975. According to George & Mallery (2003), the value of Cronbachs alpha coefficient
should be more than 0.7 which is an acceptable level of internal consistency or reliability.

On the other hand, Validity concerns with the degree to which a question measures what it is
intended to measure. To ensure the issues of validity the researcher selected relevant
data collection instrument based on literature and follow scientific research procedures. In
additions, the researchers took comment from the advisor. In addition the researcher
prepared standardized questionnaires by focusing main variables and research objective.
Then the researcher collected the relevant data from correct information providers and the
collected data measured by appropriate data analysis tools.

Table 3. 1 Reliability Test

Variables Cronbach's Alpha result No of items

Tangibility .996 5

Reliability .997 5

Responsiveness .996 5

Assurance .996 5

Empathy .996 4

customers satisfactions .996 4

3
 Total mean .997 28

3.8 Ethical Consideration

During conducting this study the researcher followed and carryout ethical protocols of
scientific research and its procedure. The researcher respects the privacy and willingness of
all research participants and fully aware the objectives of the research and their
contribution to its completion. The other ethical measures exercise by the researcher treated
the respondents with respect and courtesy. This is to be done, the respondents may be ease
and more likely to give honest responses to the questionnaire. On the other hand, the
information that gathers from the research participant analyzed with its full confidentiality
and used for the intended purpose only. Moreover, all sources and scholars property
rights issues properly acknowledged throughout the study.

4
4
 CHAPTER FOUR
CHAPTER FOUR: RESULT AND DISCUSSION
4.1 Introduction
This chapter deals with data presentation, discussion and result gained from questionnaire
and interview. The result presented by table, figures and statically analysis. As it has been
stated before, the study assesses the impacts of core banking on costumer satisfactions on
CBE Piassa branch.
4.2 Response Rate
To conduct this study the researcher prepared a total of 389 questionnaires and distributed
all of them to collect the necessary information from research participants. The summary
of the response rate is indicated in Table 4.1 below.

Table 4. 1 Responded rate of the study

Item Response Rate

No of questionnaires Percent

Distributed questionnaires 389 100%

Collected and used 368 94.6%
Non return and incomplete 21 5.4%
Source: own survey 2020

Tables 4.1 indicate that, from the total 389 distributed questionnaires the researcher
used properly 368 questionnaires to conduct the study. This is representing a 94.6%
response rate. The remains 21 (5.4% ) of the questionnaires were non return and incomplete.
4.3 Background information of respondents
To shows the back ground information of the respondents, the researcher used descriptive statistic.
The next table (table 4.2) summarizes all background information of respondents.

Table 4. 2 respondent’s characteristics in sample survey

Description (N=368) (% )
category frequency
Sex Male 204 55.4%
Female 164 44.6%

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 Total 368 100%
Age 15- 25 years 88 23.9%
26- 35 years 184 50%
36- 45 years 72 19.6%
46- 55 16 4.3%
Above 55 years 8 2.2%
Total 368 100%
Educational No formal schooling
4 1.1%
background Primary school completed 48 13.0%
Secondary school completed 40 10.9%
Certificate 20 5.4$
Diploma 68 18.5%
First degree 144 39.1%
Masters and above 44 12%
Total 368 100%
Costumer years, Less than 3 years 16 4.3%
used for service 3- 6 years 124 33.7%
7- 9 years 112 30.4%
10- 12 years 44 12%
More than 12 years 72 19.6%
Total 368 100%

Source: field survey, 2020

Table 4.2, above shows the background information of customers/ the respondents in the
study. Nearly half (55.4% ) of the respondents were male and the rest 44.6% of the
respondents were female. Furthermore, table 4.2 shows, the respondent’s age between 15-
25 and 26- 35 accounts 23.9% , 50% , respectively. The remaining 26.1% of the respondents
were above the age 35. This implies that, half percent (50% ) of Bank customers’ age found
26- 35 years, hence these young customer are an opportunity for bank to introduced core
banking solution. On the other hand, 39.1% of the respondents were degree holders and
also and 18.5% of were diploma holders. This indicates the majority of the customers can
understand the core banking application and logically determine their level of satisfaction
based on them.
Table 4.2 depicts, 64.2% of the respondents took CBE services the years interval with 3- 9
years.
When we see years of respondents that are used bank service, 64.2% of the respondents took

4
CBE services with 3- 9 years interval.

Figure 4. 1 core banking service used by bank customers in the last two years
According to the above figure, out of 368 respondents, 76.36% of them used Automated Teller
Machines (ATM) in the last two years. Next to this, 30.76% of the respondents were used mobile
banking, in the last two years. In the last two years, respondents used internet banking, Telephone
banking and Point of Sale transfer terminals (POS) with 18.9% , 11.89% and 6.30% respectively. This
indicates that, most of customers frequently used Automated Teller Machines (ATM). In addition,
mobile banking and internet banking are relatively better frequency to used core banking in the last
two years.
4.4 Correlation of variables
The correlation analysis shows only the direction and degree of association between variables.
However, as a result of interactions the direction and degree of relationship varies within
variables. This parts of the study presents the results and discussions of the correlation
analysis depict the relationship between the independent variables (tangibility, reliability,
responsiveness, assurance and empathy) and the dependent variable with customer
satisfaction. Below table 4.3, correlation matrixes indicate that, tangibility, reliability and
responsiveness independent variables statistically strong relationship with Customer
satisfaction. On the other, hand, the independent variables assurance and empathy have
statistically moderate relationship with Customer satisfaction. According to Dancey and
Reidy
4
(2004), correlation coefficient result greater than 0.7, it indicates a strong correlation between
variables and also correlation coefficient result found between .30 to .70 are deemed
moderate correlations. Below this table, shows the facts.

Table 4. 3 Correlation Matrix

Tangibility Reliability Responsiveness Assurance Empathy Customer

satisfaction

Tangibility 1

Reliability .912** 1

Responsiveness .863** .771** 1

Assurance .600** .666** .682** 1

Empathy .670** .709** .694** .860** 1

Customer .860** .755** .874** .530** .598** 1

satisfaction

**. Correlation is significant at the 0.01 level (2- tailed).

The correlate matrix indicated that, the independent variable responsiveness, tangibility, and
reliability have statistically strong and positive customer satisfaction r = 0.874**, 0.860** and
0.755** respectively (p = 0.000). Secondly, empathy and assurance have statistically
moderate and positive correlation with customer satisfaction r = .598** and .530** (p =
0.000). As it can be seen the table, responsiveness, tangibility, and reliability were strong
correlation with dependent variable customer satisfaction. Likewise, empathy and
assurance were moderate correlation with dependent variable customer satisfaction.

4.5 Multiple Regression assumption

In conducting a research multiple regressions depict the relationship between dependent and
independent variable and its degree of impacts/ influence within the relationship.
However, multiple regressions result should be reliable certain assumptions are crucial
and carryout before reached conclusion. These assumptions are not met; the results may not
be trustworthy, resulting in an error, or over- or underestimation of significance or effect size.
These important multiple regression assumptions and tests show below

4
4.5.1 Normality Test
Normal distributed assumption is relevant to multiple regressions. When histograms are close to
zero it is assumed that the data is normally distributed for the dependent variable. However, when
skewness and kurtosis are not close to zero and the histogram does not appear to have a normal
distribution (Osborne and Waters, 2002). According to figure 4.2 below indicated that the skewness
and kurtosis are not far from zero or between them the zero value is indicated. Thus, the result
assured that the distribution is normal for this study.

Figure 4. 2 Histogram regression of standardized residual dependent and independent variables

4.5.2 Linearity Assumptions

Multiple regressions need to be a linear relationship between the dependent and predictor
(independent) variables. As a result normality of residuals can be checked with a normal p- p plot.
The plot shows that the points generally follow the normal (diagonal) line with no strong
deviation. This indicates that the residuals are normally distributed. As a result figure 4.3 below
indicated Normal P- P Plots show that this assumption had been met for this study.

4
Figure 4. 3 Normal P- P Plot of dependent variable customer satisfaction.
4.5.3 Homoscedasticity test
As it can be seen table 4.3 the variance is constant across all levels of the predictor variables.
This assumption is also known as the homogeneity of variance assumption. The variance of
the error term is constant across cases and independent of the variables in the model. An
error term with non- constant variance is said to be heteroscedastic. Because the dots are
scattered randomly without any pattern, it means the variance of the residuals are constant.

Figure 4. 4 Scatter Plot standardized residuals vs predicted values

4
4.5.4 Multi- colliniarity issues and its test

Before analysis of multiple regressions the researcher checked multi- collinearity issues.

In multiple regressions model multi- collinearity problems are faced asa result of which two
or more predictor variables high correlations or non- related existence. If there is an
existence of multi- collinearity between variables it implies that one variable can be
linearly
predicted from the others with a substantial degree of accuracy. The existence of
Multicollinearity detected by tolerance values and variance inflation factor (VIF) result.
Tolerance is an indicator of how much of the variability of the specified independent is
not explained by the other independent variables in the model. The value is very small and
less than 0.1, it indicates that the multiple correlations with other variables is high,
suggesting the existence of multi- collinearity. On the other hand, VIF (Variance inflation
factor) is above 10 it is indicating that there is multi- collinearity between variables. The
tolerance values of all independent variables and the Variance inflation factor of this study
are shows below the table.

Table 4. 4 Multi- collininearlity test

Collinearity Statistics Remarks

Tolerance VIF

Tangibility .133 8.717

Reliability .175 7.395 No Multi- collininearlity

Responsiveness .199 5.025

Assurance .224 4.465

Empathy .223 4.494

NB. Dependent variable: Customer Satisfaction.

Source: Survey Data (2020)

As can be seen from table 4.4 above, the tolerance level of all independent variables are
greater than 0.1 and the VIF value of all the independent variables are also less than 10.

4
This confirms the absence of multi- collinearity.

4
4.6 Regression analysis
Regression analyses indicate that how much the independent variable i.e. service quality
models (tangibility, reliability, responsiveness, assurance and empathy) explain or
influences the dependent variable which is customer satisfaction. The results of the
regression analysis are presented the table below.

Table 4. 5 multiple regression output.

Model Summaryb
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .905 .818 .816 .50661
a

a. Predictors: (Constant), tangibility, reliability, responsiveness, assurance and empathy.

b. Dependent Variable: Customer satisfaction.

ANOVAa
Model Sumof Squares Df Mean Square F Sig.
Regression 418.661 5 83.732 326.24 .000
b
0
1 Residual 92.910 362 .257
Total 511.571 367

a. Dependent Variable: customer satisfaction

b. Predictors: (Constant), tangibility, reliability, responsiveness, assurance and empathy.

Coefficientsa
Model Unstandardized Coefficients Standardized T Sig.
Coefficients
B Std. Error Beta
(Constant) - .178 .110 - 1.625 .105

Tangibility .516 .086 .441 6.015 .000

.245 .073 .237 - .615 .000

Reliability
1
.665 .056 .596 11.867 .000
Responsiveness
.211 .060 .166 3.498 .001
Assurance
.180 .067 .057 1.204 .003
Empathy
a. Dependent Variable: Customer satisfaction.

The value of R square is used to evaluate the model. The model summary tells us how
much of the variance in the dependent variable over all service quality is explained by the
model which includes the independent variables of tangibility, reliability, responsiveness,
assurance and
5
empathy. Table 4.5 model summary shows that R Square explains by 0.818 or 81.8 percent
of the variance to overall service quality at the significant level of p = .000.
As depicted in the ANOVA table 4.5 the significance value of F statistics is 0.000 which is
less than 0.05. This also shows that there is a significant relationship between the dependent
and independent variables with F- value= 326.240.

In addition, table 4.5 shows that all independent variable (tangibility, reliability, responsiveness,
assurance and empathy) have positive impacts on customer satisfactions. Particularly,
responsiveness and tangibility were statistically strong significant impacts on customer
satisfaction with the value of β = 0.665 and 0.516 respectively. This indicates that
responsiveness and tangibility are crucial impacts on the enhancement of customer
satisfaction regarding with Commercial Banks of Ethiopian core banking solution. Moreover,
reliability and assurance were statistically moderate significant effects on customer
satisfaction with the value of β = 0.245 and 0.211 respectively. Further, empathy was
statistically insignificant impacts on customer satisfaction with the value of β = 0.180.

The above findings of this study are consistent with the reports of previous studies. For
instance, Mesay (2012) supported that there is a significant positive relationship between the
five
dimensions of service qualty and customer satisfaction, the highest correlation is
between tangibles and customer.

In addition, Anteneh (2018) research finding shows that tangibles, reliability, responsiveness
and assurance have a positive and significant effect on customer satisfaction. However,
empathy doesn’t have an effect (beta= 0.102) at 99 percent confidence interval (p<0.01).

Hypothesis of the Study

Based on the above finding all of the independent variables were positive association
with customer’s satisfactions and all test given bellow.

H1: Tangibility dimension of core banking service has statistically significant impact on
customer satisfaction in CBE. The intended null hypotheses are accepted, hence there is an
association between tangibility and customer satisfaction

5
H2: Reliability dimension of core banking service has statistically significant impact on
customer satisfaction in CBE. The intended null hypotheses are accepted, hence there is an
association between reliability and customer satisfaction
H3: Responsiveness dimension of core banking service has statistically significant impact on
customer satisfaction in CBE. The intended null hypotheses are accepted, hence there is an
association between responsiveness and customer satisfaction
H4: Assurance dimension of core banking service has statistically significant impact on
customer satisfaction in CBE. The intended null hypotheses are accepted, hence there is an
association between assurance and customer satisfaction
H5: Empathy dimension of core banking service has statistically significant impact on customer
satisfaction in CBE. The intended null hypotheses are accepted, hence there is an association
between empathy and customer satisfaction

On the other hand, the qualitative (opened ended questionnaires and interview) finding shows
that core banking application or solution have strong significance on service quality and
customer satisfaction. According to them, centralized core banking system and its practices;
save time, energy and improved service quality and also enhanced customer satisfaction.
On the contrary, system/ network interruption was the primary challenge during core banking
service provisions. Next to this related and others challenge were list out by research
participants such as electricity problem, poor technology experience of customer, poor
customer handling, inaccessibility of ATM machine and absence of quality services, access,
customer survey and awareness creation.

The participants recommended that, introduced fast, efficient, easily used and effective
networking through sophisticated core banking application, improved service quality,
internet access and customer handling practice, timely supervised the ATM machine, timely
update the core banking system, reduced electricity problem and inaccessibility ATM machine
and carryout customer survey and used customers feedback to improved centralized banking
system.

5
 CHAPTER FIVE
5. Summary major findings, Conclusion and Recommendations
5.1 Introduction
This chapter summarized and discussed the main findings obtained from bank customer.
Further, it dealt with conclusions derived from the analysis and also forwarded
recommendations that can be used for target stakeholders and future research

5.2 Summary major finding

The major objective of this study was to examine the Effect of Core Banking on
Customer Satisfaction in the Case of Commercial Bank of Ethiopia. To achieve this
objectives the researcher applied descriptive and explanatory research design with
quantitative and qualitative research approach. Also the researcher used simple random
sampling technique for questionnaires data and purposively select for interview participants.

The questionnaires data collected from CBE of Piassa branch service users/customer and
analyzed by inferential statistics (regression and correlation) and also the qualitative data was
analysis descriptively. After this major research finding presented.

As it can be seen demographic information , out of 169 sample respondents , 55.6% of the
respondents were male, 64.2% of the respondents took CBE services the years interval with 3-
9 years, , 50% , % of the respondents aged found between 26- 35 years, 39.1% of the
respondents were degree holders and also and 18.5% of were diploma holders and 76.36% of the
respondents were used Automated Teller Machines (ATM) in the last two years.

The overall finding of Pearson correlation result shows that, all independent service quality
dimensions (responsiveness, tangibility, reliability empathy and assurance) have statistically
positive relationship with customer satisfaction. Specifically, responsiveness, tangibility,
reliability have statistically strong relationship with customer satisfaction r = 0.874**, 0.860**
and 0.755** respectively (p = 0.000). Secondly, empathy and assurance have statistically

5
moderate correlation with customer satisfaction r = .598** and .530** (p = 0.000). This
Pearson correlation result confirmed or supported by regression analysis.

As it can be seen regression analysis there is no multi- collinearty and strong deviation
problem among the dependent and independent variables. According to regression analysis
results the independent variable (tangibility, reliability, responsiveness, assurance and
empathy) have positive impacts on customer satisfactions. Particularly, responsiveness and
tangibility were statistically strong significant impacts on customer satisfaction with the value
of β = 0.665 and
0.516 respectively. Moreover, reliability and assurance were statistically moderate significant
effects on customer satisfaction with the value of β = 0.245 and 0.211 respectively. Further,
empathy was statistically insignificant impacts on customer satisfaction with the value of β =
0.180.

The model summary and ANOVA table of regression result shows that, all service quality
dimension(tangibility, reliability, responsiveness, assurance and empathy) R Square explains
by 0.818 or 81.8 percent of the variance at the significant level of p = 0.000.

Regarding with qualitative research finding, core banking application or solution has
strong significance for service quality and customer satisfaction. According to research
participants, centralized core banking system and its practices; save time, energy and
improved service quality and also enhanced customer satisfaction. However, system/ network
interruption was the primary challenge during core banking service provisions. Electricity
problem, poor technology experience of customer, poor customer handling, inaccessibility of
ATM machine and absence of quality services, access, and customer survey and awareness
creation were the other challenge for core banking service users.

5
5.3 Conclusion
This study assessed the impacts of core banking on customer satisfaction in CBE Piassa
branch service users. As a result of Pearson correlation result, the independent service quality
dimension (responsiveness, tangibility and reliability) have statistically strong and positive
relationship with customer satisfaction. Also empathy and assurance were moderate and
positive relationship with customer satisfaction. This indicates that core banking solution
helps to enhanced customers satisfaction in bank industry.

Furthermore, the regression result revealed that, responsiveness and tangibility were
statistically positive and strong significant impacts on customer satisfaction with the value of
β
= 0.665 and 0.516 respectively. Following these, reliability and assurance were statistically
moderate significant effects on customer satisfaction. Further, empathy was statistically
insignificant impacts on customer satisfaction. This indicated that, customer satisfaction highly
improved by responsiveness (fast service delivery) and tangibility or modern technology
solution. Likewise, reliability, assurance and empathy were positive effects with customer
satisfactions but empathy was insignificant effects with it, banks understand and identified
the variables based on their level of impacts to maximized satisfaction through core
banking solutions.

The descriptive statistics or qualitative result shows that, core banking application or solution
has strong significance for service quality and customer satisfaction in CBE. According to
research participants, centralized core banking system helps to save time, energy and
improved service quality and also enhanced customer satisfaction. However, system/ network
interruption was the primary challenge during core banking service provisions. Electricity
problem, poor technology experience of customer, poor customer handling, inaccessibility of
ATM machine and absence of quality services, access, customer survey and awareness
creation were the other challenge for core banking service users

The above finding shows that, to improved customer satisfaction the bank used fast, efficient,

5
easily used and effective networking through sophisticated core banking application. Also, the
bank improved service quality, internet access and customer handling practice, timely
supervised the ATM machine, timely update the core banking system, reduced electricity
problem and inaccessibility ATM machine and carryout customer survey and used customers
feedback to improved centralized banking system and customer satisfaction.

5.4 Recommendations
Core banking solutions and its service quality diminutions tangibility, reliability,
responsiveness, assurance and empathy were positively impacts with customer
satisfaction. Specifically, the regression result revealed that, responsiveness and tangibility
were statistically positive and strong significant impacts on customer satisfaction with the
value of β = 0.665 and 0.516 respectively. Also reliability and assurance were statistically
moderate significant effects on customer satisfaction. This finding of supported by Pearson
correlation; all independent variable have moderate and above relationship with customers
relationship. In addition, qualitative result shows that, core banking application or solution
has strong significance for service quality and customer satisfaction in CBE. According to
research participants, centralized core banking system helps to save time, energy and
improved service quality and also enhanced customer satisfaction. However, system/
network interruption was the primary challenge during core banking service provisions.
Electricity problem, poor technology experience of customer, poor customer handling,
inaccessibility of ATM machine and absence of quality services, access, customer survey
and awareness creation were the other challenge for core banking service users

Therefore, the bank and human resource department should be more emphasis for the
application of modern technology and fast delivery service to maximized customer satisfactions
with centralized banking systems. Particularly, responsiveness and tangibility were greater
effects for customer satisfaction hence the bank used these service quality effectively.

Moreover, employee of the bank, manager and others stakeholders should considers the
significance or advantages of tangibility, reliability, responsiveness and assurance on customer
satisfaction in CBE and also the bank should alleviate network interruption, electricity problem,
and inaccessibility of ATM machine. In addition the bank developed technology and
customer
5
survey experience, awareness creation, quality services, access and customer handling
mechanism to enhanced customer satisfaction in workplace.

All Bank staff members and service providers give high attention for core banking/centralized
service delivery to save time, energy and easily increased satisfaction of customer by
considering variable degree of influence.
Further, the bank should installed sophisticated, easily access or used technology, improved
service delivery of bankswith the implementation of customer survey, and customer feedback

5.5 Future Research

The researcher recommends for further investigation focused with the impacts of core
banking on customer satisfaction in comparable with others banks customer satisfaction
within centralized core banking solution.

5
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Zeithaml, V.A., Bitner, M.J & Gremler, D.D (2006). Services Marketing: Integrating
Customer Focus Across the Firm. McGraw Hill, New York.
Zeithaml, V.A., Parasuraman, A. and Berry, L.L. (1990), Delivering quality service; Balancing
Dawit Mezgebu (2017) Impact of Information Technology Investment on Performance of Commercial
Banksin Ethiopia, Addis Ababa University

http://www.nbe.gov.com
http://www.combanketh.et

6
 Annex I Amharic version Questionnaires
በቅድስት ማሪያም ዩኒቨርሲቲ የቢዝነስ
አድሚኒስትሬሽን ትምህርት ክፍል ድህረ ምረቃ
ፕሮግራም
የዚህ መጠይቅ ዋና አላማ በኢትዮጵያ ንግድ ባንክ የፒያሳ ቅርጫፍ የሚሰጠው የኮር ባንኪንግ አገልግሎት በደንበኞች
(በአገልግሎት ተጠቃሚዎች) ላይ የሚፈጥረውን እርካታ ላይ የሚያደረስውን ተፅዕኖ (examine the effects of Core
Banking on Customer Satisfaction) በጥናት አስደግፎ ማቅረብ ነው፡፡ ስለሆነም እርስዎ ይህንን መጠይቅ በተሟላና
ግልጽ በሆነ መልኩ ከሞሉልን የጥናቱን ዓላማ በትክክል ለማሳካት ይረዳል:: ስለዚህ ጥያቄዎችን በትክክል እንዲሞሉ በትህትና
እየጠየቅሁ የሚሰጡት ምላሽ ከጥናቱ ውጪ ለሌላ አላማ እንደማይውል አስቀድሜ አረጋግጣለሁ፤ የሚሰጡት መረጃ በሚስጢር
ይጠበቃል፡፡ ስለዚህ እባክዎ ሁሉንም ጥያቄዎች በጥሞና በማንበብ እንዲመልሱ በአክብሮት እንጠይቃለን፡፡ በማንኛውም ገጽ
ላይ ስምዎን መፃፍ አያስፈልግዎትም፡፡

ለትብብርዎ አስቀድመን አናመሰግናለን!

ክፍል አንድ: የመረጃ ሰጪዎች አጠቃላይ መረጃ

መመሪያ አንድ: ከ1- 6 የቀረቡ ጥያቄዎችን በማንበብ ከቀረቡት አማራጮች መካከል ትክክለኛውን በመምረጥ በተገቢው ቦታው ላይ
የ x ወይም የ() ምልክት በማስቀመጥ ይመልሱ?

6
 1. ፆታ፡ 1.) ወንድ
ሴት
2. ) 26- 3.) ከ 36- 45
2.) 2. እድሜ : 1.) ከ 15 - 35
25
4.) ከ 46- 55 5.) ከ 55 ዓመት በላይ
3. ያጠናቀቁት የትምህርት ደረጃ፡
1.) መደበኛ ትምህርት ያልተማሩ 2. የ ጀመሪያ ደረጃ
መ
3.) ሁለተኛ ደረጃ ሰርተፊኬት
4
5.) ዲፕሎማ የመጀመሪያ ዲግሪ
6
7.) ሁለተኛ ዲግሪና ከዚያ በላይ

4. የኢትዮጵያ ንግድ ባንክ የሚሰጣቸውን አገልግሎት መጠቀም ከጀመሩ ስንት ዓመት ሆንዎ
1) ከሶስት ዓመት በታች 2) 6 ዓመት 3) 7- 9 ዓመት
3
4.) 10- 12 ዓመት

5) ከ 12 ዓመት በላይ

5. በአለፉት ሁለት ዓመታት የትኛውን የኮር ባንኪንግ አገልግሎት ከኢትዮጵያ ንግድ ባንክ ተጠቀሙ፡፡ የተጠቀሙትን አገልግሎቶች በሙሉ
ለይተው የ() ምልክት በማስቀመጥ ይመልሱ፡፡

1.) አውቶማቲክ የገንዘብ መክፈያቨ ማሽን (የኤ.ቲ. ኤም) 2.) የኢ ት ባንኪንግ

ንተ
3.) የሞባይል ባንኪንግ 4.) የቴሌፎን ባንኪንግ

5.) የቴሌፎን ባንኪንግና የክፍያ መፈፀሚያ ማሽን ሌላ ባክዎት ይፃፉ - - - - - - - - - - - - - - -

ካለ
ክህል ሁለት
መመሪያ አንድ የኮር ባንኪንግ ስርዓት ማለት አንድ ደንበኛ አካውንት ባወጣበት ወይም ድንበኛ በሆነበት ባንክ ያገኛቸው የነበሩ አገልግሎት
በተማከለ (centralized) በሆነ ሁኔታ በማንኛውም የባንኩ ቅርጫፎች ወይም ከሌሎች ባንኮች በኢንተርኔት አማካኝነት አገልግሎት ማግኘት
የሚያስችል ስርዓት ሲሆን በውስጡም የኤ.ቲ. ኤም ፣ የኢንተርኔት ባንኪንግ ፣ የሞባይል ባንኪንግ ፣ የቴሌፎን ባንኪንግና የክፍያ መፈፀሚያ ማሽን
(Point- of- Sale Transfer Terminals) አገልግሎትን ይዟል፡፡ ስለሆነም የኮር ባንኪንግ አገልግሎትን ላይ የእርስዎ እርካታ በምን
ደረጃ ላይ እንደሚገኝ ከዚህ በታች የቀርቡ ጥያቄዎች በደንብ በማንበብ ከቀረቡት አማራጮች መካከል በመጀመሪያ ደረጃ የሚስማሙበትን የ X
ወይም () ምልክት ከአማራጮቹ ትይዩ በማድረግ ስምምነትዎን ይግለፁ (1 = በጣም አልስማማም 2 = አልስማማም 3 = በከፊል እስማማለሁ 4 =
እስማማለሁ 5 = በጣም እስማማለሁ)

የአገልግሎት ጥራት መለያዎች በጣም አልስማ በከፊል እስማማለሁ በጣም

አልስማማም ማም (2) እስማማለሁ (4) እስማማለሁ
(1) (3) (5)
1. Tangibility (ተጨባጭነት)

1.1 ባንኩ ማከላዊነት አገልግሎት መስጠት የሚያስችል

6
የኮር ባንኪንግ አገልግሎትን ስርዓትን ተግባራዊ አድርጓል

1.2 ደረጃውን የጠበቀ የኮር ባንኪንግ አገልግሎት ለመስጠት

ባንኩ ዘመናዊ ስፍትዌሮች ይጠቀማል፡

1.3 በኮር ባንኪንግ አማካኝነት ከሁሉም የባንኩ ቅርንጫፎች

ድህንነቱ በተጠበቀ መልኩ አገልግሎት ማግኘት ይቻላል

1.4 ባንኩ የኮር ባንኪንግን አገልግሎት መስጠት የሚያስችል

ድህንነቱ የተጠበቀ የኢንተርኔት ኔትወርክ አለው

1.5 ባንኩ የተማከለ/ማዕከላዊ (centralized) ዳታ ቤዝ

አለው

2. Reliability (ተዓማኝነት) 1 2 3 4 5

2.1 በባንኩ የኮር ባንኪንግን አገልግሎት አሰጣት ላይ

እምነት አልዎት

2.2 የኮር ባንኪንግን አገልግሎቱ ከስህተት የፀዳ ነው

2.3 የባንኩ የኮር ባንኪንግን አገልግሎት ሁል ጊዜም

ለደንበኞች አገልግሎት ይሰጣል

2.4 ደንበኞች ችግሮች ሲያጋጥማቸው የባንኩ ሰራተኞቸ

ፈጥነው ችግሩን ይፈታሉ

2.5 የባንኩ ሰራተኞች የገቡት ቃል ይጠብቃሉ

3. Responsiveness (ምላሽ አሰጣጥ) 1 2 3 4 5

3.1 የኮር ባንኪንግ አገልግሎት መጀመር

ሰራተኞች/ባንኩ በወቅቱ አገልግሎት እንዲሰጥ አግዟል

3.2 የባንኩ ሰራተኞች ወቅታዊ መረጃዎች ለደንበኞች

ይሰጣሉ

3.3 ባንኩ ለየት ላሉ ደንበኞች የተለየ የአገልግሎት

መስጫ መንገድ ያመቻቻል

3.4 የኮር ባንኪንግን አገልግሎት መስጠት መጀመር

ደንበኞች አገልግሎቱን እንዲጠቀሙ ያነቃቃል

3.5 የኮር ባንኪን አገልግሎት መሰጠቱ ደንበኞች

በወቅቱ ትክክለኛ መረጃ እንዲያገኙ አስችሏል

4. Assurance(እርግጠኝነት) 1 2 3 4 5

6
4.1 የባንኩ ሰራተኞች የኮር ባንኪንግ አገልግሎት
መስጠት በቂ ክህሎት አላቸው

4.2 የባንኩ ሰራተኞች ደንበኞችን ለማገልገል ዝግጁ

ናቸው

4.3 የባንኩ ሰራተኞች የደንበኞችን ፍላጎት ተረድተው

ፍላጎታቸውን ለማሳካት ይሰራሉ

4.4 በባንኩ የሚከናወነው ሁሉም የገንነውዘብ

ልውውጥ ደህንነቱ የተጠበቀ ነው

4.5 ባንኩ ከኮር ባንኪንግ ጋር በተያያዘ የፈጠረው

ግንዛቤ ከደንበኞች ጋር መልካም ግንኙነት እንዲፈጠር
አድርጓል

5. Empathy(የመረዳት አቅም ) 1 2 3 4 5

5.1 ባንኩ በፈጠረው መልካም ግንኙነት ደንበኞቹ የኮር

ባንኪንግን አገልግሎት እንዲጠቀሙ አነሳስቷቸዋል
5.2 የኮር ባንኪንግን አገልግሎት መሰጠት መጀመሩ
የደንበኞችን ጊዜ ቆጥቦላቸዋል
5.4 ደንበኞችን ለመሳብና ለማቆየት ባንኩ ዘመናዊ የኮር
ባንኪንግን ለመስጠት የሚያስችል ተክኖሎጂ ያስተዋውቃል

5.4 ባንኩ የኮር ባንኪንግን አገልግሎት በአስተማማኝ

ሁኔታ ያስተዳድራል
6. Customer satisfaction (የደንበኛ እርካታ) 1 2 3 4 5

6.1 የኮር ባንኪንግን ስርዓት መዘርጋቱ የገንዘብ

ልውውጡን ፈጣን አድርጎልኛል
6.2 በባንኩ የኮር ባንኪንግን አገልግሎት አሰጣጥ
ረክቻለሁ

6.3 በኮር ባንኪንግ ስርዓት አማካኝነት ከሁሉም

ቅርጫፎች አገልግሎት ማግኘት ችያለሁ
6.4 የባንኩ የኮር ባንኪንግ አገልግሎት አሰጣጥ ደረጃ
ከኔ ግምት ጋር ይሄዳል/ተቀራራቢ ነው

መመሪያ ሁለት፡- ከዚህ በታች የቀረቡትን ጥያቄዎች በተቀመጠው ክፍት ቦታ ላይ ተገቢውን ምላሽ በመፃፍ ይመልሱ
1. የኢትዮጵያ ንግድ ባንክ የኮር ባንኪንግ አገልግሎት የሚገኝበትን የጥራት ደረጃ ምን እንደሚመስል የኤ.ቲ. ኤም ፣ የኢንተርኔት
ባንኪንግ ፣ የሞባይል ባንኪንግ ፣ የቴሌፎን ባንኪንግና የክፍያ መፈፀሚያ ማሽን (Point- of- Sale Transfer Terminals)
አገልግሎት ከግምት በማስገባት የደንበኞች እርካታ በምን ደረጋ እንደሚገኝ ይግለፁ? - - - - - -
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2. ተግባራዊ እየተደረገ በሚገኘው የኮር ባንኪንግ አገልግሎት የእርስዎ እርካታ ወይም ከጠበቁት አንፃር በምን ደረጃ ላይ
ይገኛል በዝርዝር ያብራሩ? -----------------------------------------------------------
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3. የኮር ባንኪንግ አገልግሎት በሚጠቀሙበት ወቅት የሚያጋጥምዎትን ዋና ዋና ተግዳሮች ወይም ችግሮች ይዘርዝሩ?
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4. የኮር ባንኪንግ አገልግሎት የተሻለ እንዲሆንና የደንበኞች እርካታ እንዲጨምር ምን ምን የመፍትሔ እርምጃዎች መወሰድ
አለባቸው በዝርዝር ያብራሩ? - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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Thank you!

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 Annex II Interview questions

St Mary University
SCHOOL OF GRADUATE
STUDIES

DEPARTMENT OF BUSINESS ADMINISTRATION (MBA)

Interview questions

1. What are the major cores Banking services implemented in yours Bank? Which
services effectively implemented? Please discussed in details?

2. How do you see Core Banking service quality and customers satisfactions? In
yoursopinion, the intended objective of the Bank successfully achieved regarding with Core
Banking service provision and the incensement of customers satisfaction? Please discuss
it?

3. How to treat customers in the Bank? Core banking service helps to retaining and
attracting customers? Please discuss in details?

4. What are the major challenge in the provision of core Banking service and maximizing
customer’s satisfaction?

5. What are the possible mechanism to improved core Banking service and also
customer’s satisfaction? Please discuss in details?

Thank you!