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Abstract
This paper sought to explore the extent of adoption and usage of internet banking by commercial banks in Zimbabwe as well as investigate the challenges they face in the adoption of this technology. An exploratory research design was used to achieve the envisaged aims of the study. Overall, the results showed that while the majority of the banks in Zimbabwe have adopted internet banking, usage levels have remained relatively low, as not many customers are using this innovation in Zimbabwe. Regarding the challenges faced by banks in the adoption of IB, compatibility with existing legacy systems, cost of implementation and security concerns ranked high. The implications of the study are that banks in Zimbabwe should vigorously promote the usage of IB among customers while policy makers such as the Government and the Reserve Bank of Zimbabwe should increase investments targeted at infrastructure development so as to encourage banks and individuals alike to adopt the innovation.
Keywords: Electronic banking, Internet banking, Zimbabwe.
© Dube Thulani, Chitura Tofara and Runyowa Langton, 2008
INTRODUCTION
The internet is transforming the banking and financial industry in terms of the nature of core products /services and the way these are packaged, proposed, delivered and consumed (Sathye, 1999). It is an invaluable and powerful tool driving development, supporting growth, promoting innovation and enhancing competitiveness (Kamel, 2005 and Nath, Shrick and Parzinger, 2001). Banks and other businesses alike are turning to Information Technology (IT) to improve business efficiency, service quality and attract new customers (Nath et al, 2001 and Kannabiran and Narayan, 2005). Technological innovations have been identified to contribute to the distribution channels of banks and these electronic delivery channels are collectively referred to as electronic banking, (Goi, 2005). The evolution of banking technology has been driven by changes in distribution channels as evidenced by automated teller machine (ATM), Phone- banking, Tele-banking, PC-banking and most recently internet banking (Chang, 2003 and Gallup Consulting, 2008).
In Zimbabwe the first visible form of electronic innovation was in the early 1990s when Standard Chartered Bank and Central Africa Building Society (CABS) installed Automated Teller Machines (ATMs). Other forms of electronic innovations that have found their way into Zimbabwean banks are Electronic Funds Transfer Systems (EFT), Telephone banking, Personal Computer (PC) banking and recently...