Abstract:
This study examines the challenges and prospects of online banking system. The objective of the study was on the challenges face and prospects get from online banking system in commercial bank of Ethiopia in Debre Markos branch. Mixed research approach was employed and both primary and secondary data used. The primary data are collected through questionnaire and interview and secondary data are collected through bank websites, annual report of the organization. The researcher uses probability sampling technique, that is simple random sampling and the collected data was analyzed by using descriptive analysis such as tables and percentages. From the analysis of the collected data, the findings revealed that: balance inquiry, cash Withdrawal, funds transfer within the bank, are some the major practice of online banking in commercial banks that are providing the service to their customer. The different online-banking channels by which bank are using to provide these services to their customers are ATM card, Internet banking and Mobile banking. On the View point of the bank Cost reduction, reduce risks, it provide 24 hour service, provide quality service, coverage of wide geographical area, customer satisfactions are some of the prospects of using online banking. Interruption of networks, lack of it skilled man power, Chances of risk, Lack of suitable legal and regulatory framework, absence of financial networks that links different banks, Low level of internet penetration and poorly developed telecommunication infrastructure, high cost of internet, security concerns are among the major challenges of online-banking service in the commercial bank of Ethiopia in Debre marks branch. As per the finding, Even if, the bank usesproper follow up through security check ups, updating software periodically, antivirus scan in computer monitor, 24 hours check on antivirus scan; the problem does not retarded or reduced, in case of this the bank worked hardly with partners (like Ethiopia telecom), and using modern technology like Remote Deposit Capture, and finally giving more attention on customers awareness in relation to visa card and mobile banking usages. this research provide an opportunity for decision makers of the external users like governmental agencies ,customers and regulatory authorities, and for managers of the bank's in relation to challenges of online banking to consider and evaluate the opportunities observed in the existing practice
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