According to the Internet World Stats, internet usage was pegged at
11.5 percent in Zimbabwe in 2011 but the actual internet banking users constituted a fraction of the internet users. The adoption of internet banking in Zimbabwe has been sluggish over the past decade owing to the economic recession that Zimbabwe experienced from
2003-2008. The main objective study was to assess the impact of internet banking on individual banks and the banking sector as a whole. The maintained hypothesis was that internet banking had no impact on the banking sector. A cross sectional survey was used to gather information and views were drawn from fourteen commercial banks and one Reserve Bank of Zimbabwe analysts. Three sets of questionnaires, each for a specific group were distributed. The study also involved the estimation of a qualitative response model of internet banking in Zimbabwe. The research findings revealed that the competitive advantage of internet banking lies in the areas of cost reduction and satisfaction of consumer needs. The findings also noted that internet banking improved operational efficiency and the major factors for the efficiency were attributed to the overall decrease in operational cost, total cost of employment and expenses incurred on fixed assets. The overall benefit of internet banking was convenience to customers. The study recommends that banks should improve basic functionality of bank websites. Government must, through the
Reserve Bank of Zimbabwe (RBZ), increase investments in education, infrastructural development to enable consumers to adopt the innovation.
Keywords: Internet banking, operational efficiency, qualitative response model
Name of Track: Banking & Finance
JEL codes: C25, E42, E47 and G21
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Mr Ndlovu Ian, Department Of Banking, National University of Science and Technology, P O Box AC
Ascot, Bulawayo, Zimbabwe, Email: ndlovu.ian@gmail.com
, Telephone: +263 9 282842