The Effect of Electronic Banking Technologies on Employee’s job security in case of CBE Hwassa City Branches, Ethiopia

Technical Summary: The Effect of Electronic Banking Technologies on Employee's Job Security in CBE Hawassa City Branches, Ethiopia

Problem Statement and Motivation
The study investigates the impact of electronic banking (e-banking) technologies on the job security of employees within the Commercial Bank of Ethiopia (CBE), specifically focusing on the Hawassa City branches. While existing literature acknowledges e-banking as a driver of operational efficiency, cost reduction, and customer satisfaction, there is a conflicting body of research regarding its effect on workforce stability. Some studies suggest e-banking leads to job losses and reduced security, while others argue it does not directly cause unemployment. Motivated by these contradictory findings and the need to address theoretical and geographical gaps, this research aims to empirically determine the relationship between specific e-banking components—Automated Teller Machines (ATM), Mobile Banking (MB), Internet Banking (IB), and Agent Banking (AB)—and employee job security (EJS) in the Ethiopian context.

Methodology

• Research Design: The study employs a descriptive and explanatory research design.
• Population and Sampling: The target population comprises 618 employees across 26 CBE branches in Hawassa City. A stratified sampling technique was used to select a sample of 243 employees.
• Data Collection: Primary data was gathered using self-designed Likert-scale questionnaires. A pilot study involving 25 respondents was conducted to test internal consistency, yielding a Cronbach's alpha of 0.824, indicating high reliability. Secondary data was sourced from branch reports and HR documents.
• Statistical Analysis:
  • Descriptive Statistics: Percentages, frequencies, medians, and modes were used to summarize the data.
  • Inferential Statistics: A Generalized Ordinal Logistic Regression model was employed. The study initially tested the proportional odds assumption (parallel lines) but found it violated ($p = 0.000$). Consequently, the Generalized Ordinal Logistic model was selected to allow the effects of explanatory variables to vary across different cut points of the ordinal dependent variable.
  • Model Validation: The model was validated using Omnibus tests, Goodness-of-Fit tests (Deviance, Pearson Chi-Square), and checks for multicollinearity (all pairwise correlations were below the 0.8 threshold).

Key Results
The regression analysis revealed distinct effects for each e-banking component on employee job security:

1. ATM (Automated Teller Machines): Found to have a statistically significant negative effect on job security ($p = 0.047$). A one-unit increase in ATM usage correlates with a decrease in the odds of job security by approximately 15.8% (Odds Ratio = 0.842).
2. Mobile Banking (MB): Found to have the most significant negative effect ($p = 0.000$). A one-unit increase in mobile banking correlates with a decrease in the odds of job security by approximately 32.4% (Odds Ratio = 0.676).
3. Internet Banking (IB): Found to have a statistically significant positive effect on job security ($p = 0.017$). A one-unit increase in internet banking correlates with an increase in the odds of job security by approximately 23.6% (Odds Ratio = 1.236).
4. Agent Banking (AB): Found to be statistically insignificant ($p = 0.419$). The data does not support a significant relationship between agent banking and employee job security in this context.

Hypothesis Testing Outcomes

• H01 (ATM): Rejected. ATM has a significant effect on job security.
• H02 (Mobile Banking): Rejected. Mobile banking has a significant effect on job security.
• H03 (Internet Banking): Rejected. Internet banking has a significant effect on job security.
• H04 (Agent Banking): Accepted. Agent banking has no significant effect on job security.

Conclusions and Significance
The study concludes that the adoption of specific electronic banking technologies in CBE Hawassa branches has a dual impact on employee job security. While ATM and Mobile Banking technologies are associated with a decrease in job security, Internet Banking is associated with an increase. Agent banking was found to have no significant impact.

Significance and Implications:

• Managerial Implications: The findings serve as a warning to banking managers and government bodies responsible for labor markets. The study recommends that banks adopt "employee-friendly" technologies and design Human Resource Management strategies, such as voluntary turnover programs or early retirement schemes, to mitigate potential job losses and social crises arising from technological displacement.
• Theoretical Implications: The research contributes to the limited theoretical framework regarding the specific effects of e-banking on job security in developing economies, offering new insights for future theoretical development.
• Future Research: The authors suggest that future researchers revisit this problem using time-series methods to estimate future prospects, noting that the current problem remains largely unobserved in the literature.

The paper maintains a modest stance, acknowledging that while the model fits the data well, approximately 53.7% of the variation in job security remains unexplained by the variables included in this study.