Abstract: The motive of this paper was to examine on how functionality of alternative banking channels influence the level of customer satisfaction in Tanzanian commercial banks sector. The study conducted in Arusha city, by using a descriptive survey design. The population for the study was staff and customers of twenty commercial banks branches operating in Arusha city. Simple and purposive sampling techniques were used to select a sample size of about 110 respondents to be involved in the study. The questionnaire instruments used to collect primary data, which were analyzed by the use of descriptive statistic and Ordinal regression Analysis. The findings revealed that there is significant positive relationship between functionality of ABCs attributes and the level of customer satisfaction in Tanzanian commercial banks sector. The study recommends that banking and financial institution Act 2006,be modified to accommodate adoption and use electronic banking, in so doing, banks can use PINs, instead of signatures. This will simplify handling of cyber crime cases more easily than it is now