ASSESSMENT OF AUTOMATED TELLER MACHINE (ATM) ON CUSTOMERS’ SATISFACTION IN NIGERIA BANKING SYSTEM
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CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The goal of most innovative ideas on information and communication technology in most of the organization is to improve job performance and employee readiness on the job. ICT plays a vital role in the business activities, more especially in the banking sector. Information and communication technology (ICT) has increasingly stimulated expansion of the banking networks and range of the offered services during recent years. All banking services, such as electronic payments, loans, deposits, or securities have become heavily dependable on information and telecommunication technology (Adewoye, (2013). This is the main reason why banks are the biggest users of modern technology equipment. Due to the complexity of banking services, every opportunity to speed up their performance or to make them more accessible for customers is very well welcomed by banks.
Many innovative ideas in the banking sector such as internet banking, automated teller machine (ATM) among others has been in place in order to motivate customer’s patronages to banks and reduce cost in the services. But the impacts of such innovative technologies are lost whenever the systems are rejected by the users. The user acceptance is therefore considered as a determining factor that measure the degree of success or failure of any new innovation or technology (Jun &Cai, 2001; Yen, Tsai, & Chen, 2010). This study uses technology acceptance model to address why customers accept or reject ATM and how the acceptance is influence by the ATM service quality. The customer satisfaction is determined by the ATM service quality rendered by the ATM stakeholders.
Automated Teller Machine (ATM) refers to a machine that acts as a bank teller by receiving and issuing money to and from the Automated Teller Machine account holders/users. The evolution of Automated Teller Machine was not in isolation, rather as a result of the general global wave in the technological revolution (Kathleen, 2005). This came due to the need to respond to the challenge of the multiple bulk of daily complex information that arises from among others; increase in competition, increased customer demand for both service provision as well as efficiency, expansion due to the increase in demand for services etc.
ATMs are placed not only near or inside the premises of banks, but also in locations such as shopping centers/malls, airports, grocery stores, petrol/gas stations, restaurants, or any place where large numbers of people may gather. ATM services includes function such as cash withdrawal, balance enquiry, bill payment, cash and cheque deposit, saving and credit account on a 24 hours basis.
According to Patricio and Cunha, (2003) Automated Teller Machines are devices used by bank customers to process account transactions. Typically, a user inserts into the ATM a special plastic card that is encoded with information on a magnetic strip. The strip contains an identification code that is transmitted to the bank’s central computer by modem. To prevent unauthorized transactions, a personal identification number (PIN) must also be used by the user using a keypad. The computer then permits the ATM to complete the transaction; most machines can dispense cash, accept deposits, transfer funds, and provide information on account balances. Banks have formed cooperative, nationwide networks so that a customer of one bank can use an ATM of another for cash access, by extension all commercial bank’s ATM in Nigeria are inter-connected.
Globally, Automated Teller Machines have been adopted and are still being adopted by banks. They offer considerable benefits to both banks and their depositors. The machines can enable depositors to withdraw cash at more convenient times and places than during banking hours at branches (Musiime and Biyaki, 2010). In addition, by automating services that were previously completed manually, ATMs reduce the costs of servicing some depositors on demand. These potential benefits are multiplied when banks share their ATMs, allowing depositor of other banks access their account through a bank’s Automated Teller Machine.
The use of Automated Teller Machine system of banking therefore brought efficiency in the banking industry majorly in terms of speed, data processing and storage. Thus it saw a huge improvement in the long queuing in most banking halls. Despite all the merits of the ATMs, customers still complaint of shortcomings on the use of the system like; break downs of ATMs, long queues at Automated Teller Machine service points, retention of customer’s cards. Against this background, this study examines the impact of Automated Teller Machine on customers’ satisfaction in the Nigeria banking system
1.2 Statement of the Problem
The introduction and use of ATM system of banking has received different perceptions. One of the views is that, it may not have really created customer satisfaction for bank clients, and the other is that, it may have. Despite all the merits of the ATMs, customers still complain of shortfalls on the use of the system such as; break downs of ATMs, long queues at ATM service points, retention of customers’ cards, limited knowledge on the use of ATM cards, fraudulent transactions and its operation in just a few languages. The impact of Automated Teller Machine cannot be ignored if meaningful goals and objectives are expected to be achieved (Balunywa, 2003). Automated teller machine is introduced into the banking system to enhance good services delivery and efficient customer satisfaction. Presently Nigeria problem in automated teller machine is the use of outdated or inappropriate technology and lack of adequate knowledge or experience about the machine being use is another problem facing automated teller machine. This study therefore examines the impact of Automated Teller Machine on customers’ satisfaction in the Nigeria banking system.
1.3 AIM AND OBJECTIVES OF THE STUDY
THE MAIN OBJECTIVE OF THIS STUDY IS TO EXAMINE THE IMPACT OF AUTOMATED TELLER MACHINE ON CUSTOMERS’ SATISFACTION IN THE NIGERIA BANKING SYSTEM.
THE SPECIFIC OBJECTIVES OF THE STUDY ARE TO:
- Find out customer services offered by Automated Teller Machine points to customers in each of the banks in Nigeria.
- Establish relationships between each Automated Teller Machine service and customer’s satisfaction.
- Examine the problems of Automated Teller Machine on the bank customer’s satisfaction.
1.4 RESEARCH QUESTIONS
The following research questions will guide the study.
- What are the different Automated Teller Machine services offered to customers by each of the banks in Nigeria?
- What is the relationship between each Automated Teller Machine services offered by banks in Nigeria and customer’s satisfaction?
- What are the problems of Automated Teller Machine to the bank customer’s satisfaction?
1.5 Research Hypotheses
The following hypotheses were used for this study:
H0: There is no significant relationship between Automated Teller Machine and customer’s satisfaction.
H1: There is a significant relationship between Automated Teller Machine and customer’s satisfaction.
1.6 SIGNIFICANCE OF THE STUDY
The findings of the study will help the banking industry by showing how quality services offered by ATM service points are essential and its relationship to customer satisfaction.
The conclusions and recommendations of the study will help the banking industry in the identification of the weaknesses in the use of ATM system of banking and the ways of improving its services
This study will also be of great importance to future scholars who will pursue research in fields related to ATM system of banking and service satisfaction.
1.7 SCOPE OF THE STUDY
The scope of this study covered the impact of automated teller machine on customer’s satisfaction. The impact of Automated Teller Machine is the independent variable while customer’s satisfaction is the dependent variable. The effectiveness of the Automated Teller Machine services on customer’s service will be measured using variables like; reliability, speed and efficiency of Automated Teller Machine services in solving the queuing problems.
1.8 Limitation of the Study
The following factors will serve as limitation during the course of writing this project;
Financial difficulties: Lack of financial backing will pose a problem to the study which will hindered the researcher from getting needed information from the necessary quarters.
Time Constraint: The time will be a problem as the time allocated for the study might not enough to undergo a more comprehensive research on the topic.
Inadequate Materials: This will be another constraint as the researcher might not be able to execute the work more effectively due to paucity of data such as; journals, newspaper, seminars etc.
Attitude of respondents: The attitude of the respondents to the study might not be encouraging and this might affect the study.
1.9 Operational Definition of Terms
In this study relevant terms are interpreted as follows:
Automated Teller Machine (ATM): Automated Teller Machinerefers to a machine that acts as a bank teller by receiving and issuing money to and from the Automated Teller Machine account holders/ users (Malcolm, 2008).
Bank: A bank is a financial institution and a financial intermediary that accepts depositsand channels those deposits into lending activities, either directly by loaning or indirectly through capital markets (Kumbhar, 2011).
Customer’s Satisfaction: Customer satisfaction is defined as the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals (Kumbhar, 2011).
Machine: A machine is a tool containing one or more parts that uses energy to perform an intended action. Machines are usually powered by mechanical, chemical, thermal, or electrical means, and are often motorized. Historically, a power tool also required moving parts to classify as a machine (Balunywa, 2003).
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