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Full Project – Effect of automated teller machines (ATM) on banking services

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CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Automated Teller Machine (ATM) is a product of technological development developed to enhance quick service delivery as well as diversified financial services such as cash deposits, withdrawals, funds transfer, transactions such as payment for utilities credit card bills, cheque book requests and other financial enquiries. All financial institutions are using this method/system, aggressively encouraging all their customers to take advantage of these services on the grounds of ease process but an unannounced financial generation to the bank.

Automated Teller Machine (ATM) is the first well known machines to provide electronic access to customers. With the advent of ATM, banks are able to serve customers outside the banking hall. ATM is designed to perform the most important function of banks such as withdrawal of cash, deposits, printing of mini statements settlements of bills. It does all through an access to personal identification number (PIN), and a plastic that contains magnetic chip which the customer is identified through. (Fanawup (2016).

In the years back, banking operation and or transaction was an ease process of walk-in to deposit or withdraw with less congestion or time consuming process via pass-book or cheque book. In recent time, the complexity of human demand and or business transaction informed the influx of customers in and out of banking halls, which in one hand requires either the need for additional hands or stretching the services of the available staff on the other hand. In another perspective, this in and out banking operation with polythene bags of money created attraction for hoodlums and thus exposed the customers to robbery.

To reduce the congestion within banking halls, and in a bit to reduce the volume of carrying cash, banks came up with electronic business transaction. Today, banking has developed into an era of menu-driven ultra robust specialized software programmes called banking applications. These applications can carry out virtually all banking functions relying strongly on information collection, storage, transfer, and processing. Ovia (2016)

The consolidation and bail out exercise in the Nigerian banking industry drew the attention of many banks to application of various technological devices in promoting/ achieving better customer service delivery that guaranteed customer satisfaction and translates into increase profitability and higher return on Investment. Globalization, left bank with no option other than to adopt convenience of transaction to enhance customers’ satisfaction if they really want to stay in business and also be profitable. Electronic Banking system is a brain child of ICT that made it possible for service providers and their customers in developing economies to enjoy a good semblance of the services enjoyed in the developed countries. It afforded banks the opportunities to satisfy customers which will encourage their consistence and continuous patronage.

It is against this backdrop that this study tends to investigate the effect of Automated Teller Machine on banking service in Kogi State with a particular reference to two (2) selected commercial banks.

1.2 Statement of the Problem

ATM (automated teller machine) service is now made available in most of the banks in Kogi state and as a result, the same machine are installed and seen around the bank premises, shopping complex, schools, streets and almost every corners in the metropolis. The following systematic survey of the general problem associated with series of ATM in Kogi State, a detail study was conducted by the researcher to know the remote and immediate cause of the problem. However, some of the problems encountered with ATM include the following:

Defrauding of banks customer via ATM
Unreliability of ATM to dispense cash in emergency or critical situations

Poor internet connection between the ATM and server machine

The long queues of customers at ATM cash point

1.3 Objective of the Study

The main objective of this study is to examine the effect of automated teller machine (ATM) on banking service. Specific objectives include:

To examine whether Automated Teller Machine enhance the performance in the banking sector.
To ascertain the whether there is significance relationship between automated teller machine and the performance of banking sector in Kogi State

To evaluate whether the adoption of automated machine has positive impacts on the performance of banking sector in Kogi State

To identify the factors that militates against effective adoption of automated teller machine in the banking sector.

1.4 Research Hypotheses

Hypothesis here is a tentative or a guess answer to a research problem concerning or involving some variable in the formulation of hypothesis here, the researcher made mention of two Major types of hypothesis viz the null hypothesis donated by which means there is difference between the believed means and the sample means and the sample means and any difference recorded can be attributed solely to change. The hypothesis that the researcher would accept if it does not accept the null hypothesis is called an alternative and is denoted “Hi” these includes the following hypothesis:

Hypothesis I

Ho: Automated Teller Machine does not enhance the performance in the banking sector.

Hi: Automated Teller Machine enhances the performance in the banking sector.

Hypothesis II

Ho: There is no significance relationship between automated teller machine and the performance of banking sector in Kogi State

Hi: There is significance relationship between automated teller machine and the performance of banking sector in Kogi State

Hypothesis III

Ho: The adoption of automated machine does not have any positive impacts on the performance of banking sector in Kogi State

Hi: The adoption of automated machine has positive impacts on the performance of banking sector in Kogi State.

Hypothesis IV

Ho: There are no factors that militate against effective adoption of automated teller machine in the banking sector.

Hi: There are factors that militate against effective adoption of automated teller machine in the banking sector.

1.5 Significance of the Study

The significance of this is not limited to ATMs users alone but also to the society at large. The significance of this study is traceable to the fact that, it will stand as a watch dog to watch other ATMs users in order to prevent them from the hands of fraudster.

This study will also alert the management of banks about the perception of customers concerning ATM usage. So that they can be up to date and upgrade the machine in order to render best of ATM services to users. This study will encourage customer is to embrace the use of ATM and overcome their fear of putting their debit card into machine sloths rather than a teller shop and be convinced that banks originally do not charge customers any fees for using ATM when compare to the table withdrawals. The study will add to existing literature for future researchers.

1.6 Scope of the Study

This project is based on the effects of ATM on banking services in Kogi State with particular reference to First Bank Plc, Lokoja, it is carefully treated to cover every information needed about automated teller machine (ATM) and its effect on banking services.

1.7 Limitations and Constraint of the Study

The problem encountered in the process of carrying out this research work enormous some of these problem and constraint are:

Lack or poor responses from ATM users to the researcher analysis, conclusion and recommendations is based on the response from the users of ATM and other relevant in information providers. But on the part of the users, it is believed that their responses may be used against them therefore making thing difficult for the researchers
The banks personnel stay too close to the customers while using the ATM is frustrating.
Lack of speedy information: Some of the bank refuses and delay in some cases to give relevant information to the researcher faced lot of delay in carrying out his project work.

1.8 Definition of Key Terms

ATM: According to Jegede ( 2014) means Automated Teller Machine. Is a machine that aid functioning.
Internet: It means computer networks providing email and information from computer in various agencies and industry accessible to general.

Machine: Means a place of equipment that is designed to a particular work.

LAN: This means Local Area Network
PIN: Personal Identification Number
CYTO Processor: it is a devise in the ATM machine that aid functioning.

System: Muhammed (2017) defines a system as a group of interrelated components that exists to make the whole totality, such that any brake down in any of the elements or groups will affect the totality.
Network: This means communication system which link together, computer storage device, word processor, printer and even the telephone system of the bank within and outside the outside the organization.

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Full Project – Effect of automated teller machines (ATM) on banking services

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Full Project – Effect of automated teller machines (ATM) on banking services

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