ASSESSMENT OF AUTOMATED TELLER MACHINE ON BANK CUSTOMER'S SATISFACTION

1.1 Introduction

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.

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Limitations of the Study and Definition of technical terms.

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1.2 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.

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.

Therefore, in Ilorin, Kwara State where the research was carried out, the activities that was conducted is to know the assessment of automated teller machine on bank customer's satisfaction.

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1.3 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.

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1.4 Aim and Objectives Of The Study

The main aim of this study is to examine the impact of automated teller machine on customers’ satisfaction in the Nigeria banking system in Ilorin, Kwara State using Ecobank as a case study. In achieving this aim, the following specific objectives were laid out as follows to:

1. Find out customer services offered by Automated Teller Machine points to customers in each of the banks in Nigeria.
2. Establish relationships between each Automated Teller Machine service and customer’s satisfaction.
3. Examine the problems of Automated Teller Machine on the bank customer’s satisfaction.

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1.5 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 Ilorin, Kwara State?
• What is the relationship between each Automated Teller Machine services offered by banks in Ilorin, Kwara State and customer’s satisfaction?
• What are the problems of Automated Teller Machine to the bank customer’s satisfaction?

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1.6 Research Hypotheses

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

H0: There is no significant relationship between Automated Teller Machine and customer’s satisfaction in Ecobank.

H1: There is a significant relationship between Automated Teller Machine and customer’s satisfaction in Ecobank.

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1.7 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.

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1.8 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.

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1.9 Limitation of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this project work. There were lots of information needed from the staffs of this institution to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.
3. Research material: availability of research material is a major setback to the scope of the study.
4. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
5. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

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1.10 Operational Definition of Terms

In this study relevant terms are interpreted as follows:

Automated Teller Machine (ATM): Automated Teller Machine 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 (Malcolm, 2008).

Bank: A bank is a financial institution and a financial intermediary that accepts deposits and 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