The Impact of Automated Teller Machines on the Cost of Efficiency of Banks in Nigeria
Chapter One
Purposeย ofย theย Study
Theย purposeย ofย theย studyย wasย toย assessย theย impact ofย ATMย useย on the cost of efficiencyย inย banking.
Specificย Objectivesย of theย study:
Theย studyย wasย guided byย the followingย research objectives:
- Examine the cost of efficiency in the use of ATM in Stanbic Bank Ikeja
- Identify the challenges in the use of ATMs in Stanbic Bank Ikeja
- Suggest strategies for strengthening customer satisfaction at the ATM point of Stanbic Bank of Ikeja
CHAPTER TWOย
LITERATUREย REVIEW
Introduction
This chapter presents the theories and the existing related literature on the evaluation of ATMย systemย useย on the cost of efficiency.ย Literatureย isย reviewedย fromย variousย sourcesย suchย asย journals,ย reports and theย accessible information onย internet.
Theoreticalย Foundation
This section outlines the theories that this study is grounded to underpin the foundation of Automatic Teller Machine and customer satisfaction. These theories include Diffusion of Innovation Theory, innovation Diffusion Theory, Dissonance Theory and combined Level Theory.
Aย Theory isย aย plausibleย orย scientificallyย acceptableย generalย principleย orย bodyย ofย principlesย offeredย toย explainย phenomena (Cheltel,ย 1998).ย Theory explainsย how someย aspectย of humanย behavior or performance is organized. It is through understanding the theory behind banking thatย led to implementation of ATM to influence customer satisfaction. The study concentrates onย ATMย theoryย and Customer satisfaction theory.
Automatedย Tellerย Machineย isย aย computerizedย telecommunicationsย deviceย thatย providesย theย customers of a financial institution with access to financial transactions in a public space withoutย the need for a human clerk or bank teller. On most modern ATMs, the customer is identified byย inserting a plastic ATM card with a magnetic stripe or a plastic smartcard with a chip thatย containsย aย unique card numberย and someย securityย information, such as anย expiration date.
When it was first introduced, the ATM was meant to reduce the unnecessary traffic in theย banking hall, make customers have a quick access to their money and make life convenient to aย certainย level.ย However,ย accordingย toย Ayoย etย al.,ย (2010)ย theย situationย todayย hasย changedย drastically; it has become a source of worry to users and providers (banks), because the functionย itย was meant to provide has been seriouslyย eroded.
It has become a money spinner for fraudsters, who have found new heaven in compromising innocent peopleโs personal identification numbers (PIN).
Cacioppo (2000) argued that use of Automated Teller Machine system of banking brought efficiency in the banking industry majorly in terms of speed, data processing and storage which is anticipated to induce customer satisfaction through instant cash withdrawal, balance enquiry, bill payment, cash and cheque deposit, saving and credit account on a 24 hours basis (Patricio & Cunha, 2011).
Donell (2003)ย viewed electronic banking service asย aย service thatย consumers canย access, byย using Network framework or an Internet service to a bankโs computer center, to perform bankingย tasks, receive and pay bills, and so forth. Many other financial services can be gained accessย through the Internet. To most people, electronic banking service means 24- hour access to cashย through an ATM or paychecks deposited directly into checking or savings accounts (Hillier,ย 2002).
Rose (2010) cited by Abor, describes ATMs as follows: โan ATM combines a computer terminal, record-keeping system and cash vault in one unit, permitting customers to enter the bankโs book keeping system with a plastic card containing a Personal Identification Number (PIN) or by punching a special code number into the computer terminal linked to the bankโs computerized records 24 hours a dayโ. Once access is gained, it offers several retail bankingย servicesย to customers.
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CHAPTER THREEย
RESEARCHย METHODOLOGY
Introduction
This chapter presents the details in which the study was executed. It shows the research design,ย theย studyย area,ย population,ย theย samplingย design,ย dataย collectionย methods,ย instrumentsย andย analyticalย technique.
Researchย Design
The study adopted a quantitative survey design, non-experimental and cross sectional in nature.ย The unit of analysis was bank customers found within the bank vicinity. Quantitative researchย design was adopted because it describes the study phenomena in terms of numbers and non-ย experimentalย designย whichย allowsย analysisย usingย statisticalย methodsย toย generateย descriptiveย statisticsย (Creswell,ย 2009).ย Nellyย (2010)ย definedย quantitativeย designย asย anย approachย whichย quantifies responses in numbers instead of explanations. The design was considered appropriateย for the study due to the need to collect data from the larger sample to establish the impact of ATMย useย on the cost of efficiency.
Theย studyย populationย andย sample
ย Studyย population
A population in statistics is the specific parameter about which information is desired and it mayย include a set of people, services, elements, and events, group of things or households that areย being investigated (Kothari, 2009). The study population was 250 customers weekly on averageย specificallyย thoseย whoย visitย Stanbicย Ikejaย Branchย inย Ikeja,ย westernย Nigeriaย (Customer Inquiryย officer, 2016).
CHAPTERย FOUR
PRESENTATION,ย INTERPRETATIONย ANDย ANALYSISย OFย FINDINGS
ย Introduction
This chapter presents description of the results of data analysis in narrative and tabulated mannerย to assess the impact of ATM use on the cost of efficiency in Stanbic bank Ikeja Branch,ย Nigeria using descriptive statistics including frequency distributions/mode, mean, and standardย deviation forย easyย interpretation.
CHAPTERย FIVE
ย DICUSSION,ย CONCLUSIONSย ANDย RECOMMENDATIONS
ย Introduction
Thisย chapterย presentsย theย discussionsย ofย eachย researchย question,ย conclusionsย andย policyย recommendationsย andย areaย forย further research.
Discussions
The first question was to establish the the cost of efficiency in the use of ATM inย Stanbicย bank Ikeja ย Branch Nigeria.
Findings on availability of ATM services in 24/7 days for use to customers indicate a mean ofย 3.8278 and insignificant standard deviation of 0.0280. Majority of the respondents agreed to thisย form of customer satisfaction since ATM is located outside banking hall and accessible 24 hoursย throughout the week.ย In addition, 24/7 access to account make customers to fill satisfied andย become loyal which make the business to survive since a single unsatisfied customer can sendย away more clients from the bank and current ITC is the base line to induce customer satisfactionย which the Stanbic achieve through the use of ATM to offer 24/7 service to induce customerย satisfaction and retention. This agreed with Anderson and Sullivan (2007) who argued that ATMย facilitate 24/7 deposits and withdraws of cash by customers account to transact induce customerย satisfaction.
Finding whether cash deposit is easily made via ATM point at Stanbic Bank Ikeja Branch Nigeria results indicate mean of 2.0903 and standard deviation of 0.5053. Majority of the participants disagreed to this form of customer satisfaction, which implying that cash deposit is not easily made via ATM. ย ย This disagreement is supported by Diniz (2011) who conjure that cash deposit via ATM point is not as effective as cash withdraws since deposit of cash does not update theย account automaticallyย in developingย countries.
Finding whether cash withdraw is cheap to make via ATM at Stanbic Bank Ikeja Branch Nigeria results indicate mean of 4.5931 and standard deviation of 0.3498. Majority of the participants agreed to this form of customer satisfaction that cash withdraw is cheap via ATM by inserting the debit card and request for cash within the bank withdraw daily transaction limits and below the amount available on the account. This agreed with Okior (2015) who argued that cheap cash withdraw of funds enables customers to meet their immediate needs which attract customer satisfaction since a single satisfied customer in todayโs dynamic corporate environment will obviously convince other customers through reference to the business and satisfaction greatly influences customersโ repurchase intensions whereas dissatisfaction has been seen as a primary reason for customers intentions to switch to other dealers in banking industry.
Findingย whetherย making financialย transactionย isย secureย via ATMย atย Stanbic Bankย Ikejaย Branch Nigeria results indicate mean of 3.8097 and standard deviation of 0.1801. Majority of theย participants agreed to this form of customer satisfaction that making financial transaction likeย withdraws and deposits is secure via ATM.ย Currently, ATM is the easiest way of making cashย financial withdraws any time anywhere as long as a customer has accessed the system. Thisย agreedย withย Evansย andย Lindsayย (2010)ย whoย statedย thatย secureย accurateย ATMย financialย transactions stimulate customer satisfaction which creates a good opportunity to convert themย intoย loyal customers whoย regularlyย useย ATM services.
Finding whether cash balance inquiry is effective via ATM at Stanbic Bank Ikeja, Branch Nigeria results indicate mean of 3.9944 and standard deviation of 0.5945. Majority of the participants agreed to this form of customer satisfaction that ATM provides an effective cash balance inquiry accompanied with financial transaction summary print upon the userโs request.
ATM provides a summary of most recent financial transaction of the account holder to facilitateย the users with track of records on their accounts which accelerates customer satisfaction.ย Thisย agreed with Liao and Cheung (2012) who argued that expectation of security and effective cashย balanceย inquiryย isย essentialย inย shapingย customersโย perceptionย ofย serviceย quality.
Finding whether ATM is located near to customers at Stanbic Bank Ikeja Branch Nigeriaย results indicate mean of 4.2153 and standard deviation of 0.5041. Majority of the participantsย agreed this form of customer satisfaction that ATM is located near to customers, which easeย accessibility to financial services.ย Proximity of the ATM point to customers ease accessibility toย accelerate customer satisfaction. This agreed with Mcandrews (2011) who argued that secure andย convenient location, adequate number of ATM, user-friendly system and functionality of ATMย play important role in customersโ satisfaction. Further, Joseph and Stone (2013) mentioned thatย adequateย numberย ofย ATMs,ย convenientย andย secureย location,ย user-friendlyย system,ย speed,ย minimum errors, high uptime, cash back-up, cost and service coverage are essential serviceย qualityย aspectsย of ATM.
Finding whether ATM facilitates ease transfer of cash transactions results indicate mean of 2.8472 and standard deviation of .9917. Majority of the participants were non-committal about this form of customer satisfaction, which probably implies that they rarely transfer cash transaction using ATM.
Policy Recommendationsย Recommendation 1:
Stanbic Bank Ikeja branch Nigeria should sensitize customers on the proper use of ATMย usingย localย mediaย likeย radioย westย andย televisionย west,ย churches,ย mosquesย andย theย likeย toย strengthenย customer satisfaction.
Recommendationย 2:
Stanbic Bank Ikeja branch Nigeria should provide support desk officers to educate customersย byย givingย themย properย instructionsย aboutย theย useย ofย ATMย cardย toย strengthenย customerย satisfaction.
Recommendationย 3:
Stanbic Bank Nigeria should procure modern technology to strengthen network signal to quickย processingย of ATM transactions inย order to arouse customerย satisfaction.
Recommendationย 4:
Stanbic Bank Nigeria should re-design the ATM user inter-face to have self-direction arrows forย customersย to follow in order to easeย its use.
Recommendationย 5:
Stanbic Bank Nigeria should reduce on ATM financial transaction charges to accelerate theย customer satisfaction. For example from the current financial transaction withdraws charge ofย N 1000 to Ush 500.
Recommendationย 6:
Stanbicย Bankย Nigeriaย shouldย improveย onย theย ATMย cardย securitiesย toย completelyย blockย unauthorizedย users in case, it get lost or stolen.
Recommendationย 7:
Stanbic Bank Nigeria should re-engineer a system to integrate a voice self-direction manual thanย readย onlyย manualย (mere words).
REFERENCE
- Adepoju, E. & Alhassan, B.ย (2010). Relationship between customer satisfaction and ATM useย outcomes: A study of private bank customers in Germany. The International Journal ofย Bankย Marketing, 4(5)44-47.
- Adhallah,ย T.ย (2010).ย Evaluationย ofย theย relationshipย betweenย ATMย servicesย andย customerย satisfactionย in South Africa. Journalย of Businessย management,ย 7(8)19-22.
- Anderson,ย R.Eย (2001),ย customerย dissatisfaction.ย Theย impact ofย disconfirmedย expectancyย onย perceivedย product performance.ย Journal ofย marketingย research, vol.10
- Ayo,ย L. (2010). Customer awareness and ATM useย upon consumer satisfaction. Journal ofย Consumerย Research.7 (8)49-54.
- Balunywa, K.ย (2003); Balunywa, L. (2014). ATM services and consumer satisfaction: A newย concept.ย Journal of finance, 40, April, pp. 25-33.
- Balunywa, W. J. (2003). A hand book of business management (4thย edition) Kampala. Theย business publishingย group.
- Cacioppo, A. (2000). User acceptance of information technology: system characteristics, userย perceptionsย and behavioral impacts.
- Cardozzo, R. (1965) & Yi, R. (1990). The Dissonance Theory about perceived outcome fromย consumptionย ofย products.