CHAPTER ONE
INTRODUCTION
Background of the Study
Automated Teller Machines (ATMs) are machines that execute account transactions for bank customers. A user typically puts a specific plastic card with information stored on a magnetic strip into an ATM. The strip contains an identification code, which is sent by modem to the bank’s central computer. A personal identification number (PIN) must also be entered by the user using a keypad to prevent illegal transactions. The computer then authorizes the ATM to conduct the transaction; most ATMs are capable of dispensing cash, accepting deposits, transferring funds, and providing account balance information. Banks have developed cooperative, countrywide networks so that a customer of one bank can use an ATM of another, and therefore all commercial banks’ ATMs, for cash access.
They provide significant benefits to both banks and depositors. Depositors may be able to withdraw cash at more convenient times and locations than during branch banking hours. Furthermore, ATMs lower the expenses of servicing some demand depositors by automating services that were formerly handled manually. These benefits are amplified when banks share ATMs, allowing depositors from other banks to access their accounts through one of their ATMs (Andrews, 2003).
Banks are now the primary providers of ATMs. Two reasons for this are that they want to expand their market share, albeit due to the widespread use of ATMs, this is unlikely to be the major mechanism by which ATMs enhance profitability for most banks, or that they want to increase their market share over a specific threshold.
The use of ATMs by banks and by bank clients in Nigeria is just getting started and has exploded in recent years. This is especially true in light of recent bank mergers, which has most likely made it possible for additional banks to build ATMs or at the very least join common networks (Fasan, 2007). The increased deployment of ATMs in the banking sector has made the issue of technology relevance important. In Nigeria, ATM services have been available for less than ten years. Initially, they were developed as elitist services for individuals who want exclusive services. Cards were scarce, and obtaining them was a difficult task.
The use of ATM cards is being widely pushed. According to Agboola (2006), the introduction of ICT in banks has resulted in generally favorable outcomes such as improved customer service, more accurate records, ensuring convenience in business time, immediate and fair attention, and faster services, among other things. In addition, the image of the banks has improved, resulting in a more competent market. Work has also been made easier and more exciting, enhancing banks’ competitive advantage, customer relationships, and the resolution of basic operational and planning issues. According to Fananopo (2006), debit card transactions in Nigeria increased by 93 percent over the previous years as a result of aggressive rollout attempts by Nigerian banks, aided by the interswitch network. Between January 2005 and March 2006, the amount of ATM transactions over the interswitch network jumped from 1,065,972 in 2004 to 21,448,615 in 2006. According to a recent poll done by Intermarc Consulting Limited, ATM services supplied by banks and non-financial organizations in Nigeria are the most popular e-business platforms in the country (Intermarc Consulting Limited, 2007). According to the survey, most people in Nigeria are only aware with the traditional financial services provided by Nigerian banks. According to the findings, 99 percent of the respondents knew about savings accounts, 92 percent knew about current accounts, and 72 percent knew about local money transfer services. However, among more modern banking services such as electronic banking, internet banking, POS transactions, and money transfers, ATMs emerged as the most popular, with 96 percent awareness. The amount of awareness about ATMs was likewise higher than the level of awareness about current events.
In recent years, bank clients in Nigeria have demanded efficient, rapid, and easy services in addition to the protection of their cash and increased returns on investments. Customers want a bank that will provide them with services that will match their specific needs and help them achieve their business objectives at any time, even after business hours. All of this is only possible with the help of ATMs.
Despite the positive impact of ATMs on bank customers, many of them do not use them. This is due to a number of complaints from ATM users who complain about problems arising from ATM fraudsters’ fraudulent activities as well as common challenges such as telecommunication breakdowns and the fact that most ATM machines in Nigeria are old.
Statement of Problem
The study’s major goal is to look into the effect of Automated Teller Machines on bank customer satisfaction. Other specific goals include the following:-
1. Examine how the Automated Teller Machine at United Bank of Africa improves client satisfaction.
2. Examine the advantages of utilizing an Automated Teller Machine (ATM) at United Bank for Africa for a customer.
3. Identify the obstacles that prevent United Bank for Africa from operating an ATM.
Objective of the Study
The study’s major goal is to look into the effect of Automated Teller Machines on bank customer satisfaction. Other specific goals include the following:-
1. Examine how the Automated Teller Machine at United Bank of Africa improves client satisfaction.
2. Examine the advantages of utilizing an Automated Teller Machine (ATM) at United Bank for Africa for a customer.
3. Identify the obstacles that prevent United Bank for Africa from operating an ATM.
Research Questions
The following research question is presented with responses in the study:
1. How does the United Bank of Africa’s ATM improve client satisfaction?
2. What are the advantages of utilizing an Automated Teller Machine (ATM) at United Bank of Africa?
3. What are the problems that United Bank for Africa faces in operating ATMs?
Statement of hypothesis
In this study, the following hypotheses were tested:
Ho1: Automated teller machines do not improve client satisfaction at banks.
HA1: Automated teller machines improve client satisfaction at banks.
Significance of the Study
The study will assist bank executives and policymakers to understand the Automated Teller Machine (ATM) as a major product of electronic commerce in Nigeria in order to make strategic decisions. The research is also significant because it will provide answers to the factors that are preventing the operation of Automated Teller Machines (ATM) in the United Bank for Africa. This work will also be useful to students, scholars, and researchers who may wish to conduct a similar study and will use it as a springboard for their own research.
Scope of the Study
The Automated Teller Machine (ATM), among other electronic banking implementations, will receive special attention in order to meet the study’s goal. To undertake an empirical analysis of the impact of Automated Teller Machines (ATM) on bank customer satisfaction in United Bank of Africa, as well as to evaluate the nature of ATM operation in United Bank of Africa from 2007 to 2011,
Definition of Terms
This study makes use of the key phrases listed below.
ATM Card: Debit cards are used by bank customers to make ATM transactions. The card is a complicated circuit that processes microprocessors with single chips that include the computer’s complex Arithmetic and Logic Unit. Customers can utilize Automated Teller Machines to do balance inquiries, mini statements, cash withdrawals, and transfers, among other things. This debit card can also be used to make online and POS purchases.
Chip card: A chip card is a card that contains one or more computer chips or integrated circuits for identification, data storage, or special purpose processing, such as validating personal identification numbers, authorizing purchases, verifying account balances, and storing personal information.
EDI stands for Electronic Data Interchange.
Electronic money is monetary value measured in currency units and saved in electronic form on a consumer’s electronic device. This electronic value can be purchased and stored on the device until it is lowered or transferred.
Mobile Banking: This is a service that allows consumers to access their accounts from anywhere. Customer transactions such as account balances, transaction enquires, stop checks, and other customer services instructions can be completed anywhere, including balance inquiry, account verification, bill payment, electronic fund transfer, account balances, updates and history, customer service via mobile, and account transfer.
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