EFFECT OF AUTOMATED TELLER MACHINE ON SERVICE DELIVERY IN ZENITH BANK, WUSE ABUJA

EFFECT OF AUTOMATED TELLER MACHINE ON SERVICE DELIVERY IN ZENITH BANK, WUSE ABUJA

ABSTRACT

The study explores the use of ATM services at Wuse Branch of Zenith Bank Plc. Abuja Nigeria. The main objective of the study is to examine the effect of Automated Teller Machine on customer’s satisfaction. This was done by analyzing customer knowledge on ATM service, determining customer perception on the benefits and problems of the ATM services and also determining strategies the customers prefer the bank manager adopts in other to improve upon ATM services at the branch. Questionnaires were the main instrument used for the data collection and it was solicited from 295 respondents using chi-square method to break the sample unit according to their level of education. Both primary and secondary data sources were used for the study. Questionnaires were used in gathering the primary data. The secondary data sources included the branch teller transaction reports, branch customer complain file, journals and the internet. It was found that most of the customers have a good knowledge on the services offered by the ATM. A major problem found through the study was that the ATM is associated with technical problems such as frequent network failures and frequent breakdowns.it was found that the ATM withdrawal charges for saving account holders were high. It was therefore concluded that majority of ATM subscribers have a good knowledge on the services offered by the branch ATM. The motivating factor for using the branch ATM services are privacy in carrying out banking transactions, time saving element and the flexibility in use. The demotivating factors that prevented respondents from using the branch ATM are high charges, technical failures and unfavorable daily withdrawal limit.

CHAPTER ONE

INTRODUCTION

1. BACKGROUND OF THE STUDY

In today’s contemporary business environment, the need for Automated Teller Machines cannot be overemphasized. According to Mohammed and Bitange (2017) asserted that the banking industry adopted the ATM concept for reducing costs and providing better services for the customers. The first ATM was installed in the early 1967 by Barclays Bank in London, UK. The banks started installing ATM machines in the bank buildings first where a cash dispensing machine was not linked to the account directly (Mohammed and Bitange, 2017). With the speed of internet connectivity, the ATM machines have become a part of the urban landscape and available at parks, shopping malls or airports with many more services on offer than just cash dispensing Mohammed and Bitange 2017 cited in Abdelaziz, Hegazy and Elabbassy (2010).

Aliyu, Ladan, Isa and Hassan (2019) asserted that we live today in an increasingly digital world and technology is making a tremendous impact in all organizations that provide services and banking sector is no exerption. ATM is designed to flourish within societies where time is precious and money readily available Aliyu et al (2019). The card contains a unique card number and some security information such as serial number, an expiration date, etc. Aliyu et al (2019). The card is thus replacing cheque, personal attendance of the customer, banking hour restrictions as well paper based verification Aliyu et al (2019).cited in Sultan and Kormal (2009). ATMs allow customers to perform a number of banking transactions such as withdrawing cash from one’s account, making balance enquiries, transferring funds from one account to another and effecting payment of bills,usually done by imputing the four-digit Personal Identification Number (PIN) for the specific ATM card, known exclusively to the holder Aliyu et al (2019). The technology promotes faster service delivery as customer can withdraw cash up to a certain limit anytime of the day and not wait to be attended to by the personnel of the bank. It is a common phenomenon in our society to see queues inside the banking hall, struggling to receive services and at times quelling Aliyu et al (2019). Today with the introduction of ATMs in our society, the story has changed. ATMs are located in convenient places such as the airport, railway stations, hotels etc.Aliyu et al (2019).

The term Electronic Banking Services refer to the provision of information or services by a bank to its customers via a mobile phone, ATM, computer or television. Abubakar, Tasmin, Mohammed and Takala (2013) cited Allen, McAndrews and Strahan (2001). The concept of electronic banking has been defined in many ways. Abubakar et al (2013) cited in Daniel (1999) defines Electronic Banking as the delivery of bank information and services to customers via different delivery platforms that can be used with different terminal devices such as Mobile Banking, ATM and Online Banking etc.

1. STATEMENT OF THE PROBLEM

The effect of automated teller machine cannot be ignored if meaningful goals and objectives are expected to be achieved. Automated teller machine is introduced into the banking system to enhance good service delivery, efficient customer satisfaction and decongest queues in the banking hall, enable customers withdraw cash 24/7, aid international payment and remittance, track personal banking transaction, request for online statement, or even transfer deposit to a third party account. Despite the effort of banks to ensure that customers reap the benefits of e-banking, the bank is met with complaints from customers as regards malfunctioning Automated Teller Machines (ATMs), network failure, online theft and fraud, unavailability of financial services, payment of hidden cost of electronic banking like Short Message Services (SMS), for sending alert, mandatory acquisition of ATM cards, non-acceptability of Nigerian cards for international transaction amongst others. The use of outdated or inappropriate technology, lack of adequate knowledge and information pertaining to the machine being used is another problem facing automated teller machine.

1. OBJECTIVES OF THE STUDY

The main objective of the study is to examine the effect of Automated Teller Machine on customers satisfaction. Other specific objectives are:

1. To investigate how automated machine enhances customers satisfaction in Zenith bank.
2. To examine the benefits a customer derives from using automated teller machine (ATM) in Zenith bank.
   1. RESEARCH QUESTIONS

In order to get information from respondents the following questions where formulated:

1. How does ATM enhance customers satisfaction in Zenith bank?
2. What benefits do customers derive from using automated teller machine (ATM) Zenith bank?
   1. STATEMENT OF HYPOTHESIS

In order to assess the appraisal for the implementation of automated teller machine on customers satisfaction in Nigeria, the following hypothesis are to be tested:

Ho: Automated teller machine has no significant effect on customer satisfaction

Hi: Automated teller machine has significant effect on customer satisfaction

Ho: There are no benefits that customers derive from using Automated teller machine

Hi:There are benefits that customers derive from using Automated teller machine

1. SCOPE AND LIMITATION OF THE STUDY

In pursuance of the objective of the study, attention shall be focused on automated teller machine (ATM) among other electronic banking implementation. in other to conduct an empirical investigation into the impact of automated teller machine (ATM), the researcher intends to restrict the study to the impact of automated teller machine in Zenith bank Abuja, Nigeria.

The researcher encounters some problems which are listed below:

Time constraint: Time as we all know is a major raw material that needs carefulness in the use of bringing the best out of one’s effort. Time was one thing the researcher never had as the time of this project coincides with my exams.

Financial constraint: The researcher encountered some financial problems which affects the time of completion of this work.

Lack of materials: Sourcing for materials was very difficult in the course of the research, some articles and journals were protected while some library lacks the required books for my research.

1. SIGNIFICANCE OF THE STUDY

The significance of the study is to contribute to existing knowledge of the introduction of automated teller machine and to enable the banking public to be aware of how to use ATM as a tool for enhancing customer satisfaction and improve service delivery.

This research will help the management and other stakeholders of the banking sector to understand how best thet can customize the ATM to curtail e-fraud and to meet the increased and changing needs of the customers.

The study will also act as reference materials to other students pursuing studies in similar subjects.

1. HISTORICAL BACKGROUND OF ZENITH BANK PLC.

Zenith Bank was established in May 1990 and commenced banking operations in July of the same year. At inception, it had a capital base of $4 million. It began operations during a period of government liberalization of the banking sector when the central bank granted up to twenty banking licences a year to investors. The bank’s first office was originally a residential house in Victoria Island that was modified into a banking hall. In its early years, the bank witnessed a period of rapid growth. In 1997, following a directive for banking institutions to shore up their capital base, Zenith increased its capitalization to 500 million naira.

The Nigerian banking industry of the early 1990s was led by a select group of four major banks: Union Bank, First Bank, UBA and Afribank. In 1999, Zenith bank embraced the use of the internet for marketing of financial services and to promote the use of online banking by consumers and becoming one of the earliest companies to invest in online banking. In the early 2000s, Zenith’s profile began to rise, its investments in information technology helped it compete against the major banks that had a larger branch outreach and it soon began to announce net profits comparable to some of the older big banks.

On 17 June 2004, following a successful IPO, the bank became a public limited company. On 21 October 2004 its shares of stock were listed on the Nigeria Stock Exchange (NSE). The bank’s shares are traded on the London Stock Exchange (LSE) following a listing of the $850 million worth of its shares at $6.80 each, in 2013.

The bank has equity investments in Zenith Custodian, Zenith Securities and Zenith General Insurance. Zenith Bank has more than 500 branches and business offices in all states and the Federal Capital Territory.Zenith Bank maintains subsidiaries in the United Kingdom, United Arab Emirates, Ghana, Sierra Leone and The Gambia. The Bank also has an office in China.

1. DEFINITION OF KEY TERMS

Most terms used in this project are used in their conceptual and general usage and therefore, requires no further definition. However, a few of them require some explanation or qualification as to give room for better understanding. Some of these terminologies include:

1. Automated Teller Machine (ATM): Are mechanical devices that can provide a variety of routine banking services without the aid of human teller e.g the ATM replaces queue personal attendance of the customers, banking hours restrictions and paper verifications.
2. Technological infrastructures: This is the scientific knowledge used in practical way in developing and designing new machine as equipment.
3. E-payment: It is a device that can post and transfer money and serve and pay bank customers outside the banking hall queue.
4. Deposit Money Bank (DMB): These are those licensed commercial banks or retail banks.
5. Central Bank of Nigeria (CBN): This can be defined as the only financial institution charged with the responsibility of controlling other financial institution and stabilizing the economy of Nigeria. It is bank to other banks and government.
6. Pro: An advantage or progressive aspect of something
7. Cons: The negative aspect of or disadvantage of something.