ASSESSMENT OF THE EFFECT OF AUTOMATED TELLER MACHINE (ATM) SERVICE ON CUSTOMER SATISFACTION (A CASE OF COOPERATIVE RURAL DEVELOPMENT BANK (CRDB) SINGIDABRANCH)


ASSESSMENT OF THE EFFECT OF AUTOMATED TELLER MACHINE (ATM) SERVICE ON CUSTOMER SATISFACTION (A CASE OF COOPERATIVE RURAL DEVELOPMENT BANK (CRDB) SINGIDABRANCH)  

ABSTRACT

The study explores the use of the ATM services at Singida town. The main objective of the study is to make assessment on extent to which Automated Teller Machine (ATM) satisfy customer needs in Singida branch underlining the low patronage of ATM services at the branch. This was done by analyzing customer usage knowledge on ATM services, ATMs efficient and ATMs convenient. The study adopted the descriptive approach which uses quantitative method of data collection and analysis.

Questionnaires were the main instrument used for the data collection and it was solicited from 100 respondents using simple random sampling method. 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. The motivating factors for using the ATM services are reliability, safety and accuracy.

Further study should be carried out to find out how the long queues seen in the banking hall especially during the end of the months affects man hours for customers and the overall effect on the development of CRDB Singida branch.

TABLE OF CONTENTS

DECLARATION iii

CERTIFICATION iv

COPYRIGHT v

ACKNOWLEDGEMENT vi

DEDICATION vii

ABSTRACT viii

TABLE OF CONTENTS ix

LIST OF TABLES xii

LIST OF FIGURES xiii

LIST OF ABBREVIATIONS xiv

CHAPTER ONE 1

INTRODUCTION 1

Introduction1

Background of the study1

Statement of the problem6

Research objective7

General objective7

Specific objective7

Research questions7

Hypothesis of the study7

Significance of the study.8

NMB8

Researcher and Academicians8

Banks8

Scope of the study8

Limitation of the Study8

Definition of terms9

Automated Teller Machine (ATM):9

Customer‟s Satisfaction:9

Bank9

1. 11 Organization of the Study 9

CHAPTER TWO 10

LITERATURE REVIEW 10

Introduction10

Theoretical literature review10

Assimilation Theory10

Social Exchange Theory11

Empirical Literature Review12

Knowledge on ATMs Usage12

ATMs efficiency13

Convenience of ATMs13

Research gap14

Conceptual Framework15

Definition of variables16

ATMs efficiency16

Convenience of ATMs17

ATM usage knowledge17

Chapter summary18

CHAPTERTHREE 19

RESEARCH METHODOLOGY 19

Introduction19

Area of study19

Research philosophy and approach19

Research Design and Techniques21

Sampling design22

Population and Target Population22

Sampling Frame22

Sampling Techniques22

Simple Random Sampling22

Sample Size22

Data collection methods and instruments23

Questionnaire24

Data Analysis Methods24

Validity and Reliability Instrument24

Validity Instrument24

Reliability Instrument25

Research ethics25

Chapter Summary25

CHAPTER FOUR 27

DATA ANALYSIS, INTERPRETATION AND DISCUSSION 27

4.1 Introduction 27

Demographic or Personal Information27

Gender of respondents27

Age of Respondents28

Marital status28

Education Level of Respondents29

Test of Reliability and Validity30

Finding in relation to Objectives31

Impact of ATMs efficiency to customer satisfaction31

Factors that influence convenience of ATM to customer satisfaction37

Impact of ATM usage knowledge to customer satisfaction37

Test of Hypothesis38

Correlation analysis38

Regression analysis40

4.6. Discussion of Findings 42

4.7 Chapter Summary 44

CHAPTER FIVE 45

SUMMARY, CONCLUSION AND RECOMMENDATIONS 45

5.1 Introduction 45

Summary45

General Summary45

Summary of Findings46

Implication of Findings46

The Government46

Banking Industry47

CRDB47

The Researcher47

Limitations of the Study47

Conclusion47

Recommendation48

Recommendations for Action48

Recommendations for Future Research49

REFERENCE 50

APPENDICES 52

APPENDIX I 52

APPENDIX II: 53

SECTION A: Personal Information 53

SECTION B: SPECIFIC QUESTIONS 54

LIST OF TABLES

LIST OF FIGURES

LIST OF ABBREVIATIONS

ABM - Automated Bank Machine ANOVA - Analysis of Variance

ATM - Automated Teller   Machine IBM - International Business Machine

CRDB - Cooperative Rural Development Bank PIN - Personal Identification Number RUCU - Ruaha Catholic University

SPSS - Statistical Package for Social Science TAM - Technical Accountant Manager

VISA - Virtual Instrument Software Architecture

CHAPTER ONE INTRODUCTION

Introduction

This chapter covers the background information on the Automated Teller Machine (ATM) and its effects on customers` satisfaction. It provides a real image of what an ATM is its history in the world, how it works and some problems associated with the use of ATM in banking services also research objectives, research questions, hypothesis, scope of the study, and significance of the study as well as the definition of the key terms.

Background of the study

In banking industry, e-services are revolutionizing the way business is conducted. Electronic based business models are replacing conventional banking system and most banks are rethinking business process designs and customer relationship management strategies. It is also known as e-banking, online banking which provides various alternative e-channels to using banking services i.e. ATM, credit card, debit card, internet banking, mobile banking, electronic fund transfer, electronic clearing services etc. however, as per Tanzanian e-banking scenario ATM and mobile banking are most acknowledged than other e-channels(Singh and Komal, 2009).

Automated Teller Machine (ATM) refers to a machine that acts as a bank teller by receiving and issuing money to and from the ATM account holders/users (Singh, 2009). ATM means neither “avoids traveling with money” nor “any time money,” but certainly implies both (Singh and Komal, 2009). ATM cards are fast replacing confounding withdrawal forms as a convenient way of getting your money from banks. In a way, they are rewriting the rules of financial transaction. A smart person no longer needs to carry a

wallet-full of paper money; rather, what he/she needs to do is to fish out an Automated Teller Machine (ATM) card from his/her pocket, insert it in the slot of the machine, punch in a few details and go home with hard cash (Singh and Komal, 2009).

The history of ATM can be traced back to the 1960s, when John Shepherd-Barron who was managing director of De La Rue Instruments invented the first ATM machine. That machine used by Barclays Bank (Barclays Bank in Enfield Town in North London, United Kingdom) on 27 June 1967 (Anderson, 1993).

ATM is designed to perform the most important function of bank. The plastic card is replacing cheque, personal attendance of the customer, banking hour‟s restrictions and paper based verification. ATMs are used as springboard for Electronic Fund Transfer. ATM itself can provide information about customers account and also receive instructions from customers - ATM cardholders. An ATM is an Electronic Fund Transfer terminal capable of handling cash deposits, transfer between accounts, balance enquiries, cash withdrawals and pay bills (Hood, 1976). In many parts of the world the majority of bank customers regularly use Automatic Teller Machines (ATMs) and today‟s western youth have not known a world without them. For them, the prevailing Perception of a cash machine is that of a tool providing a familiar functionality of basic financial information and dispensing cash. The technology is hidden from sight; the computer is invisible. It has taken approximately 30 years to establish ATMs as ubiquitous examples of public walkup-and-use devices. The adoption has not been straightforward, requiring trust in the technology and willingness to modify behavioral strategies in the very sensitive domain of personal finance. Financial institutions have played a major, sometime coercive, role in encouraging ATM adoption. The ATM flourishes within societies where time is precious and money readily available. This culture is composed of individuals, who have personal bank accounts and access to a wide range of technology. For these individuals, ATMs are convenient and reliable everyday artifacts: push a few buttons and get the money. As ATMs cross-new borders and pervade different cultures, it is imperative to understand the role of cultural

characteristics on people‟s Perception of, attitudes towards, and action on, the machine. This understanding is instrumental in facilitating technology uptake and improving design localization, or the process of infusing a specific cultural context into products designed for different cultures (Anderson, 1993).

In Africa, ATMs are being introduced for the first time and we must understand the new users who live within a culture, which may bring new factors into the adoption curve. It concentrates on urban Africa but the approach can be generalized to cover other public (and personal) technologies, as well as other developing markets.

African Banking industry is witnessing an unprecedented competition. To stay ahead, banks are coming up with plethora of services to lure customers. Services like 24 hour banking, service at door step, telephone banking, internet banking, Extended Business Hours (EBH), speedy processing are only a few to mention. Greater part of today's bank transactions take place somewhere else other than in branch premises (Krishna and Rao, 2006).

Though, the aim of these services is to satisfy customers, there is a need to understand customer awareness, Perception and importantly the level of satisfaction. Efforts are directed to attract and retain customers by offering them a basket of tailor made schemes supported by a state of the art distribution system (the ATMs). The whole exercise is helping banks to serve their customers fast and avoid human intervention totally. And for the customers, ATMs offer hassle-free cash withdrawal. No more fighting with the bank's teller for change and fresh notes. The total cash movement through ATMs in Africa is already between Millions of shillings (local currency) every year.

In future, things are going to be even more different and challenging. The ATM has become a medium for non-cash transactions such as payment of bills, insurance payments, printing of statements or even accessing the internet (Krishna and Rao, 2006). Tanzania banking sector has adopted the use of ATM in offering services. Cooperative

Rural Development Bank (CRDB) Singida branch introduced ATM services in 2009, and now customers are accessing the service.

First automated banking machine was the creation of an American inventor and businessman named Luther Simjian. . Simjian held patents on all kinds of things including, a self-focusing camera and a teleprompter but he was best known for his work on the Bankograph, a machine that could accept cash or check deposits at any hour of the day or night. In (1960, Simjian) managed to persuade a New York City bank to take a few of his automatic-deposit machines. So that customers could trust that they would see their money again, there was a microfilm camera inside the Bankograph that took a snapshot of every deposit. Customers received a copy of the photo as their receipt. In 1967, a Scottish inventor named John Shepherd-Barron was sitting in the bathtub when he had a flash of genius say that if vending machines could dispense chocolate bars, why couldn‟t they dispense cash? Barclays, a London bank, loved the idea, and Shepherd- Barron‟s first ATM was installed in a branch on Enfield High Street not long afterward. Unlike modern ATMs, Shepherd-Barron‟s did not use plastic cards. Instead, it used paper vouchers printed with radioactive ink so that the machine could read them. The customer entered an identification code and took her cash–a maximum of £10 at a time. The first automated banking machine in the world was devised by a Dallas engineer and former professional baseball player named Donald Wetzel. Wetzel‟s machine used plastic cards like the ones we use today. (Instead of radioactive ink, the cards stored account information in magnetic strips.) (Musiime and Biyaki, 2010).

Thirty seven years ago, on 1981, Standard Bank Group became the first of the major commercial banks in Africa in South Africa to introduce automated teller machines (ATMs) when it launched Auto Bank. The first ATM was a far cry from machines of today. We selected the IBM machine and the first live introduction to the public was at the trade exhibition called “Rand Show” in Johannesburg. On the same day Auto Bank went live at twenty five machines installed outside thirteen Standard Bank branches in selected high-density areas of Johannesburg, where there was a big demand for after

hour‟s cash facilities. National expansion of Auto Bank soon followed. Auto Bank could perform a normal cash withdrawal in 20 seconds and a balance enquiry in 60 seconds. At first Auto Bank operated only from 7am to 7pm, Monday to Saturday, but it soon became available on Sundays from 9am to 2pm. Mid-1982 saw extension of Auto Bank hours to 24 hours daily except on Sundays when operating hours were 8am to 2pm. A 24 hours a day, seven days a week availability was achieved towards the end of that decade (Balunywa, 2003).

The history of ATM in Tanzania is that banking services were rendered on manual basis characterized by, ledger keepers at back office, cashiers providing front desk service, ledger cards, cash registers among others. This is not only tedious, but also strenuous and slow besides providing inaccurate and unreliable information on a regular basis because of the human error. In 1993, Standard Chartered was the first Bank in Tanzania to introduce the Automated Teller Machine (ATM).

The evolution of Automated Teller Machine 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 service provision as well as efficiency, expansion due to the increase in demand for services (Kathleen, 2005). Balunywa, (2003) discovered that the use of ATMs in banks has produced largely positive outcomes such as improved customer services, more accurate records, ensuring convenience in business time, prompt and fair attention, and faster services and these make customer to be satisfied. Also, the banks‟ image is improved creating a more competent market. Work has also been made easier, and more interesting, the competitive edge of banks, relationship with customers, and the solution of basic operational and planning problem has been improved.

Therefore, this study wanted to assess the extent to which Automated Teller Machine (ATM) satisfy customer needs in Singida Town.

Statement of the problem

The impact 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 services delivery and efficient customer satisfaction (Omankhanlen, 2010).

The use of ATM is a new way of accessing banking services necessitated by customers` business needs and is enabled by fast changing technology like Internet. Due to achievements brought about by increased utilization of Information and Communication Technology (ICT) in society, the banking industry has introduced ATM. ATMs provide a new method of dispensing customer services which are expected to increase efficiency, sales performance, and enhance customer satisfaction (Mboma, 2011).

But the use of ATM banking systems 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 of all the merits of the ATMs, customers still complaint 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 (Mohd, 2015).

There exist valuable empirical literatures that study the ATMs advantages. These include Awitta (2016) and (Gachanja, 2016); however, not much literature investigates actual effect of automated teller machine in Tanzania Msaki et al (2016). This study therefore seeks to fill the literature gap in the country specific study by exploring the effect of automated teller machine to customer satisfaction in CRDB Bank, Singida branch.

Research objective

General objective

Generally this study sought to assess the effect of ATM system to customer satisfaction, a case of CRDB Singida branch.

Specific objective

More specifically the study attempted to:

i. To examine the impact of ATMs efficiency to customer satisfaction.

ii. To identify factors that influence convenience of ATM to customer satisfaction.

iii. To examine the impact of ATM usage knowledge to customer satisfaction.

Research questions

The study was guided by the following research questions;

i. What are the impacts of ATMs efficiency to customer satisfaction?

ii. What are the factors that influence convenience of ATM to customer satisfaction?

iii. What are the impacts of ATM usage knowledge to customer satisfaction?

Hypothesis of the study

Ha1There is a significant relationship between ATMs efficiency and customer satisfaction.

Ha2There is a significant relationship between convenience of ATMs and customer satisfaction.

Ha3There is a significant relationship between ATM usage knowledge and customer satisfaction.

Significance of the study.

NMB

The findings of the study will help NMB as well as the banking industry by showing how quality services offered by ATM service points are essential.

Researcher and Academicians

The study will also be used as a partial fulfillment for the awards of a bachelor degree. This study can also be of great importance to future scholars who will pursue research in fields related to ATM system of banking and service satisfaction.

Banks

The conclusions and recommendations of the study will be used to help the banking industry in the identification of the weaknesses in the use of ATM system of banking on the ways of improving its services

Scope of the study

This study was carried out at NMB Bank; the branch of Singida Municipality is selected so as to provide the information that can be used in the research .This study will examine extent to which Automated Teller Machine (ATM) satisfy customer needs in Singida town. The researcher decided to carry out the study in the branch because of the ever-long queue at the bank‟s ATM service point day in day out but worst at the end of the month.

Limitation of the Study

Researcher expected to face the following challenges during conducting this study:

i. Some of important information would not be disclosed from the respondents due to issue of confidentiality of information.

ii. Financial problem would arise since researcher will use his own pocket and not from any sponsor.

Definition of terms

Automated Teller Machine (ATM):

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).

Customer’s Satisfaction:

Cacioppo (2000) defines Customer satisfaction as the state of mind that customers have about a company when their expectations have been met or exceeded over the lifetime of the product or service.

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).

1. 11 Organization of the Study

This study comprises five chapters. Chapter one unveils the problem which informs the study and its context. It provides the justification for the study. Chapter two presents a review of relevant literature, synthesis and research gap to the study. Chapter three describes the research methodology and procedures of data collection and analysis. Chapter four entails data presentation, analysis and discussions, while chapter five provides the summary, conclusions and recommendations of the study. References and appendices cover the last part of the study.

.

ASSESSMENT OF THE EFFECT OF AUTOMATED TELLER MACHINE (ATM) SERVICE ON CUSTOMER SATISFACTION (A CASE OF COOPERATIVE RURAL DEVELOPMENT BANK (CRDB) SINGIDABRANCH)



TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.NET
Researchwap.net is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.net guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.net is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.net" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.