Title page


Approval page



Table of content




1.1Background to the Study

1.2Statement of Problem

1.3 Objective of the Study

1.4Research Questions

1.5 Statement of Research hypothesis

1.6Significance of the Study

1.7Scope of the Study

1.8 Definition of key Terms


Literature Review

2.1 Introduction

2.2Concept of Automated Teller Machine

2.3 Automated Teller Machine and Risk Management Challenges

2.4 Nigerian Banks and Automated Teller Machine Wind of Change

2.5Strategic Imperatives of Automated Teller Machine in Nigeria

2.6 Customer Satisfaction through the use of Automated Teller Machine

2.7 The Benefit of Automated Teller Machine to Bank Customers and Banks

2.8 The challenges militating against Atomated Teller machine

2.9 Summary


Research Methodology

3.1 Introduction

3.2 Population and sample site of the Study

3.3 Sources of Data

3.4Method of Data Collection

3.5Method of Data Analysis



Data Presentation, Analysis and Interpretation


4.2Data Presentation

4.3 Test of Research Hypothesis

4.4 Interpretation of Finding

4.5 Summary of Finding


Summary, Conclusion and Recommendations

5.1 Summary

5.2 Conclusion

5.3 Limitation of the Study

5.4 Recommendations 

5.5 Suggestions for Further Research





1.2 Background of the Study

Automated Teller Machines (ATM) 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 (Okoh, 2010).

Globally, Automated Teller Machines (ATMs) 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. In addition, by automating services that were previously completed manually, ATMs reduce the costs of servicing some depositors of demand. These potential benefits are multiplied when banks share their ATMs, allowing depositor of other banks access their account through a bank’s ATM (Andrews, 2003). 

Banks have become the principal deployers of ATMs. Two reason for this are that they want to increase their market share, although due to the prevalence of ATMs, it is not likely to be the primary means by which ATMs increase profitability for most banks, or/and above a certain level of operations, the cost of a single transaction performed at an ATM is potentially less than the cost of a transaction conducted from a teller, as ATMs are capable of handling more transactions per unit of time than are tellers (Laderman, 1990).

In Nigeria the deployment of ATM by banks and its use by bank customers is just gaining ground and has burgeoned in recent times. This has happened especially after the recent consolidation of banks, which has in all probability, made it possible for more banks to afford to deploy ATMS or at least become part of shared networks (Fasan, 2007). The increased deployment of ATMs in the banking sector has made the issue of technology relevance important.  ATM services have a history that is less than ten years in Nigeria. At first, they were operated as elitist services designed for those desirous of exclusive services. Cards were rare and the process for obtaining them tortuous. 

Presently, the use of ATM cards has been widely promoted. Banks no longer appear to want personal contact with their customers. Some banks have resorted to penalizing the customer as it were, for not possessing an ATM card, by debiting the account of such a customer for withdrawing below a certain amount across the counters. Agboola (2006) reported that  although only a bank had an ATM in 1998, by 2004, fourteen of them had acquired the technology. 

Agboola (2006), discovered that the adoption of ICT 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 etc. 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. Fananopo (2006) stated that Nigeria’s debit card transaction rose by 93 percent over pervious years owing to aggressive roll out initiatives by Nigerian banks, powered by interswitch network the number of ATM transactions through interswitch network had increased from, 1,065,972 in 2004, to 21,448,615 between January 2005 to March 2012.

This is a rise of 92.6 percent with respect to the pervious years. More than 1700 ATMs have been deployed on the network, while about 12 million cards have been issued by 18 banks as at March 2012.

A recent survey conducted by Intermarc Consulting Limited revealed that ATM services provided by Nigeria by banks and non-financial institutions stood as the most popular e-business platforms in Nigeria (Intermarc Consulting Limited, 2007). The report showed that awareness for various banking services rendered by Nigerian banks is mostly limited to the traditional banking services. The findings shows that 99% of the respondents were aware of savings account, while 92 where aware of current accounts and 72 percent are aware of local money transfer services. However, among the more modern banking services such as electronic banking, internet banking, point of sales (POS) transactions, money transfer, ATMS emerged as the most popular with 96 percent awareness level ATM awareness also ranked higher than awareness level about current accounts and slightly below savings account (Omankhanlen, 2007).

Hence, there is clearly a need to study the impact of automated teller machine (ATM) on bank customer satisfaction. It is against this background that the research sees the subject-matter worthy of investigation.

1.2 Statement of Problem

In recent times in Nigeria, customers of banks are no longer only concerned about safety of their funds and increase return on investments but demand efficient, fast and convenient services. Customers want a bank that will offer them services that will meet their particular needs and support their business goals at any given time, even after working hours. All these are only achievable through the use of ATMs.

Inspite of this laudable impact of ATMs to bank customers, a lot of them do not subscribe to it’s use, owing to several complaints from some ATM users who complain about problems arising from fraudulent activities of ATM fraudsters and normal challenges, such as telecommunication break down, age which makes most ATM machines in Nigeria to run on generators, UPS and inverters. As such doubt is expressed about the impact of Automated Teller Machines (ATM) on bank customer satisfactions. It is against this,the the researcher  focused the impact of ATM, on customers satisfaction in UBA plc magadishu Branch Kaduna.

1.3 Objective of the Study       

The main objective of the study is to examine the impact of Automated Teller Machine on bank customer’s satisfaction. Other specific objective include to:-

1. Investigate how Automated Teller Machine enhances customer’s satisfaction in United Bank of Africa.

2. Examine the benefits a customer derives from using Automated Teller Machine (ATM) in United Bank for Africa.

3. Identify the challenges militating against ATM operation in United Bank for Africa.

1.3 Research Questions

In the study the research question below is proferred with answers;

1. How does ATM enhance customer’s satisfaction in United Bank of Africa?

2. What benefits do customers derive from using Automated Teller Machine (ATM) in United Bank of Africa?

3. What are the challenges militating against ATM operation in United Bank for Africa?

1.5 Statement of hypothesis

The stated hypotheses tested in this study;

Ho1: Automated teller machine does not enhance bank customer satisfaction.

HA1: Automated teller machine enhances bank customer satisfaction.

1.6 Significance of the Study

The study would enable banks executives and indeed the policy makers of the banks and financial institutions to be aware of Automated teller Machine as a major product of electronic commerce in Nigeria with a view to making strategic decisions. The research is equally significant because it would provide answers to factors militating against the operation of Automated Teller Machine (ATM) in United Bank for Africa this work would also be useful to student, scholars and researchers who may wish to undertake a similar study as they will use it as springboard to their own work.

1.7 Scope 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 order to conduct an empirical investigation into the impact of Automated Teller Machine (ATM) on Bank customer satisfaction in United Bank of Africa and will also examine the nature of Automated Teller Machine operation in United Bank for Africa from 2007 to 2011.

1.8 Definition of Terms

The Key terms below are used in this study

ATM Card:- Debit card use by banks customer in making transactions via ATM. The card is a complex circuit that process microprocessors with single chips that contain the complex Arithmetic and logic unit of computers. It provides access to customers to perform balance inquiry, mini statement and cash withdrawal as well as transfers through the use of Automated teller Machines. This Debit card can also be used for internet online and POS transactions.

Chip card:- This is a card containing one or more computer chips or integrated circuits for identification, data storage or special purpose processing used to validate personal identification numbers, authorize purchases, verify account balances and store personal records.

Electronic Data Interchange (EDI):  The transfer of information between organization machines readable form.

Electronic money:- Monetary value measured in currency units stored in electronic form on electronic device in the consumer’s possession. This electronic value can be purchase and held on the device until reduced through purchase or transfer.

Mobile Banking:- This is a product that enables the bank to offer customers to access services anywhere. Customer can make their transactions anywhere such as account balance, transaction enquires, stop checks, and other customers services instructions balance inquiry, account verification, bill payment, electronic fund transfer, account balances, updates and history, customer service via mobile, transfer between account etc.  

Banking: The business receiving money from outside as deposit for safe keeping and making payment accrued which the money is due for payment and also advancing loans to those who keeps money for safe keeping as well as the public at large.

Account: Is a period during which transactions takes at the end and in which settlement must be made

Banker: These refers to group of persons who receive money from individuals for safe keeping in the agreement that he will refund the said amount collected either on demand or at some certain date agreed upon.

Cheque: It is an order written by the owner to the banker to pay on demand to the bearer of the cheque.

Dishonored Cheque: A cheque, which the bank refused to attend to for one reason or the other e.g irregular signature, post dated cheque etc.

Loan: The amount of money that is lend out and that must be repaid within an agreed rate of interest usually for specific period of time.

Pass Book: It supplied to the customer by the bank in which all entries are made of all deposits and withdrawals that are made.

Unpresented Cheque: These are cheque drawn by the drawer but not yet presented for payment by the bearer.

Overdraft: Is usually created on a current account unlike a loan account where only periodical payments are made.  An overdraw account is a running account where drawing and deposits are made.  An overdraft account is a running account where drawing and deposits are made.  In an overdraft account as frequently as may be needed or received in connection with the business to meet the account related.

Payment System – A financial system that establishes that means for transferring money between suppliers and of fund, usually by exchanging debits or Credits between financial institutions.

Point Of Sale (POS) Machine - A Point-of-Sale machine is the payment device that allows credit/debit cardholders make payments at sales/purchase outlets. It allowed customers to perform the following services Retail Payments, Cashless Payments, Cash Back Balance Inquiry, Airtime Vending, Loyalty Redemption, Printing ministatement etc.

Smart Card – A Card with a computer chip embedded, on which financial health, educational, and security information can be stored and processed.

Transaction Alert - Our customers carry out debit/credit transactions on their accounts and the need to keep track of these transactions prompted the creation of the alert system by the Bank to notify customers of those transactions. The alert system also serves as notification system to reach out to customers when necessary information need to be communicated.

Western Union Money Transfer (WUMT) - Western union Money transfer is a product that allowed people with relatives in Diaspora who may be remitting money home for family up-keep, Project financing, School fees etc. Nigerian Communities known for having their siblings gainfully employed in other parts of the world are idle markets

ICT: Acronym for Information and communication technology.

ATM: Acronym for Automated Teller Machine

MIS: Acronym for management information system

Online-real-time: Electronic banking through internet and computer network




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