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CHAPTER 1
INTRODUCTION TO THE STUDY
This chapter takes into consideration the background of the study, statement of the
problem, objective of the study, significance of the study, limitation of the study, and
the organization of the chapters.
1.1 Background
The 21st century has produced great achievements brought about by
Information Technology Development. It has brought changes that people have never
experienced before. We can talk of it in communication production facilities that have
given a new position through automated, quick, economical and reliable services.
Businesses in the world now experiences growth in the digital economy that has
provided a new stand for new methods and strategies of doing business which has
further challenged the traditional way of doing business. Digital technology uses
electrons to transfer information that conclude transaction or enhance decision-
making.
One of the areas where society has increased the utilisation of Information
Technology is in the banking industry. Using Information Technology Development
in banking means you are looking at the operational limitation caused by the
increased number of transactions that were created by customers increase in demand
for services. Certain services that are routine in nature such as cash withdrawal,
checking of balances and statements are now provided without the help of a human
teller. All these were done through the introduction of computers that were later
integrated with telephone systems, faxes and Automated Teller machines.
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Automated teller machines are electronic devices, which allow banks customers to
make cash withdrawals and check their balances 24 hours a day without the aid of a
human teller (Cox, 1992). Cash holders are given cards and personal identification
numbers (PIN) to remember and use when accessing the facility to withdraw money
from their accounts. The machines are placed in areas that are convenient to
customers who can access services twenty-four hours a day. The services are
available at bank branches, airports, large retail stores such as super markets, hotels,
restaurants and other designated places. ATMs dispense cash faster than the manual
operations. They are automatic and less expensive (Cox, 1992) which is helping to
keep banks operating cost low.
1.2 Statement of the problem
For a bank to be more attractive in order to get more customers it must pay very
good attention to certain factors and this includes it timelines, accuracy, competency,
flexibility, professionalism and easier banking. These are some of the things that
customers find interest in, and will want to experience in the bank they wish to
transact business with. This is so because the Ghanaian customers in this modern
business environment are now very conscious with their time and will want to avoid
the traditional way of banking where customers join a long queue before they will be
served. The manual way of banking was not providing quality services as customers
were expecting thus making the banking system unattractive to customers. In
addressing those customer interests, banks have introduced electronic payment
schemes using access devices such as smart cards, point of sales terminals and ATMs.
In Ghana, some banks including Barclays Bank, Ghana Commercial Bank, Standard
Chartered Bank, ECOBANK, National Investment Bank and many others have
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installed ATMs at their branches. They provide customers with services such as cash
withdrawals, balance inquiries and mini- statements. Some of the banks ATMs are
networked worldwide and therefore can be used by people who are not customers of
that bank provided they are holders of master and visa cards. With these it is believed
that the problems which were in existence during the traditional way of banking will
be solved. As Kabalika (1999) was trying to investigate customer interactions with
technological interfaces, he established that automation enhances satisfaction. Thus
this research went further in looking at the points listed below.
Customers views about ATM and it service delivery.
Whether ATM services enhance satisfaction or not.
Some of the problems customers faces when using ATMs or some of the
negative features of the ATM.
Some of the factors that influence ATM services leading to satisfaction and
some of the factors that influence ATM leading to dissatisfaction.
1.3 Objective of the Study
The main objective of the study is to assess customers views about the ATM
and it service delivery.
Specifically, the study sought
To determine whether customers are happy about the introduction of ATM
into the banking system and the kind of services they provide.
To determine whether ATMs provide satisfaction or not and determine
customers level of satisfaction if they do.
To determine some of the factors that influence ATMs leading to satisfaction
and some of the factors that influence ATMs leading to dissatisfaction.
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1.4 Research Questions
Are customers happy about the ATM and it services?
Does the ATM enhance customer satisfaction? If yes, what is their level of
satisfaction?
What are the factors that influence ATM leading to satisfaction and the
factors that influence ATM leading to dissatisfaction? In other words what are
the positive and negative features of ATM?
What are some of the problems customers faces in using the ATM?
1.5 Justification of the study
As it was stated earlier on in the abstract, ATM and customer satisfaction is a
new way of accessing banking services and customers business needs, thus the
findings of the study will provide information which will help in analyzing the current
the ATM situations.
The findings of this research is also going to help the banks marketing
department as they need to have idea in order to come out with the appropriate
marketing strategy. Not forgetting the ATM section/department, the findings will help
them to identify their positive and negative features of ATM and the customers
recommendations on how to improve the negative features. With these the bank
management can take actions on the basis of customer recommendations to improve
the services.
Studies have also revealed a close link between ATM services and customer
satisfaction. These studies shows that delivering high quality services is linked to
profitability, cost savings, and increased market share (Lovelock, 1994). Thus, as
every banking institution aims at maximising profit, it is important for them (the
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bank) to have an idea about what the ATM users are thinking about the various
features of the ATM, what their problem areas are, their recommendations and how
they compare the ATM service of their bank with that of any other bank in order to
come out with quality services. Therefore the findings of this research will be very
useful.
1.6 Limitations of the Study
In undertaking the study, a number of problems were faced. Thus the under listed
points are some of the factors that limited this research.
Lack of enough funds to cover every aspect of the research.
Getting books for the literature review was also a problem.
There was not enough available time in completing this research.
Convincing people to help fill the questionnaire was another problem.
1.7 Organisation of chapters
For easy understanding of every aspect of this research, the researcher decided to
divide this research into four chapters. Chapter one comprised of the Introduction,
Statement of Research Problem, Research Objectives, Research Questions, Why the
Topic is of Importance, limitations of this research and the organisation of chapters.
Chapter two talked about the Literature Review and the Empirical Evidence. Chapter
three also talked about the Research Methodology, Data Collection Techniques and
Ethical Considerations. The last chapter which is chapter four talked about data
presentation, Analysis of discussion, Summary of Findings and Recommendations,
References and Appendixes.
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CHAPTER 2
LITERATURE REVIEW
This chapter seeks to analyze relevant research documentation and findings essential
to improve this research and its capacity to analyze the concerns it seeks to
accomplish. Different organizations have framed different definitions. Several
researches have been carried out on banking regarding their corporate social
responsibility globally and it is important to examine them in relation to this research
topic. This will enhance effectiveness and stimulate an all inclusive analysis and
discussions of critical issue in relation to the topic under consideration.
The content of this Chapter comprise the Theoretical Framework and the Empirical
Evidence.
2.1 Theoretical framework
During the last few centuries paper replaced metal as a major form of money.
Today paper is being replaced by digital patterns stored in computer media. Most of
the major financial transactions take place inside computers and most money is stored
on computer disks and tapes instead of in wallets and safe deposit boxes (Beekman,
1999). Money like other digital information can be transmitted through computer
networks. Thats why its possible to withdraw cash from your checking accounts
using ATM at bank, airport, or shopping mall which can be thousands of miles away
from your home bank
Evolution of ATM
There has been a great deal of debate over the history of ATM, including who the
ATMs inventor is. According toInvention & Technology Magazine (2000) in the late
1930s, Luther George Simjian started building an earlier and not-so-successful
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version of an ATM. Starting in 1939, Simjian registered 20 patents related to the
device and persuaded what is now Citicorp to give it a trial. But the patent was
unsuccessful because after six months, the bank reported that there was little demand.
Afterwards New Yorks First National City Bank (now CitiBank) installed a
Bankograph (ATM predecessor) in several branch lobbies in 1960. The idea was for
customers to pay utility bills and receipts without having to see a teller. A Barclays
Bank branch near London took the pride in installing first cash dispenser made by De
La Rue Instruments in 1967. It was using paper vouchers from tellers. The machine
was called the De La Rue Automated Cash System, or DACS. This instance of the
invention was credited to John Shepherd-Barron, although George Simjian registered
patents in New York, USA in the 1930s and Don Wetzel and two other engineers
from Docutel registered a patent on June 4, 1973. Afterwards Barclays and a few
other banks introduced a machine that encodes cash on plastic cards purchased from a
teller in 1968. The problem was that the machine always eats the cards, and customers
have to buy new cards if they wanted to make more transactions. First use of ATM
magstripe cards started in 1969. Docutel installed its Docuteller machine at New
Yorks Chemical Bank. The installation marks the first use of magnetically encoded
plastic. Other manufacturers got into the game, but Docutel was the first to apply for a
patent. Docutel was later credited by Smithsonians National Museum for American
History as being the ATMs inventor. Doland C. Wetzel was given the credit for
developing the Docutel machine. Docutel introduced its Total Teller, the first true
fully functioning bank ATM in 1971. After 1971, proliferation began to make the
product more customer-oriented. By 1973, 2000 ATMs- mostly from Docutel were
operating in the United States. They were sold for about $30000 each. Gradually with
the popularity of ATM services this sector has developed dramatically.
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(www.atmmarketplace.com and
(http://investors.about.com/library/investors/blatm.htm 2004 April). The same website
shows that, by 1999, ATMs were in all the continents of the world including
developed and developing countries. The largest number of ATMs was in Asia
Pacific, followed by Europe and North America while South America, had fewer
units. In the case of Africa at that time, they were limited in almost all countries
although they are now availabl.
In recent times, automatic dispensers are the tools used in service delivery. It started
in the 20th century where vending machines were used to buy postage stamps. Since
then other goods such as photocopying cards, photographs, business cards and money
are now dispensed using machines as well. Cash is dispensed by the machine called
Automated Teller Machine (ATM). ATM is a product of Information and Computer
Technology. The technology customises service offerings, reduces waiting time for
customers, serves as an alternative channel for service delivery and provides vital
information needed by customers in the shortest possible time (Lovelock, 1996). They
handle normal cash routine enquiries such as cash withdrawal, transfer, statement
request, account activity enquiry and others (Cox, 1992).
In developed countries and some developing countries, the ATM network permits
customers to collect cash from different banks as well as countries, especially where
ATMs and credit cards link with visa and Master Card holders.In order to operate ATM successfully, a bank needs computer hardware and
software, internet service provider, adequate bandwidth, quality ICT employees,
reliable electric power supply and ATM machines. It is placed at a point where it can
be viewed widely and very convenient.
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The service industry
Services can be defined as intangible experiences that cannot be tested in advance
for their quality, reliability or performance and thus they are riskier purchases than
goods (Gronroos, 1990). The risk involved can be financial, physical, performance,
and time loss as well as quality aspects. These are some of the characteristics that can
differentiate services from goods.
a. Intangibility
This means services cannot be seen, touched, stored and be displayed.
b. Inseparability
This is where consumers become part of the production process as the consumer is far
away from where a centralised mass production takes place. For services both the
service provider and the consumer must be present as production is going on.
c. Perish ability
Goods can be stored but services cannot be stored because they are produced and
consumed immediately.
d. Heterogeneity: service standards are unpredictable. Sometimes it arises from
employees differences in skills and moods which make it very difficult to
control and maintain standards and quality. (Zeithaml, and colleagues, 1995)
and Lovelock (1989).
All these characteristic features make it very clear that services are riskier purchases
than goods. The supposed risk may include financial, physical, performance, time loss
and other quality aspects.
In any service industry, a critical decision for a firm is the determination of the
appropriate level of service quality. When customers are not satisfied with a service,
they are not only likely to terminate the service but also to relate their unfavourable
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service experience to others resulting in decreased current and potential sales
(Keaveney 1995, Richins 1983). To retain existing customers and acquire new
customers, firms invest huge resources to improve service quality. However, pursuing
the highest level of service quality often costs too much and managers meet a lot of
challenges when it comes to providing quality services for their customers. This is so
because services are intangible and it requires serious thinking in order to provide
quality and reliable services expected by the company and customers. Anderson,
Fornell and Rust (1997) have shown that the relationship between customers
satisfaction which is a measure of service quality and a firms profitability tends to be
negative in service industries. For managers, it is therefore essential to understand the
effects of improving the level of service quality on current and potential customer
relationships.
Quality is an attributable that is defined as a degree of goodness or worthiness
or excellence. It is an attribute with a special characteristics or distinguishing feature
(Oxford Dictionary). Since it is an attribute, it can be explained using variety of
variables. Gronroos (1990) suggests that perceived Service Quality is a result of an
evaluation process in which customers compare expected perceptions of service
delivery and its outcomes with what they expected. Zeithaml, Berry, and
Parasuraman, (1985) identified some of the criteria used by customers to evaluate
service quality:
Reliability: involves consistency, accurate performance and dependability.
Responsiveness: timelines of service, making transactions immediately, giving
prompt service and helpfulness.
Competence: possession of skills and knowledge in the field of that service.
Example, a car mechanic with the requisite knowledge of a particular make of a car
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will do a better job than one who claims to be a mechanic of all the vehicles in the
world.
Access: involves approachability and ease of contact (that is, less waiting time;
convenient hours of operation; convenient location of facilities).
Courtesy: politeness; respect; considerations; and friendliness of contact personnel.
Good communication: credibility, security and understanding customers.
Tangible aspect: this includes the appearance of the physical element.
According to Kotler (1991), quality is also communicated through the price for the
service. A high price usually signals premium and quality products, including
services, to buyers. The packaging, distribution, advertising and promotion of goods
also affect the products quality image. Innovation in packaging services in a form
that attracts customers is called for. Poor quality leads to customer dissatisfaction.
Customer Satisfaction
Recognition of customer satisfaction started in the 1930s and 1940s which called for
organisations to concentrate and integrate their profit through customer satisfaction
According to Porter and Miller, 1985, Satisfaction can be defined as a post-
consumption evaluation that meets or exceeds expectations and Dissatisfaction is the
outcome when expectations have not been met.
Churchil and Suprenant (1999) defined customer satisfaction as a feeling a person
experiences when comparing what was received and what was expected. Oliver
(1980) also said it is the product of the accumulated experience of a customers
purchase and consumption. Kotler and Armstrong also defined customer satisfaction
as the extent to which a products perceived performance matches a buyers
expectations. From the above definitions, it means that Customers enter a market with
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expectations of benefit and performance. Comparing results of the service enjoyed
with the expectation leads may to positive disconfirmation or negative
disconfirmation. A positive disconfirmation is an expression of satisfaction through
repeat purchases, continual usage of a service and telling others about their good
experiences with the product or service. A Negative disconfirmation is an expression
of dissatisfaction through voice complaint, exit and no subsequent demand for the
same service (Fornell, Ryan and Westbrook, 1990). Voice complaint is an active and
constructive response that is vocal and attempts to change practices, including policies
put in place by an organisation and Exit is a destructive response that occurs when
people dissociate themselves from the object of dissatisfaction by switching brands,
reducing consumption or refusing to make further purchases (Fornell, Ryan and
Westbrook, 1990).
When customers expectations are not met, it leads to dissatisfaction and when this
happen customers may complain and /or switch brands and sometimes spread
negative comments by word of mouth about the product or company.
Expectations, actual performance level and confirmation have an independent effect
on customer satisfaction.
Other researchers have challenged the disconfirmation of expectation model
comparing it with the Standard Value Percept Disparity Model which was developed
by Lock (1967) and later on was modified by Reily (1983). This model looks at
individual values which states that customer satisfaction or dissatisfaction is an
emotional response, it argues that it is the attainment of values which customers seek,
rather than conformation to their expectations.
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Why it is important to pay attention to customer satisfaction
Customer satisfaction is increasingly being valued as a key variable in models of
customer behaviour and takes a central place in marketing decisions (Naumann and
Giel, 1995). Due to this, Managers of all organisations must place increased emphasis
on customer satisfaction to enhance customer loyalty for long-term profitability and
success as was put across by Fornell and Colleagues that customer satisfaction has a
strong influence on an organisations profitability. Emphasis must be put on listening
to the voice of the customers and identifying the drivers of overall satisfaction as
was also stated by Kotler and Armstrong that feedback from customers enables firms
to identify their specific needs and efficiently allocate resources to design products
and services that maximise satisfaction. Fornell asserted that when a customer gets
used to a service
i. He/she always uses it, thus enhancing sales volume to increase.
ii. A company easily knows what the customer expects.
iii. A company can vary prices and usually increase them without fear of
losing the customer, and
iv. It leads to higher levels of customer maintenance and positive word of
mouth communication as well as increased revenue and market share.
According to the same author, customer satisfaction and great profitability follow
some pattern and they are:
i. They cause demand to curve upwards, making it steeper.
ii. They reduce marketing costs as regular customers can be profiled and given
offers that they cannot easily ignore.
iii. They increase marketing costs of competitors and
iv. They reduce customer turnover and thus fewer customer need to be replaced.
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2.2 Empirical evidence
A fair number of theoretical and empirical researches on ATM and ATM card have
been undertaken throughout the globe due to the increasing scale of use of ATM cards
and consequent conversion of the economy into a cashless one.
In the twenty-first century, ATM cards have become one of the most popular non cash
instruments in the United States and popularity has been explosively growing around
the world. As Stuart E. Weiner (1999) pointed out:
The total number of ATM transactions has more than doubled over the last ten
years and is estimated to reach near 11 billion again this year. And although
there are signs that ATM volume may be peaking, ATM access continues to
grow. The total number of ATM terminals has tripled over the last ten years.
Robert E. Litan (1999) described the introduction and rapid use of ATM as the most
visible revolutions in banking sector. He also supported his claim by stating:
, ATMs offer consumers the convenience of banking in many more locations
than ever before. Indeed, ATMs far outnumber brick-and-mortar banks, in
large part because they are cheaper to operate than a bank branch. Today,
nearly 200,000, ATMs are found throughout the country, more than the
collective number of branches of banks, thrifts, and credit unions
(approximately 83,000).
The table below presents the estimated number of ATMs in the world which were in
existence during the year 2005.
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Table 1: estimated number of ATMs in some countries in the World.
Country Numbers %
United Kingdom 54,000 3.6
USA 470,000 31.33Canada 35,000 2.33
Africa 190 0.01266
India 11,000 0.733
Uganda 34 0.00226
Others 930,776 62.051
World 1,500,00
0
100%
Sources:www.atmmarket.place; andwww.ugandamission.net
Africa had the lowest number of ATMs as at 2005 and thus per country the number is
very small. The number of ATMs in the world is expected to grow to about 1.7
million by 2009. There are about 800 banks in Africa and most of them use ATM
dispensing machines including Ghana (www.atmmarket.place ).
Maria Gloria Cobas et al.(2001) have generalized some of the driving forces behind
banks decisions to install ATMs in the United States. According to the author:
...in the early 1970s, when rising inflation and interest rates made it more
difficult for consumers to borrow, reduced consumers loyalty to their local
banks. These changes in economic conditions and consumer attitudes stimulated
competition among financial institutions. For banks that could afford the
investment, ATMs represented an attractive strategy through which to
distinguish themselves and achieve a competitive market advantage.....In the
second half of the 1970s, more institutions began to install ATMs to enhance
customer service and as a defensive measure against competition from other
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banks. Cost savings to banks were not a driving factor. Consumers used ATMs
to access their accounts more frequently, so that the overall number of
transactions increased..... In the 1980s, other factors began to influence ATM
installations. Because construction and operation of brick and mortar branches
became increasingly expensive, some banks limited branch expansion or closed
branches. ATMs provided a partial substitute for those lost branches.
Professor Norman Penney claims the development of ATM services occurred for
three reasons. First, financial institutions hoped to improve their competitive
positions by attracting customer accounts and . . . increase their revenues by
increasing loans, creating higher balances, and enhancing their financial services
packages. Second, ATMs were designed to perform many of the same tasks as a
human teller at a lower cost. Finally, Professor Penney notes that some financial
institutions made ATM decisions based on marketing considerations. For example,
before building a new branch, one financial institution in Florida used its ATM to test
whether the location would support a branch office. Financial institutions have also
used ATMs to encourage the direct deposit of payroll (Pidgeon, 2000).
CHAPTER 3
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METHODOLOGY
3.0 Introduction
This chapter describes how the problem of the study was investigated and the
procedures and method used in conducting the research and how the information
gathered were analyzed.
It deals with the Background of the Study area, Population and Sample, Sampling
Techniques, Data Collection Instruments and Method of Data Analyses and
Presentation.
3.1 Background of the Study Area
Sunyani is the regional capital of Brong Ahafo Region and it is located in middle of
the region between latitude 70 55 N and 20 30W and it shares boundaries with the
Wenchi district to the north, Brekum and Dormaa districts to the west, Asutifi district
to the south and Tano district to the east. The Sunyani Township is divided into ten
areas which includes Sunyani Area 1, Area 2, Area 3, Area 4, Estate, Nkwaabeng,
Penkwase, Zongo, New Town and Berlin-Top. Census (2000) has revealed that the
population of Sunyani is 61,992 which represent 34.5 percent of the total population
in the region. Due to the good atmospheric condition in Sunyani agricultural
production has become one of the major occupation of it indigenes.
3.2 Study Type
The research is a descriptive study, which is made up of both qualitative and
quantitative research approaches. The case study is a popular form of qualitative
analysis entailing a detailed investigation of the cases in question in order to generate
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valuable information. The quantitative part gave objective factors that accounted for
banks behavioural patterns.
3.3 Research Design
To obtain the necessary information for the project, the researcher solicited
information from both primary and secondary sources. Primary data were generated
from all the banks chosen as case studies in Sunyani because more banks are
introducing ATMs in service delivery. The primary data sources included
interviewing stake holders and giving out questions to respondents in a well designed
questionnaires within the Sunyani municipality. Administration of questionnaire was
at random (non-probability sampling) to the ATM users at the various ATM booths
but to the Managements of the various banks, it was given to all. This was done in
order to help the researcher to get the general views of the stakeholders on ATM in its
catchments area. The researcher also spent time in interviewing some customers and
some selected officials. This was done in order to help stakeholders get the chance to
elaborate express themselves more on some of the issues presented in the
Questionnaire. The secondary data sources included annual reports and published and
unpublished materials in the form of journal articles, papers and the internet. These
contributed to the understanding of the issues under study and were the basis of
pointing out sources of satisfaction and dissatisfaction through the use of ATM. The
researcher used tables and figures to interpret the data from the findings of the
research.
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3.4 Population
The term population here is used to mean all the items under consideration in a
particular enquiry. A sample is a group of items drawn from that population.
For the purpose of this study, the population defined for this research comprise of all
ATM customers of the various banks in the Sunyani Municipality. Those who
qualified for this research were those who were users of ATMs in all the various
banking institutions in Sunyani.
3.5 Sampling technique and sampling size.
Sampling can be defined as the deliberate choice of a number of people (the sample)
who are to provide you with data from which you will draw conclusions about some
larger group (the population) whom these people represent. First a stratified sampling
technique was used as the population under consideration contains several well
defined groups which are the ATM customers of the various banks in Sunyani. This
method was used because it ensures that a representative cross-section of the strata in
the population is obtained. After that a simple random sampling technique was used to
obtain the sample from the total population (customers). This sampling technique was
also used because with this every member of the population stand an equal chance of
being selected to avoid being partial. Lastly a purposive sampling technique was used
as the views of all the banks that are part of the population were relevant to the study.
A sample size of 66 was used in all, which comprised of the above qualifiers.
60 were chosen from the customers and remaining 6 were the ATM managers of the
various banks.
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3.6 Data collection techniques
Both primary data and secondary data were used for the purpose of the study. One
structured Questionnaire was used to collect primary data for the study as a way of
studying attitudes and behaviours towards the use of ATMs. The questionnaires were
both close and open ended. The survey was conducted personally at the selected ATM
booths by the researcher. Because of this the researcher had the chance to observe
customers behaviour towards the ATM. Also the researcher performed personal
interviews along side with the questionnaires in order to get a reliable piece of
information in connection to the problem understudy. ATM users and Management
views on ATM in general were seek for, concerning it introduction into the banking
institutions, some of the challenges they encounter in receiving and delivering better
ATM services and many others. Secondary data from annual reports, published and
unpublished materials in the form of journal articles, papers and the internet was used.
These also helped in the understanding of the issues understudy.
3.7 Data analysis method
Data cleaning and assessment were carried out to find out if the collected data were of
good quality. All filled-in questionnaires were checked to see if they were correctly
filled in and completed. Expressions repeatedly given by respondents were recorded
coded using the SPSS software. The results that were received were analysed using
statistical tables and figures, which helped the researcher to draw out his conclusions.
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3.8 Ethical considerations
From the beginning of the research, respondents were assured of confidentiality of
any information through the letter of introduction explaining the purpose of the
research, which help the respondents to come out freely and give out what they also
knew about the topic under study in order to provide adequate and effective answers
for the research. Also all those whose ideas were used through published books,
articles and others were acknowledged in order to help avoid plagiarism in this
research.
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CHAPTER 4
PRESENTATION, ANALYSIS OF DATA AND CONCLUSIONS
Introduction
This chapter comprises of how data collected is analysed, summary of findings,
conclusions drawn form the research work and recommendations made based on the
study references and appendixes.
4.1 Presentation and Data Analysis.
Research Findings
Sunyani People and the Use of Banking Services.
Sunyani has 6 banks of which all of them have ATM facilities. The banks have the
potential of serving more than 61992 people, which was the population of Sunyani in
2000. Not all of these people are employed or have regular incomes that may be
banked. The town has about 20% of it whole population who are economically active
people engaged in formal occupations (www.ghanadistricts.com).
Bank users are people employed in the formal sector where the majority work in the
public and private sectors of the economy. This implies that only a small portion of
the Sunyani population has access to banking system.
Concerning Sunyani people and their source of earnings, it was found that there were
different types of economic activities. The economic activities include the following:
i. Agriculture: this is where there is farming, livestock keeping, forestry, and
hunting
i. Manufacturing and handcraft;
ii. Construction and real estate;
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iii. Wholesale, retail trade, restaurants including hotels;
iv. Transport and communications;
v. Finance, insurance, and business services;
vi. Public administration, education, health, police and military;
vii. Electricity, water supply and sewerage services; and
viii. Other general services
All the economic activities listed above operate at large, medium, small or micro
enterprises. The small and micro businesses are largely informal.
ATM users and Gender Perspective in Sunyani
The study showed that both men (61.67) and women (38.33) used ATMs. This pattern
is a reflection of gender relations in Sunyani where a large number of males work in
formal employment while there are few females. This also explains males higher
access to education than females and recruitment policies based on academic
qualifications which provide more opportunities for males than females. Therefore, it
is no accident to find a low number of females using the services of ATM.
Table 2: Customers Age Profile and Use of ATMs in Sunyani.
Age in years Number of people Percentage %
18-25 21 35
26-40 29 48.3341-40 6 10
51-60 4 6.67
60+ 0 0
Total 60 100%
Source:survey data
Table 2 shows that almost all customers within the working ages use ATM service.
Customers start using banking service at the age of 18 onwards. The Ghanaian
education system is the reason for this. Primary education starts at 6 years, followed
by 3 years at Junior High, 3 years at Senior High school and four years in tertiary.
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Students enter into the tertiary institutions at the age of 18. These students who have
to a long distance to school are been encouraged to open bank accounts to prevent
them from going back to the house anytime they need money since the money can be
channelled to them through their bank accounts. Also those who apply for the
Students Loan are been instructed to open bank accounts in recent years so as to
channel their allowances. Those captured in the study were the university students, the
Polytechnic students and the nursing students. Upon getting a qualification, a person
may find a job at the age of 25 years or more. At the initial stage of employment a
person may prefer direct payment as he/she will be trying to settle down. This is the
reason for the high number of customers (48.33%) between 26-40 years.
Table 3:ATM users and Duration with a Bank
years Number of customers Percentage %
Less than 1 year 3 5.0
1-10 46 76.7
11-20 7 11.7
21-30 2 3.3
31-402 3.3
41+ 0 0.00
Total 60 100
Source:survey data
Majority of bank customers (76.7 %) who were interviewed had used bank services
for a period of 1-10 years. Very few people (6.6 %) had used bank services for more
than 20years. The remaining (11.7%) have used bank service for a period of 11-20
years. The few customers who had used banking services for more than 20 years are
those who have been in work for a very long time and have higher salaries and can
afford to use chequebooks in place of ATMs. Such customers may use cheques to
settle their transactions where accepted. Table 3 above shows that more than 50% of
those interviewed had been using bank services for 6 and over 30 years. This means
that expressions given by those customers are based on long term experience or
exposure to banking services.
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Table 4: customers views on ATMs
Number %
Happy 52 86.7
Not happy 8 13.3
Total 60 100
Source: survey data
Table 5:features of the ATM that makes customers like it
Source:survey data
Table 4 reveals that majority (86.7%)
of the respondents are happy about ATM and it services and thought that it was the
right decision to introduce it into the banking system. Their reasons are presented in
Table 5. This table shows that customers are happy about ATM services because of
three main reasons although there are others. They include it service delivery
duration, it flexibility and the machine accuracy. Some few customers (13.3%) were
not happy about the ATM and their reasons were expressed in Table 6
Table 6:some of the negative features of the ATM customers dont like.
Attribute Yes NoNumber % Number %
Card locking 60 100 0 0
Delay in card delivery 33 55 27 45
Machine complexity 22 36.7 38 63.3
Machine breakdown 60 100 0 0
Unsuitable location 60 100 0 0
Unsecured 37 61.7 23 38.3
ATM charges 60 100 0 0
Withdrawal limitations 60 100 0 0
Unreliable network 60 100 0 0
Not trust worthy 47 78.3 13 21.7
Poor money quality 60 100 0 0
Poor service after working hours 60 100 0 0
Source:survey data
Number %
Service delivery duration 52 100flexibility 52 100
Machine accuracy 52 100
It is able to perform exactly the
normal cash routines
52100
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Table 6 present to us some of the negative features of the ATM and some of the
problems customers encounter when using the ATM in Sunyani. They include ATM
charges, poor money quality, unreliable network, unsuitable location, card locking,
machine breakdown and poor service after working hours. These were the main
problems that all the respondents (100 %) agree it exist.
Table 7: customers feelings about ATMs services
Number %
Satisfied 38 63.3
Not satisfied 14 23.3Neutral 8 13.3
Total 60 100
Source:survey data
Table8:factors that influence ATM leading to satisfaction in customers.
Number %
Fast services 38 100
Machine accuracy 38 100
Easy to operate 38 100
Source:survey data
Table 7 shows that majority (63.3%) of customers in Sunyani are satisfied with ATM
services and a number of them (23.3%) are not. Some few people (13.3%) were also
not certain about being satisfied or not. Customers were satisfied due to three main
reasons which includes the fast services ATM provides, it accuracy and because they
are easy to operate. Also the percentage of customers not satisfied and some not
certain about being satisfied was explained by the negative aspects expressed by
customers, which was presented in Table 6.
Table 9: customers level of satisfaction with ATM services
Number %
Satisfied 35 92.1
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Very satisfied 3 7.9
Total 38 100
Source:survey data
The table above indicates that majority (92.1) of the customers level of satisfaction is
1 representing satisfied". Only (7.9%) of the customers who were satisfied with
ATM and it services were very satisfied which was denoted by 2.
4.2 Discussion of results
The first three positive responses from Table 5 confirm the attributes that are
expected to be met by ATMs as pointed out in the literature review and is in
agreement with Sullivan who views that service adds value to a sector which in this
study means that ATMs add value to banks. The study revealed that Customers are
happy about ATM services because of the issues discussed below.
Service Delivery Duration
The study revealed that ATMs saves time. This can be seen in Table 5 above which
shows clearly that all the respondents who were engaged in this research agrees that
time saving is one of the positive features of the ATM. The ATM saves time since
customers did not have to queue for a long time to withdraw cash compared with a
bank that operates manually. This finding relates perfectly with Cox (1992) argument
that, proper use of technology such as ATM saves waiting and queuing time
compared with using traditional banking services, where long delays were
experienced when there are large numbers of customers in the bank.
Flexibility
Also respondents were happy about the introduction of ATM and it services because
it offer flexibility. Customers can get money at any time; a flexibility that was not
provided for a long time by the Sunyani banking institutions. The presence of flexible
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service in terms of time enables customers to draw out cash 24 hours a day, 7 days a
week and 365 days in a year. In terms of location, customers can withdraw money at
any place where such bank has it ATM services, with the same charges, unlike the
case of traditional banking service. This can be pointed out in Robert E. Litan (1999)
statement in the empirical evidence where he described the introduction and rapid use
of ATM as the most visible revolutions in banking sector. He supported his claim by
stating: , ATMs offer customers the convenience of banking in many more
locations than ever before. Also it flexibility enables customers to withdraw cash after
working hours and during public holidays which did not exist some years back.
ATMs Performs the normal cash routine enquiries.
The normal cash routine enquiries which were also revealed by Cox in the literature
review are discussed below.
Cash Withdrawal
From the ATM booth any ATM card holder can withdraw any amount of money in a
day from his or her account.
Transfer
Any amount up to account balance can be transferred between accounts under the
same issuing bank within 24 hour period.
Statement Request
The customer can send request to the bank by the ATM, when he/she requires his/her
detail Account statements. The statement generally shows a ledger balance and an
available balance, is the same format as a teller terminal balance request.
Account Activity Enquiry
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The ATM users can have information regarding the account balance of his/her
account each and every time the ATM transaction is occurred. ATM has an option to
provide a mini statement showing the last transactions of a customer.
Cheque Book Request
The customer can send request to the bank by the ATM for new cheque book, when
his/her current cheque book is finished.
Enquiry
Customer can enquire about anything, like any service, product, facilities through
ATMs are able to perform these functions in a more convenient manner without
customers passing through any long process. This result has proved Coxs statement
in the literature review.
These issues discussed above implies that so far ATMs are accepted because of the
problems experienced when banking operations were carried out manually in
Sunyani.
ATM and Customer Satisfaction
ATMs enhance customer satisfaction through it service delivery, which was clearly
presented in Table 8 above where we have majority (63.3 %) of the respondent saying
ATMs enhance satisfaction. Customers feeling of satisfaction can be linked to the fact
that the machines produce accurate results and enhance fast services.
Machine accuracy
Customers have realised that the machines are accurate in counts compared with
experiences of shorts from manually delivered services where the possibility of
employees making mistakes is very high.
Fast services
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Also customers have realised that the ATM provides fast services which reduces the
time one has to spend before withdrawing cash as compared to the manual system
where customers were being served by a group of bank employees, which included a
person who collects the cash book or cheque from the counter and gives them to a
clerk who checked the customers accuracy in filling out a form or writing a cheque, a
verifier who check whether the customer had an adequate cash balance, an accountant
who endorsed the payment to the customer, a clerk who read out the name again and
guided the customer to the counter where teller paid out the money to the customer.
The process took a minimum of forty five minutes during less busy days.
Easy to operate
Customers have revealed that the machines are easy to operate although one needs to
read and understand the English language before he/she can operate it. Customers
saying that the ATM is easy to operate were reflected in Table 6 where only a few
people (36.7 %) said the machine is complex.
Although ATMs enhance satisfaction, the study revealed that sometimes customers
encounter some problems which limit their level of satisfaction. This sometimes leads
to dissatisfaction. From Table 7, it can be seen that (23.3 %) of the customers were
against the fact that ATM services enhance satisfaction and (13.3 %) were not certain.
This was explained by the negative aspects of the ATM expressed by customers and
presented in Table 6. Even in assessing the satisfaction level of those who said ATM
services enhance satisfaction, it was realised that only a few customers (7.9 %)
representing 3 out of the 38 customers were very satisfied. This shows that there are
certain factors that limit customers level of satisfaction which in some cases leads to
dissatisfaction and these factors are linked to some of the problems or negative
features of the ATM. Some of these features are discussed below.
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Machine breakdown:
All the ATM users that were engaged in this research believe that machine breakdown
is one of the main problems of ATM. Machine breakdown generally occurs for the
following reasons:
Poor quality notes: If the notes supplied in the ATMs are of poor quality, the chance
of machine breakdown increases. Because the sensor that picks the notes from the
cassette cant operate smoothly.
High frequency of use: As the number of ATMs is less than that required in the
Sunyani municipality, the frequency of use of ATM is very high. As ATM is a
machine, the probability of going out of order rises with the high frequency of use of
machine.
ATM charges:
Once again, all the customers that took part in this research were also not happy about
the fees charged for the use of ATM and in their own reasons see it to be unnecessary
cost, given that their money was being used to do business by the banks.
The table below shows the different fees charged by the various banks in Sunyani.
Inter- bank charges are higher than those presented in the table.
Table 10: different fees charged by the various banks in Sunyani
Name of the Bank Amount in Gh
Ghana Commercial Bank 0.25pBARCLAYS Bank 0.20p
ECOBANK 0.20p
National Investment Bank
Social Security Bank
Agricultural Development Bank
Source:survey data
Unreliability of the Network:
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Customers are also not happy about the way ATM networks are not stable. At times,
internet services were slow due to bandwidth limitations when Internet Service
Providers failed to get connections locally as well as with international satellites.
Unsecured:
Some customers (61.7 %) believe that the security system of various banks ATM is
not sufficient. By the term unsecured the customers meant that there exists security
problem for them outside the ATM booths. It has found that from outside, any person
can see what the customers are doing when passing by.Machine complexity:
Some ATM users also believe that the ATM machines are complex that is they are not
easy to use. Customers generally put this argument when their cards are retained by
the ATM machine. Cards may be retained for many reasons but ultimately the blame
goes to the machine. Another reason can be that people in Sunyani still get frightened
while using any type of machine that deals with money.
Delay in card delivery:
Some respondents (55 %) believe that the ATM centers are not efficient in making
quick delivery of cards. Delay in card delivery generally occurs because the Banks
who has their branches in Sunyani does not any ATM card embossing machine in
Sunyani. So when a customer makes a request for an ATM card, it has to be sent to
their head quarters mainly in Accra. So it takes time before customers get hold of their
ATM card.Poor Currency Quality:
All the customers believe that poor currency quality is a great problem of ATMs in
Sunyani. This high level indicates that the notes supplied at various ATMs are not of
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good quality. As a result, the customers receive poor quality notes such as old notes,
torn notes etc.
Withdrawal limitations
Customers were not happy about the policy related to the maximum amount that can
be of cash withdrawn from ATMs. The study realised that at present, GCB offers a
maximum of single withdrawal of GH 80.00, NIB allows, BARCLAYS and
ECOBANK allows Gh 200, ADB.. and SSB.. This increased the time taken by
a customer who had to repeat the process so as to get the desired amount of cash.
Poor service after working hours
Further more some customers also complained about poor services after working
hours and during weekends. One of the main problems customers face during these
times is the ATM running out of cash.
The research also revealed that some customers feared to use ATMs because they did
not want to expose their ignorance to the public especially those who were given
ATM cards for the first time. This concern came from a customer who had to ask for
help in operating the ATM. According to him although brochures are attached to the
card when given, it only guides them on how to operate the ATM while the actual
operation was done by the customer him/her self. It was also realised that there is no
consideration being given to people with disabilities such as blindness and people in
wheel chairs. This negates the role of serving customers as these people cannot get
access easily.
All these issues raised by different ATM users in Table 7 reduce the value of services
delivered by ATMs and thus produced dissatisfaction in customers. This reinforced
the perception of ATM services as being better than the manual system.
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4.3 Summary and conclusions
The study is about ATM and Customer Satisfaction: A case study of the banking
institutions in Sunyani.
The research showed that
i. Customers are happy about the introduction of ATM into the banking
system due to two main reasons. These include the flexibility ATM
provides, it service delivery duration and because ATMs performs the
normal cash routine enquiries.
ii. ATM services enhance satisfaction due to the accuracy of the machine and
the fast services it provides as compared to the manual banking system
which existed before the introduction of the ATM and because they are
easy to operate.
iii. Although ATM services enhance satisfaction the level of this satisfaction
is reduced by technological and processing failures which sometimes lead
to dissatisfaction. Some of these problems include card locking, machine
breakdown, unreliable network and others.
Therefore the study concludes that because ATM addresses some of the problems
that customers were facing during the period where banking operations were manual
such as time wasting and making of mistakes, customers are happy about it
introduction into the banking system. ATMs enhance satisfaction, but in a situation
where the system fails, with periodic long queues, customer dissatisfaction mounts.
Further studies can be undertaken in this area. For instance, Quality Function
Deployment (QFD) technique may be used to find ways to improve customer
satisfaction of ATM service. QFD concentrates on maximizing customer satisfaction
(positive quality) by seeking out both spoken and unspoken needs, translating these
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into actions and designs, and communicating these throughout the organization end-
to- end. Further QFD allows customers to prioritize their requirements, benchmark
against competitors, and then direct to optimize those aspects of product, process, and
organization that will bring the greatest competitive advantage
(www.qfdi.org).
4.4 Recommendations:
For Management:
Banks must pay attention to the short comings of ATMs, as supported by Sullivan
(1993) who urged that the routine activities must be developed to monitor and
evaluate services from time to time. Fornell and Werner emphasized customer loyalty
to a service when satisfied and said it increased profitability if well maintained by an
organisation Banks should conduct frequent studies in order to help them know some
of the causes of service dissatisfaction. This is because ATMs can only communicate
with customers through their displays on the screens and can never capture the
feelings, experiences, happiness or frustrations that customers go through. Due to this,
banks have to design a different mechanism to capture this information and this can
only be done by conducting frequent studies. Some of the issues discussed below can
be looked at.
At present, the number of ATM location are not sufficient to meet the needs of
growing number of ATM users thus new ATM location is a crying need. They should
not only be confined to bank buildings, but should also be placed in shopping areas,
retail stores, large hospitals and institutions that have large numbers of people,
example in all the tertiary institutions in Sunyani, police and military barracks and so
forth, to enhance the flexibility of banking services. ATM users have suggested the
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need for new ATM locations. So the top management should consider the growing
demand of new ATM locations.
Better quality currency is another important recommendation that the banking
institutions must take into consideration. Customers of ATM think that the currency
quality should be improved. It can be done by supplying new notes to the ATM. The
banks should make sufficient arrangement so that they can receive better quality notes
from the Bank of Ghana.ATMs should be more users friendly. User friendliness can be improved by
increasing awareness of how ATMs can be used. Another option may be redesigning
the software used in ATMs.
Safety and security measures should be improved inside and outside ATMs.
Nontransparent glasses should be used so that people outside the ATM booth cant
see what is happening inside the ATM and more security measures outside the ATM
booth through requesting the appropriate law-enforcing agencies.
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