Customers’ Perception Of ATM Services

Project and Seminar Material for Business Administration and Management BAM

Customers’ Perception Of ATM Services


This study was embarked upon to examine customers’ perceptions of ATM services in Benin City. The purpose of the study is to ascertain customers’ rating as regards to their level of satisfaction with ATM service quality.

In order to obtain necessary information for this study, both primary and secondary data were used. Primary data were obtained from field survey with the use of questionnaire as an instrument for data collection together with observations.

The data collected from the field work were analyzed using satisfaction index, percentage frequency or rating and descriptive method. Information from the library, internet, newspapers formed the major source of secondary data. The major findings were that customers/users of ATM are to a reasonable extent satisfied with the level of service they received from using the ATM, while in the case of dissatisfaction in the charges and surcharges for using the machine. Based on the findings, it is recommended that banks should pay close attention to their ATM users or customers perception with the service quality they are offered.

Chapter One


1.1 Background of the Study

The most significant development in recent time that has substantially influenced business operations and activities in the banking industry is the introduction of Automated Teller Machine simply referred to as (ATM).
ATM allows a bank customer to conduct his banking transaction from both his bank and other banks. In fact, it is a self service highly computerized cash dispensing machine that allows bank customer to conduct certain bank transaction such as withdrawal ,account balance enquires ,account transfer etc.

As a result of this, ATM has been defined as an automatic bank note dispenser that uses electronic device and computer software/hardware to enable payment at either bank premises or sales off site locations .The concept (ATM) as known today was first introduced in 1936 by LUTHER GEORGE SIMJAIN. A working prototype came about in 1969 and DOCUTEL (an American company) with DON WETZEL, was issued patent for it in 1973.

However, the most similar in function to today’s type was introduced in United Kingdom in 1973. Nigeria joined the developed world in it’s introduction and use in 2005 through the effort of Central Bank of Nigeria (CBN).The introduction of ATM has remarkably enhanced the convenience, speed, and volume of business transactions bringing relief to bank’s customers as well as reducing the difficulties of withdrawing cash in banking hall. Today there are Nigerians from all walks of life using ATM for different services, it no longer reserved for the upper class in the society, now you can see students, traders etc, making use of their debit cards and cash cards on the system (ATM) cash withdrawals, pay utility bills etc. MOBAREK (2007) establish speed of operation and waiting time as important predictors of ATM service quality. Among the many changes in the introduction of money counting machine or automated teller machine (ATM) is to reduce workload and meet customer demand. This has simplified the operation of many banks such as the counting of money by bank tellers and manual recording of cash deposit. MOUTINHO (1992) established that (ATM) facility resulted in speed of transactions and save time of customers.

Despite the tremendous impact ATM has made to banking services, it is still presently been characterized with many problems like; case of stock card in the machine, debiting account without payment, network failure. The question one would ask is whether the banks know how their ATM customer/users feel about these problems as they could be a dissatisfying factor from using the ATM. To provide solution to these problems that may arise. Call for the banks to constantly identify and understand the perception of customer wit ATM services quality in order to provide a convenient manner that enables the customer/users maximize better satisfaction. This research seeks to study consumer perception of ATM service in the banking industry.

1.2 Statement of Research Problem

Banks in Nigeria render various services through the ATM to meet their customers banking need just like other business organization.

However there are some problems associated to the research study.

  1. It is not known whether benefit would be derived by the customer from using the machine, and
  2. It is also known whether the customers are satisfied with the ATM base service.

This research study therefore, seeks to provide answers to the following questions.

  1. What are the benefits accruing to customer from using the machine?
  2. Are customers satisfied with ATM-based service?
  3. Do customers lodge complaint about the ATM service quality and how are the complaints treated?

1.3 Objective of the Study

The objectives of the study are as follows.

  1. To find the benefits accruing to customers from using the machine.
  2. To ascertain the level of satisfaction customers derive from using the machine.
  3. To find out customers complaints about ATM service.
  4. To find out how customer complaints are treated.

1.4 Research Hypotheses

Hypotheses One
  • Ho: Customers are not satisfied with ATM services in Edo state
  • Hi: Customers are satisfied with ATM services in Edo state
Hypotheses Two
  • Ho: ATM complaints are not promptly attended to
  • Hi: ATM complaints are promptly attended to

1.5 Significance of the Study

However, the need for this study arises from its academic and practical benefits. The benefits are in terms of its significance to the banking industry and also to academic world.

In respect to the academic world in Nigeria, this study will help in creating awareness about customer perception of ATM based services and encourage development of relevant literature in this field of banking in the banking world.

This study will help banks in Nigeria realize that customer’s perception about their ATM services, relevant to banking industry as it would help in their activities and improvement. It will also help banks discover marketing strategies that can enhance their competitive edge in their intense competitive environment.

1.6 Scope and Limitation of the Study

The basis for delimiting this study is on the population of interest and also on the sample size. As such the scope of this study covers selected banks in Ugbowo, Benin City, Edo State. The banks include, United Bank for Africa and Access Bank. The researcher encountered some constraints, which limited the scope of the study. These constraints include but are not limited to the following

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

1.7 Definition of Terms


A party that receives or consumes products (goods or services) and has the ability to choose between different products and


The way you think about or understand someone or something


Short for automated teller machine. It is a machine that dispenses cash or performs other banking services when an account holder inserts a bank card.

1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  • Chapter one is concerned with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain a critical analysis of customers’ perception of ATM services.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations are made, which in the opinion of the researcher will be of benefit in addressing the challenges of poor ATM services in Nigerian Banks.

5.2 Summary

This study aimed at having a critical analysis of customers’ perception of ATM services. Three objectives were raised. These objectives include: To find the benefits accruing to customers from using the machine, to ascertain the level of satisfaction customers derive from using the machine, to find out customers complaints about ATM service, to find out how customer complaints are treated.

5.3 Conclusion

Based on the above findings pertaining to the objectives of the study the following conclusions are drawn.
Responsiveness was found to have a positive and significant effect on ATM service quality. The responsiveness aspect of ATM service quality relates to the ability of the bank staff to provide the agreed services timely, accurately, dependably, and promptly. Responsiveness measures the extent to which the banks put in place measures to recover services when ATM services are negatively confirmed, and to response quickly to requests and suggestions and provide assistance to customers in case of problems. The study revealed that staff response to customers’ ATM related needs influence their perception about service quality. With ATMs, response or recovery quality deals with the banks’ ability to handle customer complaints arising as a result of transactional failures as well as compensating customers against losses incurred such as monies illegally withdrawn out of their accounts. A quick response to requests is likely to increase perceived convenience and diminish uncertainty and is important way for the banks to show that they are customer oriented and act benevolently towards customers.

5.4 Recommendation

Banks should capitalize on the spread of communication technology and the theory of innovations (Marshall & Heslop, 1988). Banks should develop strategies to motivate non- users through awareness, education, extending personalized services, and demonstrating the functions of ATMs. It is evident that convenience, efficient operation, security and privacy, reliability and responsiveness are not the only characteristics that influence customers’ satisfaction. The other factors that contribute to customer satisfaction include trust, value, and image of the bank, (Ranaweera & Prabhu, 2003). Bank management should monitor the environment and identify the trends through marketing intelligence. They need to constantly up-date and differentiate their ATM service quality dimensions to ensure continuous satisfaction and retention of customers, and optimize their limited resources. Quick response to customers’ needs and queries about the ATM related services are important to improve the service standards of ATM. This would facilitate customers to participate in improvement of service quality, learn and perform, and havea pleasant experience through twoway communication. Bank should make a commitment to redress the service failures of ATMs. Solomon, Surprenant, Czepiel and Gutman (1985) argued that role players should provide compatibility between expectation and perception during service encounter.

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