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

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

ABSTRACT

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

CHAPTER ONE

INTRODUCTION

1. BACKGROUND OF THE STUDY

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

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

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

1. STATEMENT OF THE PROBLEM

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

1. OBJECTIVES OF THE STUDY

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

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

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

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

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

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

Hi: Automated teller machine has significant effect on customer satisfaction

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

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

1. SCOPE AND LIMITATION OF THE STUDY

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

The researcher encounters some problems which are listed below:

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

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

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

1. SIGNIFICANCE OF THE STUDY

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

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

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

1. HISTORICAL BACKGROUND OF ZENITH BANK PLC.

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

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

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

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

1. DEFINITION OF KEY TERMS

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

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

ANALYSIS ON QUEUING PROBLEMS AT UNITED BANK FOR AFRICA (UBA) ATM SYSTEM IN NASARAWA LOCAL GOVERNMENT AREA, NASARAWA STATE

ANALYSIS ON QUEUING PROBLEMS AT UNITED BANK FOR AFRICA (UBA) ATM SYSTEM IN NASARAWA LOCAL GOVERNMENT AREA, NASARAWA STATE

ABSTRACT

This research work “Analysis on Queuing Problems at United Bank for Africa (UBA) ATM Systemin Nasarawa Local Government Area, Nasarawa State” was carried out to determine the expected time a particular customer is to spend in the bank for transaction. The data for the research was collected using observatory method, and was analyzed using; Multi-Channel queuing model. It was found that 44 customers arrives the bank every 1 hour and the time interval between each arrival is 1 minute; on arrival the customer is expected to spend 54 minutes in line waiting for service and use 4 minutes to receive service, in total, the customer is to spend 58 minutes in the bank to complete his/her transaction. To address the problem of waiting time,the management should make provision for banking facilities and bank administrators to address gaps in human resources, logistics and other internal procedures aimed at reducing waiting times and thus ensuring an effective banking delivery system which often lead to increase performance.The management should adopt a five ATM model to reduce waiting time at the ATMS during peak periods in other to increase customer satisfaction. The efficiency of the present ATMs should also be increased.

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Time is a major determinant of individual or organizational success and/or failure. An effective usage of time will most likely lead to success, while time abuse or mismanagement will inevitably lead to delay in service, loss of income and consequently, business failure. Man has evolved into a time conscious being, bearing in mind that he has limited period to accomplished goals that are incremental in nature. In this modern era our daily life is encompassed by routines such as driving the kids to school, keeping the garden, shopping, fixing of furniture, banking, cooking and regular exercise, which demand effective usage of time. An attempt to over stay or spend much time in one of such activities will lead to a delay or failure to accomplish the other. Inherently, customers have developed the sense of getting results and replies on demand, such that they can move to the next scheduled activity without delay.

Unavoidably, all the sectors; agriculture, media, transport, oil and gas and mining among others in the country, depend directly or indirectly on the banking sector. For instance, an agriculturist who wants to import fertilizer from India will have to use the bank for financial transaction. If there is delay in the transaction, the delivery of fertilizer may also be delayed.

Customers arrive banking halls and ATMs in a random pattern, which frequently requires joining a queue, when the arrival rate is more than the service rate, they will have to wait till it is their turn for service; although, there are exceptions where high priority customers are attended to, irrespective of their time of arrival. Queuing is pleasant or endurable when the waiting time is small, but when queues become crowded and stagnant; agitation, discomfort and quarrels, even robbery, often breakout.

According to Cowling and Newman (1995), service quality has been widely used to evaluate the performance of banking services. Nowadays, with the development of information technology, customers increasingly expect higher services. At the same time, most of them are becoming more time conscious and wanting more convenience. In a country where customers queue in filling stations, restaurants, saloons, bus stops and banks, they are always on the look for a better alternative where they can spend less time to get the service they desire. However, queuing becomes an unavoidable bottleneck, when customers are faced with service alternatives that are synonymous with choosing between the deep blue sea and the devil.A queuing process consists of customers arriving at service facilities, then waiting in a line (queue) if all servers are busy, eventually receiving service, and finally departing from the facility. Thus, a queuing system is a set of customers, a set of servers, and an order whereby customers arrive and are served.

A common slogan in the U.S Army is “Hurry up and wait”. In many occasions in life, we had had to queue up, because of congestion i.e. the demand of customers on a particular facility is beyond what it could cope with. Many practical applications of queuing problems are encountered in Traffic flow, scheduling and facility design, employee allocation  and telephone.

The common experience in Nigeria is that most banks do not have the facilities and capacities to service the number of customers without much delay on the part of the customers. The problem in this regard had been that though bank customers for instance, have always been desirous of spending the least possible time in banking transactions, this age-long desire is yet to be met by the banks. Banks on the other hand, want to attract, retain customers and at the same time optimize profit. Profit making in banks is a function of management ability to provide efficient services to customers at little or no time wastage (Agbadudu, 1995).

To curb the menace and epidemic of queuing that has plagued its banking system, in the recent past, the Central Bank of Nigeria (CBN) had initiated and implemented initiatives and policies varying from the liquidation of banks to the cashless policy which includes e-banking, mobile banking and the use of automated teller machines (ATMs). Punch Newspaper (2012) reported that 60,000 Nigerians depend on   one ATM, whereas the ideal number is 15,000 people to one ATM.

In Nasarawa local government area of Nasarawa state, the situation is not different. Its population which includes; farmers, teachers and lecturers, traders, business men and women, and a large proportion of polytechnic students also face the menace of poor service delivery at ATMs as a result of queuing. At UBA Plc. customers are seen sweating profusely from heat and long hours of standing in the queue to use the ATM. Poor network, insufficient and inefficient ATMs are some of the perceived causes of these queues. Furthermore, the queues in UBA Plc. can also be attributed to unavailability of banks to meet the demand of the increasingly Nasarawa population. The problem of queuing in the banking system of Nasarawa, has however not been clearly understand.

1.2     STATEMENT OF THE PROBLEM

The obvious cost implications of customers waiting, ranges from idle time spent when queue builds up, which results in man-hour loss, to loss of goodwill, which may occur when customers are dissatisfied with a system. However, a number of customers go to bank hoping to complete a transaction within a particular period of time and return to some other activity but eventually spend unimaginable long time waiting to be served; however, what is the expected time a particular customer is to spend in the bank? The focus of this research work therefore is to carry out an analysis of queuing problems with interest to answer the above question using UBA ATM services in Nasarawa LGA.

1.3     AIM AND OBJECTIVES

1.3.1  AIM

The aim of this research project is to examine queuing problems at United Bank for Africa (UBA) ATM system in Nasarawa, Nasarawa state.

1.3.2  OBJECTIVES

The specific objectives of this research work are to estimate:

1. Traffic intensity.
2. The possibility that a customer will have to wait for service.
3. The mean time a customer is to spend in the ATM system.

1.4     SIGNIFICANCE OF THE STUDY

At the end of this research work, the researcher intends that it provides valuable information on queuing system and customer satisfaction to banks, bank customers, financial policy makers and the society at large; thereby prompting actions toward a better customer service experience.

• This research can help bank ATM to increase its QoS (Quality of Service), by anticipating, if there are many customers in the queue.
• The result of this paper work may become the reference to analyse the current system and improve the next system.
• Banks can now estimate the number of customers waiting in the queue and the number of customers going away each day.

1.5     DELIMITATION OF THE STUDY

The scope of this study is limited to only one commercial bank in Nasarawa local government area; United Bank for Africa (UBA) plc. Makama road, Nasarawa, Nasarawa state.

1.6     LIMITATION OF THE STUDY

Some of the challenges faced at the cause of this work are;

• The research was conducted within limited time
• Unavailability of finance
• Gathering of data through observation was time consuming and labour intensive.
• There is a room for systematic bias on the part of the researcher as he collects the data.

1.7     DEFINITION OF TERMS

Queue: a collection of items in which only the earliest added item may be accessed. It is line feeding a number of servers.

Server:  an operation fed by a queue

Utilization: a measure of how busy the system is.

ATM: Automated Teller Machine

KPMG:Klynveld Peat Marwick Goerdeler