MAKERERE UNIVERSITY FACULTY OF ECONOMICS€¦ · Kyohairwe Luba, Nabakiibi Maria, Namande Mable, Nabbisere Betty and Namuyomba Jackie, whose encouraging words kept me hopeful. May

1

MAKERERE UNIVERSITY

FACULTY OF ECONOMICS

BY

KYAMPEIRE DAMALIE ANNET

207006203

07/U/4965/EXT

AUTOMATED TELLER MACHINES AND CUSTOMER SATISFACTION :

CASE STUDY OF STANBIC BANK MBALE BRANCH

SUPERVISOR: DR. MUYINDA PAUL BIREVU

ARESEARCH REPORT SUBMITTED IN PARTIAL FULFILMENT FOR THE

AWARD OF THE DEGREE OF BACHELORS OF COMMERCE OF

MAKERERE UNIVERSITY

OCTAMBER, 2011

i

DECLARATION

I Kyampeire Damalie Annet, declare that this report is my original work and has never been

presented and/or submitted for any other degree to any university or institution before.

It has been compiled under the guidance of my supervisor as part of the requirement for the

award of a degree of Bachelor of commerce of Makerere University.

Signature: ……………………………… Date: ……………………………….

ii

APPROVAL

This is to certify that Kyampeire Damalie Annet has been carrying out research entitled

“Automated Teller Machines and Customer Satisfaction”, using Stanbic Bank Mbale as a case

study under my supervision. The research report is now ready for submission with my approval.

SIGNED: ……………………………… DATE: …………………………………….

SUPERVISOR: DR. MUYINDA PAUL BIREVU.

iii

DEDICATION

I dedicate this piece of work to my Mother Miss. Busingye Alice, my Son Emmanuel Adriel

Ayebare, and all my Sisters and brothers (Emily, Grace, Sam, Ian, Junior). Thanks for all the

support you rendered to me I really appreciate.

iv

ACKNOWLEDGEMENT

This study was a success due to the assistance of my gratefully acknowledged Supervisor , Dr.

Muyinda Paul Birevu, I appreciate his constructive critisms and advice throughout the study.

I sincerely extend my thanks to the staff and customers of Stanbic Bank Mbale Branch who

unsparingly committed their time to provide the necessary data for this Study.

Great thanks go to my mother Busingye Alice and my sisters and brothers who have been

supportive both emotionally and financially.

Finally I extend great thanks to my good friends, Amutuhaire Molline, Kyohairwe Eunice,

Kyohairwe Luba, Nabakiibi Maria, Namande Mable, Nabbisere Betty and Namuyomba Jackie,

whose encouraging words kept me hopeful. May the good Lord reward you all.

Last but not least, I thank the Almighty God who has kept me alive and made it possible

throughout this study.

v

TABLE OF CONTENTS

DECLARATION ..................................................................................................................................... i

APPROVAL ........................................................................................................................................... ii

DEDICATION ....................................................................................................................................... iii

ACKNOWLEDGEMENT ...................................................................................................................... iv

TABLE OF CONTENTS......................................................................................................................... v

ABBREVIATIONS ................................................................................................................................ ix

ABSTRACT ............................................................................................................................................ x

CHAPTER ONE ................................................................................................................................... 1

1.0 INTRODUCTION ............................................................................................................................. 1

1.1 Background of the study .................................................................................................................... 1

1.2 Statement of the problem ................................................................................................................... 3

1.3 Purpose of the study........................................................................................................................... 3

1.4 objectives of the study ....................................................................................................................... 3

1.5 Research questions ............................................................................................................................ 3

1.6. Scope of the study............................................................................................................................. 3

1.6.1 Geographical scope ......................................................................................................................... 3

1.6.2 Time Scope ..................................................................................................................................... 3

1.6.3 Variable scope ................................................................................................................................ 3

1.7 Significance of the study .................................................................................................................... 4

CHARPTER TWO .................................................................................................................................. 5

2.0 LITERATURE REVIEW .................................................................................................................. 5

2.1 Introduction ....................................................................................................................................... 5

2.2 Automated Teller Machines ............................................................................................................... 5

2.3 Customer Satisfaction ........................................................................................................................ 6

2.4 Automated Teller machines and Customer Satisfaction ...................................................................... 7

CHARPTER THREE .............................................................................................................................. 9

3.0 METHODOLOGY ............................................................................................................................ 9

vi

3.1 Introduction ....................................................................................................................................... 9

3.2 Study Design ..................................................................................................................................... 9

3.3 Study Population ............................................................................................................................... 9

3.4 Sample Size and Selection method ..................................................................................................... 9

3.6 Data Collection Methods /Tools ....................................................................................................... 10

3.7 Data Management ............................................................................................................................ 10

3.7.1 Data Processing ............................................................................................................................ 10

3.7.2 Data Analysis. .............................................................................................................................. 10

3.9 Limitations of the study ................................................................................................................... 10

CHAPTER FOUR ................................................................................................................................. 12

4.0DATA PRESENTATION, INTERPRETATION AND DISCUSSION OF THE FINDINGS ............. 12

4.1 INTRODUCTION ........................................................................................................................... 12

4.2 BACKGROUND INFORMATION ABOUT THE RESPONDENTS ............................................... 12

4.2.1 Respondents according to gender .................................................................................................. 12

4.2.2 Age of the respondents .................................................................................................................. 12

4.2.3 Level of education ........................................................................................................................ 13

4.2.5 Category of the respondents. ........................................................................................................ 14

4.2.6 Occupation of the respondents. ..................................................................................................... 14

4.3 AUTOMATED TELLER MACHINES............................................................................................ 15

4.3.1 Introduction of ATMs and improved banking services. ................................................................. 15

4.3.2. ATM application and safety of customer‟s savings. ...................................................................... 16

4.3.3 Complictability of ATMs. ............................................................................................................. 17

4.3.4 Easy access to ATM machines and increased customer base. ......................................................... 18

4.3.5 Time spent in banking house compared to before the introduction of ATMs. ................................. 19

4.3.6 ATM usage and reduced transaction costs. .................................................................................... 20

4.3.7 Confidentiality with ATMs use. .................................................................................................... 21

4.3.8 ATMs and the level of savings. ..................................................................................................... 22

4.4 CUSTOMER SATISFACTION ....................................................................................................... 23

4.4.1 Outstanding indicator of customer satisfaction .............................................................................. 23

4.4.2 Impact of ATMs on the bank services ........................................................................................... 24

4.4.3 Sources of information about ATMs. ............................................................................................ 25

vii

4.4.4 Description of Stanbic bank ATM machines ................................................................................. 26

4.4.5 Guidelines on ATMs ..................................................................................................................... 27

CHAPTER FIVE ................................................................................................................................... 29

5.0 SUMMARY, RECOMMENDATIONS AND CONCLUSION......................................................... 29

5.1 Introduction ..................................................................................................................................... 29

5.2 Summary ......................................................................................................................................... 29

5.3 Conclusions ..................................................................................................................................... 30

5.4 Recommendations ........................................................................................................................... 30

5.5 Areas for Further Study ................................................................................................................... 30

REFERENCES...................................................................................................................................... 31

APPENDIX 1- QUESTIONNAIRE ....................................................................................................... 32

APPENDIX II-INTERVIEW GUIDE .................................................................................................... 37

viii

LIST OF TABLES

Table 1: Customer satisfaction in terms of complaints and ATM offline times. ........................................ 2

Table 2 : Sample of Categories and Respondents .................................................................................... 9

Table 3 : Shows respondents according to gender ................................................................................ 12

Table 4 Shows Age of the respondent ................................................................................................... 13

Table 5 : Shows level of education of respondents ............................................................................... 13

Table 6 : Shows responses of the category of the respondents. ............................................................. 14

Table 7 : Shows responses on the occupation of the respondents. .......................................................... 15

Table 8 : Shows responses on introduction of ATMs and improved banking services. ............................ 16

Table 9 : Shows responses on the ATM application and safety of customer‟s savings. ........................... 17

Table 10 : Shows responses on the complictability of ATMs. ................................................................ 18

Table 11 : Shows responses on easy access to ATM machines and increased customer base. ................. 19

Table 12 : Shows responses on the time spent in banking house compared to before the introduction of

ATMs. ................................................................................................................................................... 20

Table 13 : Shows responses on the ATM usage and reduced transaction costs. ...................................... 21

Table 14 : Shows responses on whether departmental budgets are reviewed and reconciled to ensure that

they address the same objectives. ........................................................................................................... 22

Table 15 : Shows presence on whether ATMs have increased the level of savings. ................................ 23

Table 16 : Shows responses on the outstanding indicator of customer satisfaction ................................. 24

Table 17 : Shows responses on the impact of ATMs on the bank services ............................................. 25

Table 18 : Shows responses on the sources of information about ATMs. ............................................... 26

Table 19 : Responses on the description of Stanbic bank ATM machines. ............................................. 27

Table 20 : Shows responses on the existence of guidelines on ATMs .................................................... 27

ix

ABBREVIATIONS

ATM - Automated Teller Machines

x

ABSTRACT

This study was carried out in Stanbic Bank Mbale Branch with a purpose of finding out the

effects of ATM application on Customer satisfaction levels in Stanbic bank.

A number of banks today have adopted installation of ATMs as a tool of gaining competitive

advantage over their competitors due to the numerous advantages associated with ATMs and

their impact on customer satisfaction. and that is why the researcher came out with the statement

of the problem being “To find out the impact of ATMs on the banking industry ”.

The researcher used different methods of data collection and this was questionnaire for collecting

primary data and library reading method for secondary data. In data presentation and analysis,

the researcher employed tables to summarize the findings and the results were organized under

the headings of the main questions which were used by the researcher in the process of obtaining

data and percentages were used to show the impact of ATMs to customer satisfaction.

Findings revealed that there is a strong positive relationship between ATMs and customer

satisfaction in that they have made banking easy, attracted more customers to Stanbic Bank and

increased their satisfaction as well as the challenges that lower the benefits that accrue from the

machines and how this can be improved.

The recommendations included the following; Stanbic bank should install more ATMs and have

people stationed at those ATMs to train users on how to use the machines in order to reduce the

queues as well as cab on the fraudsters who are taking advantage of the irriterate customers.

The bank staffs should always endeavor to caution customers about the fraudsters who are ever

waiting to take advantage of the unsuspecting customers. These measures will enhance customer

satisfaction and facilitate credit policy.

1

CHAPTER ONE

1.0 INTRODUCTION

Automated teller machines are computerized telecommunications devices which provide the

customers of financial institutions with access to financial transactions in public spaces without

the need of bank tellers or clerks. They are located outside the bank buildings for easy access

even after banking hours (Mulira, 2002).

This chapter will focus on the background, statement of the problem, objectives of the study,

research questions, purpose of the study, significance of the study and scope of the study.

1.1 Background of the study

On most ATMs, customers are identified by inserting plastic ATM cards with magnetic strips or

plastic smartcards with chips, that contain unique card numbers and some security information,

such as expirely dates. Security is provided by customers entering personal identification

numbers called PINS, (Susan, 1999). ATM machines allow customers to conduct their banking

transactions from almost any location in the world. Most ATMs are connected to interbank

networks, enabling people to withdraw and deposit money from machines not belonging to the

banks where they have their accounts, (Peterson, 2002)

ATMs also known as auto banks or cash dispensers were introduced in the country in 1998 by

Standard chartered bank followed by Barclays and later the other banks too bought the idea.

This form of banking was seen as a convenient and supplement mode of banking due to its

considerable cost advantage over the traditional banking practices.

Ever since Uganda commercial bank was bought by Stanbic bank, the latter has grown into a

giant bank in the country, with over eighty five branches country wide. ATMs were invented as a

way of enhancing service convenience to the bank customers. Auto banking technology is meant

to improve the quality of service and performance of the bank as a whole.

Customer satisfaction is a measure of how products and services supplied by a company meet

and surpass customer expectations. This is seen as a key performance indicator within business.

2

In a competitive market place where companies compete for customers, customer satisfaction is

been seen as a key differentiator and increasingly has become a key element of business strategy,

(Kearney, 2008).

Organizations are increasingly interested in retaining existing customers while targeting non

customers, measuring customer satisfaction provides an indication of how successful the

organization is in providing products and or services to the marketplace. Customer satisfaction is

an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will

vary from person to person, (Micheal 2001). The state of satisfaction depends on a number of

both psychological & physical variables that correlate with satisfaction behaviors. Organizations

that do not install effective ATM systems are likely to experience customer dissatisfaction. For

example Stanbic Bank installed ATMs in an effort to boost customer satisfaction through

improved service delivered as the machines were expected to drastically reduce on the long

queues which were common in the banking halls and increase customers easy to access their

funds. Initially this worked out and many customers who were reluctant to open up accounts

opened. However, Stanbic customers have always complained about ATM break down and the

operational costs, as evidenced by the many complaints through the complaints book, (Stanbic

bank, 2008) as indicated in the table below.

Table 1: Customer satisfaction in terms of complaints and ATM offline times.

Years 2000 20 03 2005 2008 2010

Customer

Queries

200 179 278 303 100

Atm

breakdown/100%

(uptime)

93 90 68 52 30

Source: Stanbic Bank Customer care records 2010

As shown in the table above, such consistent customer complaints could be attributed to

ineffective automated teller machines.

3

1.2 Statement of the problem

Despite the efficiency, convenience and all the other benefits accruing from ATMs usage,

customers have continuously complained about banks‟ service, & the cost of transacting on

ATMs thus overriding their efficiency and effectiveness. This could lead to dissatisfaction

amongst customers.

1.3 Purpose of the study

This study aims at establishing the impact of ATMs usage and customer satisfaction in Stanbic

Bank.

1.4 Objectives of the study

a) To establish how secure customers savings are with the use of ATMs.

b) To establish the effect of ATMs on the number of bank customers

c) To establish the ease of using ATMs.

1.5 Research questions

The study was be guided by the following questions.

a) How secure are customers savings with the use of ATMs?

b) How has the introduction of ATMs affected the number of Bank customers?

a) How easy is it for customers to use ATMs?

1.6. Scope of the study

1.6.1 Geographical scope

This study was conducted at Stanbic Bank Mbale Branch.

1.6.2 Time Scope

This study focused on data from 1999 to 2009.

1.6.3 Variable scope

This study covered the ATM as an independent variable & customer comments, number of

customers, & number of ATM transactions as dependent variables.

4

1.7 Significance of the study

The study is of much help to Stanbic Bank in understanding to what level are their customers

satisfied with the ATMs services.

The study is helping bank management to research more and improve on ATMs service in order

to meet customer expectations.

The study helping future researchers to carry out extensive studies related to ATMs.

5

CHARPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction This chapter looked at what previous researchers have observed about the topic under study.

2.2 Automated Teller Machines

An automated teller machine (ATM) is a computerized telecommunications device that provides

customers of financial institutions with access to financial transactions in a public space without

the need for a human clerk or bank teller. On most modern teller machines, the customer is

identified by inserting a plastic ATM card with a magnetic stripe or a plastic smartcard with a

chip that contains a unique card number & some security information, such as an expiration date.

Security is provided by the customer entering a personal identification number (pin number),

(Brain, 2002).

Using an ATM, customers access their bank accounts in order to make cash withdrawals, check

account balances, and get min statements as well as purchasing mobile cell phone prepaid credit

(Peterson, 2001).

Although ATMs were originally developed as just cash dispensers, they have evolved to include

many other bank-related functions. In some countries, especially those which benefit from a fully

integrated cross-bank ATM network, ATMs include many functions which are not directly

related to the management of one‟s bank account, such as deposit currency recognition,

acceptance, and paying routine bills, fees, and taxes., purchasing goods from shopping malls,

advertising and promotional features, donating to charities, cheque processing module and

adding pre-paid cell phone credit (Peterson, 2000).

To aid reliability, same ATMs print each transaction to a roll paper journal that is stored inside

the ATMs, which allows both the users of ATMs and the related financial institutions to settle

things based on the records in the journal in case there is a dispute. In some cases, transactions

are posted to an electronic journal to remove the cost of Supplying journal paper to the ATM and

for more convenient searching of data (standard Bank, 2007).

6

Encryption of personal information, required by law in many jurisdictions, is used to prevent

fraud. Sensitive data in ATM transactions are usually encrypted with DES, but transaction

processors now usually require the use of triple DES. Remote key loading techniques may be

used to ensure the secrecy of the initialization of the encryption keys in the ATM. Massage

authentication code (MAC) or partial MAC may also be used to ensure messages have not been

tampered with while in transit between the ATM and the financial network (Hiller, 2002).

2.3 Customer Satisfaction

The word customer refers to a person or organization that buys something from a shop, store or

business. For the case of a Bank, the customers are all those people or organizations who are

account holders with it, who carry out transactions and utilize bank service, part of which is the

ATM.

Customer satisfaction is defined as the level of person‟s felt state resulting from comparing the

product perceived performance in relation to person„s expectations (kotler,1999). In the book

“expanding your concept of service by Dummies, 2nd

edition” customer service delivery is taken

to include fulfilling the multitude of less obvious customer needs.

Customer satisfaction is a measure of how products and services supplied by a company meet or

surpass customer expectations. In a competitive marketplace where businesses compete for

customers, customer satisfaction is seen as key differentiator, and increasingly has become a key

element of business strategy. According to Aeker, (2002), there is a substantial body of empirical

literature that establishes the benefits of customer satisfaction for firms.

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the

state of satisfaction will vary from person to person and service to service. The state of

satisfaction depends on a number of both psychological and physical variables which correlate

with satisfaction behaviors such as return and recommend rate. Kotler, (1999) suggested that

the level of satisfaction can also vary depending on other options the customer may have and

other products against which the customer can compare the organization‟s products.

As suggested by Rust and Oliver, (1999) is that customer satisfaction or dissatisfaction emerges

as a response to a single or prolonged set of services encountered. The principle objective of

customer satisfaction program is to increase retention rate. According to Kotler, (1999), smart

7

marketers try to build up long term trusting “win win” relationship with customers, distributor,

dealers and suppliers. Delivering the promised quality of goods and services accompanied with

fair prices to the other party overtime accomplishes this.

Because satisfaction is basically a psychological state, care should be taken in the effort of

quantitative measurement, although a large quantity of research in this area has recently been

developed. The usual measures of customer satisfaction involve a survey with a set of statements

using a likert technique or scale. The customer is asked to evaluate each statement and in terms

of their perception and expectation of performance of the organization measured (Zairi, 2000).

Learning how to quantify problem prevention and problem solving may be the critical factor that

determines the success or failure of a business. Unfortunately, many managers still think of

satisfying customers as a nice thing to do rather than a critical component of success. To

maximize profits and productivity, you must recognize five things (Hoya, 2001).

2.4 Automated Teller machines and Customer Satisfaction

To be successful, organizations must look into the needs of their customers. That is why many

researchers and stakeholders have continuously emphasized the importance of working ATMs

that are reliable, mechanically sound and conveniently located to suit customer satisfaction,

loyalty and retention (standard Bank Workbook, 2001).

ATM machines are a part of every one‟s life. They ease the customer‟s day by being in a variety

of places, especially the drive up ATMs. Automated teller machines have a variety of options

from the software, security for the user and the bank, bank usage, cash dispensers, alternative

uses besides dispensers and deposits, and fees. ATM machines need to be reliable for the

customer to feel at ease with using them (Zeldin, 1999).

Customer satisfaction is important because many researchers have shown that customer

satisfaction has a positive effect on an organization‟s profitability due to this the consequences of

customer satisfaction and dissatisfaction must be considered when installing automated teller

machines since on the part of the bank, the cost component (40,000 USD) of installation must

take into account the value addition in terms of efficient, effective and value added features

(Stanbic Guide, 2009)

8

ATM reliability is important not only to the bank, but to their customers. A customer wants to be

able to withdraw money wherever they are. The customer wants to be assured that the ATM will

always have money. Customers usually are running quickly through their errands and wish the

ATM to be as quick as or quicker than anything else. Now if a machine is down, it is usually due

to restocking cash or auditing, instead of software or hardware issues (Brian, 2003).

ATM reliability allows the banks to have few tellers on their line. The fewer the tellers, the more

money a bank saves on salaries. It is also important when dealing with cash transactions. Any

bank will want the machine to dispense the correct amount of money with the least amount of

problems. Rather than giving the customer too little or too much cash for their transactions

(Stanbic, 2008).

There is also a positive connection between customer satisfaction, loyalty and retention in regard

to channels of migration like the ATM machines which are always available (online), have more

features like airtime, utility payment bills, etc conveniently placed, easy to use, and localized

(drive in and snack dispensing). Therefore, customer satisfaction, loyalty and retention in

relation to the ATMs are all very important if Stanbic bank is to retain and grow the big customer

base it boasts of (Mbathi, 2008).

9

CHARPTER THREE

3.0 METHODOLOGY

3.1 Introduction

This chapter discussed the research methods and the instruments that were used by the researcher

while conducting the study. It provided a description of the research design, the sample

description, data collection and analysis procedure that the researcher followed.

3.2 Study Design

The research was based on a cross sectional research design given the nature of customers that

were interviewed. This was combined with descriptive and analytical research designs. The

research was both qualitative and quantitative in nature.

3.3 Study Population

The population of this study constituted staff members and customers of Stanbic Bank mbale

branch as well as administrators in Stanbic Bank Mbale branch.

3.4 Sample Size and Selection method

The sample size was 40 respondents comprising of 30 bank customers and 10 stanbic bank staffs.

A purposive sampling design was used while selecting the respondents from the bank officials

and customers because the researcher had to identify the respondents with full knowledge about

ATM operations and customer satisfaction.

Table 2 : Sample of Categories and Respondents

Category Population Respondents Percentage of

respondent

Management 10 10 25

Clients 40 30 75

Total 50 40 100

10

3.5 Data Sources

The main sources of data were primary and secondary. Primary data was obtained by

administering questionnaires and interviews to the respondents. And secondary data was

collected from documents like books, dissertations, journals, newspapers, textbooks, non

published documents from the bank, articles and reports on the internet.

3.6 Data Collection Methods /Tools

The study used structured instruments in collecting data. Self administered Questionnaires were

designed to collect data from respondents, and these were prepared by the researcher to reduce

non-response. Interviews were also carried out with some respondents to increase the response

rate.

3.7 Data Management

3.7.1 Data Processing

Data collected was edited, coded, organized in tables and analyzed.

3.7.2 Data Analysis.

The relationship between the dependent and independent variable was tested using correlation

statistics. Microsoft Excel used to generate summery tables, diagrams and descriptive statistics.

SPSS samples were also used to analyse the data collected.

3.9 Limitations of the study

Employees and customers of Stanbic Bank have a right to participate or not to participate in the

research. The researcher thus will face a task to convince them to take part in the research so as

to gather data needed. The researcher will also have to assure respondents that the research will

only be for academic purposes and that the recommendations will be used to improve customer

services and operations of the bank.

The researcher will have to interview respondents such as customer consultants who are often

busy and thus may not meet them on first visit. The researcher will have to schedule

appointments with the respondents so as to avoid bouncing.

11

Time constraints will be perceived to be a challenge along the research, as the researcher will

have to make field visits, at the same time pursue other academic endeavors as well as work.

Time budgeting will be used to solve this problem.

The study will involve some costs like typing, printing and binding costs

12

CHAPTER FOUR

4.0 DATA PRESENTATION, INTERPRETATION AND DISCUSSION OF THE

FINDINGS

4.1 INTRODUCTION

This chapter gives analysis of the findings and interpretation of automated teller machines,

customer satisfaction and the relationship between the variables. The data are analyzed in

relation to the research question and objectives shown in chapter one. The findings are presented

using tables and analyzed by use of frequencies, and percentages.

4.2 BACKGROUND INFORMATION ABOUT THE RESPONDENTS

4.2.1 Respondents according to gender

Responses from different sexes were obtained to avoid unbiased gender information. This is

shown in table 4

Table 3 : Shows respondents according to gender

Sex Frequency Percentage (%) Cumulative

frequency

Male 21 52.5 52.5

Female 19 47.5 100

Total 40 100

Source: primary data.

From the table above it‟s indicated that 52.5% of the respondents were males and 47.5% were

females which indicate that all sexes were involved in the study to avoid bias.

4.2.2 Age of the respondents

Findings on the on the age of the respondents were captured to reveal whether respondents had

sound minds and responses were noted and presented in table 5.

13

Table 4 Shows Age of the respondent

Level of education Frequency Percentage (%) Cumulative

frequency

Bellow 25 10 25 25

25-35 years 20 50 75

35-45 years 8 20 95

45 years and above 2 5 100

Total 40 100


From the table above, 25% of the respondents were bellow 25 years, 50% were between 25 and

45 years, 20% were between 45 and 60years and 5% were above 60 years of age. This indicates

that the respondents had sound minds and had independent ideas and therefore the responses

gathered were reliable and dependable.

4.2.3 Level of education

Findings on the level of education were captured to reveal whether respondents could be able to

interpret the questionnaires given to them by the researcher and responses were noted and

presented in table 4.

Table 5 : Shows level of education of respondents

Level of education Frequency Percentage (%) Cumulative

frequency

Degree(s) 20 50 50

Diploma 14 35 85

Certificate 2 5 90

Others 4 10 100

Total 40 100


14

From the table above, 50% of the respondents were degree holders, 35% diploma holders, 5%

certificate holders and 10% had education bellow secondary level. This means that the

respondents had the capacity to interpret the questionnaires given to them and were able to give

relevant answers.

4.1.5 Category of the respondents.

Findings on the on the marital status of the respondents were captured to reveal whether

respondents were stable on the work they were doing and responses were noted and presented in

table 5.

Table 6 : Shows responses of the category of the respondents.

Category Frequency Percentage (%) Cumulative

frequency

Bank staff 15 37.5 37.5

Customer 25 62.5 100

Total 40 100


From the table above, 37.5% of the respondents were staff members, while 62.5% were bank

customer. This implies that the respondents chosen had relevant and viable answers to the

research.

4.2.6 Occupation of the respondents.

Responses on the occupation the respondents were captured to find out their experience about

ATMs and results are captured in table 5.

15

Table 7 : Shows responses on the occupation of the respondents.

Period Frequency Percentage (%) Cumulative

frequency

Civil servant 18 45 45

Private entrepreneur 12 30 75

Peasant 4 10 85

Others 6 15 100

Total 40 100


From the table above, 45% of the respondents were civil servants, 30% were private

entrepreneurs, 10% were peasants and 10% were on other jobs. This shows that despite the fact

many of the respondents were workers and business people, they had good experience about the

ATM services.

4.3 AUTOMATED TELLER MACHINES

In an attempt to ascertain how Automated teller machines operate, relevant questions were asked

and responses noted

4.3.1 Introduction of ATMs and improved banking services.

Findings on whether the introduction of ATMs in the banking industry has improved banking

services are indicated bellow in table 6.

16

Table 8 : Shows responses on introduction of ATMs and improved banking services.

Responses Frequency Percentage (%) Cumulative

frequency

Strongly agree 15 37.5 37.5

Agree 14 35 72.5

Not sure 2 5 77.5

Disagree 4 10 87.5

Strongly disagree 5 12.5 100

Total 40 100


From the table above, 37.5% of the respondents strongly agreed that the introduction of ATMs in

the banking industry has improved banking services, 35% agreed, 5% were not sure, 10%

disagreed while 12.5% strongly disagreed. This therefore indicates that the bank services have

improved with new innovations of ATMs as it‟s evidenced by 72.5% of the respondents

agreeing. This has therefore impacts positively on the customer satisfaction and the performance

of the bank.

4.3.2. ATM application and safety of customer’s savings.

Findings on whether the application of ATMs makes customers savings more secure are

indicated bellow in table 7.

17

Table 9 : Shows responses on the ATM application and safety of customer’s savings.


frequency

Strongly agree 8 20 20

Agree 1 2.5 22.5

Not sure 5 12.5 35

Disagree 12 30 65

Strongly disagree 14 35 100

Total 40 100


From the table above, 20% of the respondents strongly agreed that the application of ATMs

makes customers savings more secure, 2.5% agreed, 12.5% were not sure, 30% disagreed while

35% strongly disagreed. This therefore indicates that there is a general problem with ATMs as

regards safety. Further research revealed that insecurity has been manifested its self in password

forging by IT experts, this has reduced the chance by the customers to exploit fully the

advantages of advanced bank technologies and this has not only compromised customer

satisfaction, but also on the customer turn over.

4.3.3 Complictability of ATMs.

Findings on whether the ATM machines are complicated and not user friendly are indicated

bellow in table 8.

18

Table 10 : Shows responses on the complictability of ATMs.


frequency


Agree 10 25 55

Not sure 5 12.5 67.5

Disagree 7 17.5 85


Total 40 100


From the table above, 30% of the respondents strongly agreed that the ATM machines are

complicated and not user friendly 25% agreed, 12.5% were not sure, 17.5% disagreed while 15%

strongly disagreed. This therefore shows that the ATM machines of the bank are perceived to be

very complicated especially to people with little knowledge about the recent technologies, yet

available research in chapter two reveals that customer satisfaction is much determined by the

simplicity and accuracy of the machines.

4.3.4 Easy access to ATM machines and increased customer base.

In an attempt to find out whether the number of customers in the banking industry has improve

due to easy access of ATMs and results is indicated below in table 9.

19

Table 11 : Shows responses on easy access to ATM machines and increased customer base.


frequency


Agree 11 27.5 40

Not sure 1 2.5 42.5

Disagree 10 25 67.5

Strongly disagree 13 32.5 100

Total 40 100


From the table above, 12.5% of the respondents strongly agreed that the number of customers in

the banking industry has improve due to easy access of ATMs, 27.5% agreed, 2.5% were not

sure, 25% disagreed while 32.5% strongly disagreed. This therefore shows that the introduction

of ATMs has not increased on the customer base. But further research revealed that there is less

relationship between the ATMs and the number of customers but this however remains a

question of research.

4.3.5 Time spent in banking house compared to before the introduction of ATMs.

Findings on whether it‟s quick and easy to complete a transaction using the bank‟s ATMs are

indicated bellow in table 10.

20

Table 12 : Shows responses on the time spent in banking house compared to before the

introduction of ATMs.


frequency


Agree 10 25 65

Not sure 0 0 65

Disagree 8 20 85


Total 40 100


From the table above, 40% of the respondents strongly agreed that it‟s quick and easy to

complete a transaction using the bank‟s ATMs, 25% agreed, none of the respondents were not

sure, 20% disagreed while 15% strongly disagreed. This therefore indicates that speedy and

accuracy of transactions has greatly increased compared to prior periods. This has impacted

positively on the customer satisfaction by the bank.

4.3.6 ATM usage and reduced transaction costs.

Findings on whether the costs of banking in terms of time and money lowers with ATM usage

are indicated bellow in table 11.

21

Table 13 : Shows responses on the ATM usage and reduced transaction costs.


frequency

Strongly agree 12 24

Agree 8 16

Not sure 3 6

Disagree 10 24

Strongly disagree 7 30

Total 40 100


From the table above, 24% of the respondents strongly agreed that the costs of banking in terms

of time and money lowers with ATM usage, 16% agreed, 6% were not sure, 24% disagreed

while 30% strongly disagreed. This therefore indicates that the transaction and time costs reduce

while using ATMs. Further research however revealed that the amount to be deposited and

withdrawn is limited to ascertain amount which may later compensate the costs when using the

counter services.

4.3.7 Confidentiality with ATMs use.

Findings on whether the customers of the bank use the ATMs with confidence and responses are

indicated bellow in table 15

22

Table 14 : Shows responses on whether departmental budgets are reviewed and reconciled

to ensure that they address the same objectives.


frequency


Agree 13

32.5 45

Not sure 3 7.5 52.5

Disagree 9 22.5 75


Total 40 100


From the table above, 12.5% of the respondents strongly agreed that the customers of the bank

use the ATMs with confidence, 32.5% agreed, 7.5% were not sure, 22.5% disagreed while 25%

strongly disagreed. This implies averagely the bank clients have confidence in the use of ATMs

which has directly impacted positively on the level of customer satisfaction.

4.3.8 ATMs and the level of savings.

In an attempt to find out on whether ATMs have enhanced the saving culture among customers

in Stanbic bank and results is indicated bellow in table 16.

23

Table 15 : Shows presence on whether ATMs have increased the level of savings.


frequency


Agree 6 15 20

Not sure 5 12.5 32.5

Disagree 15 37.5 70


Total 25 100


From the table above, 5% of the respondents strongly agreed that ATMs have enhanced the

saving culture among customers in Stanbic bank, 15% agreed, 12.5% were not sure, 37.5%

disagreed while 30% strongly disagreed. This shows that there is little relationship between

ATMs and the level of savings. But further research revealed that, convenient withdrawal on one

side entice customers to save especially those in the business world.

4.4 CUSTOMER SATISFACTION

4.4.1 Outstanding indicator of customer satisfaction

The findings to ascertain the indicators of customer satisfaction revealed as shown in the table 12

24

Table 16 : Shows responses on the outstanding indicator of customer satisfaction


frequency

Efficient ATM

transactions

9 22.5 22.5

Reduced queues 10 25 47.5

Number of ATM

transactions

10 25 72.5

Reduced ATM queries 11 27.5 100

Total 40 100


The above table shows that 22.5% of the respondents indicated that customer satisfaction is

shown in terms of efficient ATM transactions, 25% by reduced queues, 25% by number of ATM

transactions, while 27.5% by reduced ATM queries. This therefore implies that customer

satisfaction is embraced in terms of reduced ATM queries and reduced queues in the bank.

Therefore if the banks are to improve customer satisfaction much must be addressed to improve

them.

4.4.2 Impact of ATMs on the bank services

The findings were pursued to ascertain the impact of ATMs on the bank services and results

were obtained as shown in the table 13.

25

Table 17 : Shows responses on the impact of ATMs on the bank services


frequency

Very good 12 30 30

Good 15 37.5 67.5

Fair 9 22.5 90

Poor 4 10 100

Total 40 100


The table above shows that 30% of the respondents perceived the effect to be very good, 37.5%

perceived it to be good, 22.5% fair, and 10% perceived the effect to be poor. This therefore

means that the introduction of ATMs has not only improved on the bank services but also on the

efficiency of the bank services.

4.4.3 Sources of information about ATMs.

The findings on the sources of information about Stanbic ATMs and the results are shown in

table 14.

26

Table 18 : Shows responses on the sources of information about ATMs.

Source Frequency Percentage (%) Cumulative

frequency

Media 12 30 30

Brochures 4 10 40

Bank staff 1 2.5 42.5

A friend 23 57.5 100

Total 50 100


The above table shows that 30% of the respondents got the information about Stanbic ATMs on

the media, 10% from brochures, 2.5% from bank staff, and 57.5% from friends. This therefore

indicates that friends and the media have played a great role on teaching the public about the

existence and the use of ATMs. Therefore if the bank is to improve on the use of ATM cards

then the media is the solution.

4.3.4 Description of Stanbic bank ATM machines

Findings were carried out to ascertain whether the tax administration procedures determine the

actual taxes paid and results are indicated in table 15.

27

Table 19 : Responses on the description of Stanbic bank ATM machines.


frequency

Hard to use 4 10 10

Easy to use 16 40 50

Customer friendly 12 30 80

Others 8 20 100

Total 50 100


From the table above, 10% of the respondents revealed that ATM machines were hard to use,

40% to them were easy to use, 30% were customer friendly, and 20% were not sure. This means

that, Stanbic bank‟s ATM machines are easy to use and customer friendly. Respondents who

disagreed it was found out that these were people with less books and the bank has done little to

sensitize them on the use of the machines.

4.4.5 Guidelines on ATMs

Findings on whether the bank‟s clients are given guidelines on how to use ATMs in case of a

need and results are shown in table 16.

Table 20 : Shows responses on the existence of guidelines on ATMs


frequency

Yes 24 60 60

No 16 40 100

Total 40 100


28

From the table above, 60% strongly agreed that bank‟s clients are given guidelines on how to use

ATMs in case of a need, and 40% disagreed. This means that the bank on several occasions

provide advice and guidelines to customers on issues to do with ATMs which can improve

customer satisfaction.

29

CHAPTER FIVE

5.0 SUMMARY, RECOMMENDATIONS AND CONCLUSION

5.1 Introduction

This chapter provides the summary, recommendations and conclusion from the study. These

conclusions and recommendations are derived from the findings of the study, which are

presented in chapter four of this report. An attempt was made to compare the findings with the

normative literature prescriptions as well as the results of a few previous studies made

particularly by other authors and researchers.

5.2 Summary

Findings on how secure customers savings are with the use of ATMs.

The findings reveal that the biggest percentages of the respondents disagree with the ATM

application and safety of customer savings. This therefore indicates that there is a general

problem with ATMs as regards safety.

Findings on how the Introduction of ATMs has affected a number of BANK Customers.

Findings reveal that most respondents perceive the effect to be good; indicating that the

introduction of ATMs has not only improved on the bank services but also on the efficiency of

the bank services.

Findings on how easy it is for customers to use ATMs.

Findings reveal that there are various sources on how one can obtain information about the use of

ATMs. And it is shown that most respondents acquire information from friends. This therefore

indicates that friends have played a great role on teaching the public about the existence and the

use of ATMs.

30

5.3 Conclusions

The conclusions of this study are presented in reflection to the objectives of the study.

ATMs ease banking since it is quick and easy to complete a transaction using the bank‟s ATMs.

Therefore, those who enter the banking halls benefit from the services of the bank.

The biggest challenge with ATM machines is that it is difficult to use. The sophistication of the

machines make it not to be user friendly which limits the benefits of using the machine and thus

leaving the customers dissatisfied.

The use of ATMs has been seen that most customers acquire information from most customers to

use ATMs machines.

5.4 Recommendations

Stanbic Bank should be able to develop educational programmes to users of ATMs on how to

operate them for the various services that they offer, the maximum that one can access from the

machine.

Stanbic Bank should also assure customers about the security of depositing through the machines

by clearly highlighting the process which the deposits are handled until credited into the savers

account.

Bank staffs should be assigned the duty of overseeing the ATM facility and responding to

customer‟s inquiries about the machine. This will go along way on reducing fraud in the

machines and tampering of the machine will be eliminated.

5.5 Areas for Further Study

Bank charges and customer satisfaction in Financial Institutions.

Customer data verification systems and security of customer savings.

An evaluation of the modern information technology systems and security of customer

savings in financial institutions.

31

REFERENCES

Aeker,K.(2002). The concept of customer satisfaction and management, London Publishers.

Brian, (2002). Information technology advancement and Uganda‟s banking sector

Brian M, (2003). Marshal Brians more How staff works. ATM application among developing

countries.

Kotler.P, ( 1999). Marketing Management; prentice Hall. (6th edition).

Mbathi, (2008). Costs benefits analysis of ATM installations in Uganda

Michael, (2001). The use of information technology in banking, University of Manchester.

Mulira,H.M.(2002). Information and communication technology; its role in achanging

environment, The Ugandan banker, Journal of the institute of bankers, Vol.No.3, December,2002

page 30-33.

Peterson , (2001). New technologies and customer responses, Ray publishers; india

Standard bank, (2004). Bank operations and customer service; Kampala Uganda.

Susan, (1999).customer service management in financial institutions, 3rd

Edition Prentice Hall,

London.

Zairi, (2000). Information systems and competition among financial institutions in East Africa;

Gashiru Publishers; Nairobi Kenya.

APPENDECIES

32

APPENDIX 1- QUESTIONNAIRE

Dear respondent,

The researcher is a student of Makerere University conducting research as a partial requirement

for the award of bachelor of commerce focusing on Automated Teller Machines and Customer

satisfaction. Kindly spare some time and fill in this questionnaire.

The findings will be purely for academic purposes and any information given will be kept

confidential.

1.Gender

Male

Female

2. Age (years)

18-25 26-30 31-35 36-45 Above 45

3. Education background

a) Primary level

b) Secondary level

c) University level

d) Post graduate level

4. Category of respondent

33

Bank Staff

Customer

5. What is your occupation?

a) civil servant

b) Private entrepreneur

c) Peasant

d) Others

6. In the table below, how would you respond to the following statement level of

agreement?

Statement Strongly

agree

Agree Neutral Disagree Strongly

Disagree

The

introduction

of ATMs in

the banking

industry has

improved

banking

services

With the

ATM

application,

Customers‟

savings are

more secure.

ATM

34

machines are

complicated

and not user

friendly.

The number

of customers

in the banking

industry has

improved due

to easy of

ATM access.

I now spend

less time in

the banking

hall than

before the

introduction

of ATMs.

The costs of

banking in

terms of time

and money

lowers with

the ATM

usage.

I use the

ATM with

confidence

ATMs have

enhanced the

saving culture

35

among

customers in

stanbic bank.

We are

satisfied with

the bank‟s

ATM services

7. What shows that customers are satisfied with the ATM services?

a) Efficient ATM transactions

b) Reduced queues in the banking halls.

c) Number of ATM transactions

d) Reduced number of ATM queries

8) How has the introduction of ATMs had an effect on the bank services.

a) Very good

b) Good

c) Fair

d) Bad

9. How did you get information about Stanbic ATM machines.

a) From the media

b) From brochures

c) From a bank Staff

36

d) From a friend

10. How would you describe Stanbic bank’s ATMs?

a) Hard to use

b) Easy to use

c) Customer friendly

d) Others

11. Do you get guidelines from the bank on how to use ATMs in case you need them?

a) Yes

b) No.

THANK YOU FOR BEING PART OF THIS ACCADEMIC RESARCH

37

APPENDIX II-INTERVIEW GUIDE

1. Which customers qualify for ATMs

2. Why is there ATM limit

3. How is the location of ATM chosen or selected

MAKERERE UNIVERSITY FACULTY OF ECONOMICS€¦ · Kyohairwe Luba, Nabakiibi Maria, Namande Mable, Nabbisere Betty and Namuyomba Jackie, whose encouraging words kept me hopeful. May

Documents