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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: ……………………………….
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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.
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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.
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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.
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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
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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
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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
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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
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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.
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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.
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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.
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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.
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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).
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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
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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)
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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).
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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
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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.
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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
Source: primary data.
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
Source: primary data.
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
Source: primary data.
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
Source: primary data.
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
Source: primary data.
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.
Responses Frequency Percentage (%) Cumulative
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
Source: primary data.
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.
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Table 10 : Shows responses on the complictability of ATMs.
Responses Frequency Percentage (%) Cumulative
frequency
Strongly agree 12 30 30
Agree 10 25 55
Not sure 5 12.5 67.5
Disagree 7 17.5 85
Strongly disagree 6 15 100
Total 40 100
Source: primary data.
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.
Responses Frequency Percentage (%) Cumulative
frequency
Strongly agree 5 12.5 12.5
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
Source: primary data.
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.
Responses Frequency Percentage (%) Cumulative
frequency
Strongly agree 16 40 40
Agree 10 25 65
Not sure 0 0 65
Disagree 8 20 85
Strongly disagree 6 15 100
Total 40 100
Source: primary data.
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.
Responses Frequency Percentage (%) Cumulative
frequency
Strongly agree 12 24
Agree 8 16
Not sure 3 6
Disagree 10 24
Strongly disagree 7 30
Total 40 100
Source: primary data.
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.
Responses Frequency Percentage (%) Cumulative
frequency
Strongly agree 5 12.5 12.5
Agree 13
32.5 45
Not sure 3 7.5 52.5
Disagree 9 22.5 75
Strongly disagree 10 25 100
Total 40 100
Source: primary data.
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.
Responses Frequency Percentage (%) Cumulative
frequency
Strongly agree 2 5 5
Agree 6 15 20
Not sure 5 12.5 32.5
Disagree 15 37.5 70
Strongly disagree 12 30 100
Total 25 100
Source: primary data.
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
Responses Frequency Percentage (%) Cumulative
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
Source: primary data.
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
Responses Frequency Percentage (%) Cumulative
frequency
Very good 12 30 30
Good 15 37.5 67.5
Fair 9 22.5 90
Poor 4 10 100
Total 40 100
Source: primary data.
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
Source: primary data.
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.
Responses Frequency Percentage (%) Cumulative
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
Source: primary data.
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
Responses Frequency Percentage (%) Cumulative
frequency
Yes 24 60 60
No 16 40 100
Total 40 100
Source: primary data.
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