CHAPTER 1

INTRODUCTION TO THE STUDY

This chapter takes into consideration the background of the study, statement of the

problem, objective of the study, significance of the study, limitation of the study, and

the organization of the chapters.

1.1 Background

The 21st century has produced great achievements brought about by

Information Technology Development. It has brought changes that people have never

experienced before. We can talk of it in communication production facilities that have

given a new position through automated, quick, economical and reliable services.

Businesses in the world now experiences growth in the digital economy that has

provided a new stand for new methods and strategies of doing business which has

further challenged the traditional way of doing business. Digital technology uses

electrons to transfer information that conclude transaction or enhance decision-

making.

One of the areas where society has increased the utilisation of Information

Technology is in the banking industry. Using Information Technology Development

in banking means you are looking at the operational limitation caused by the

increased number of transactions that were created by customers increase in demand

for services. Certain services that are routine in nature such as cash withdrawal,

checking of balances and statements are now provided without the help of a human

teller. All these were done through the introduction of computers that were later

integrated with telephone systems, faxes and Automated Teller machines.

1
Automated teller machines are electronic devices, which allow banks’ customers to

make cash withdrawals and check their balances 24 hours a day without the aid of a

human teller (Cox, 1992). Cash holders are given cards and personal identification

numbers (PIN) to remember and use when accessing the facility to withdraw money

from their accounts. The machines are placed in areas that are convenient to

customers who can access services twenty-four hours a day. The services are

available at bank branches, airports, large retail stores such as super markets, hotels,

restaurants and other designated places. ATMs dispense cash faster than the manual

operations. They are automatic and less expensive (Cox, 1992) which is helping to

keep banks operating cost low.

1.2 Statement of the problem

For a bank to be more attractive in order to get more customers it must pay very

good attention to certain factors and this includes it timelines, accuracy, competency,

flexibility, professionalism and easier banking. These are some of the things that

customers find interest in, and will want to experience in the bank they wish to

transact business with. This is so because the Ghanaian customers in this modern

business environment are now very conscious with their time and will want to avoid

the traditional way of banking where customers join a long queue before they will be

served. The manual way of banking was not providing quality services as customers

were expecting thus making the banking system unattractive to customers. In

addressing those customer interests, banks have introduced electronic payment

schemes using access devices such as smart cards, point of sales terminals and ATMs.

In Ghana, some banks including Barclays Bank, Ghana Commercial Bank, Standard

Chartered Bank, ECOBANK, National Investment Bank and many others have

2
installed ATMs at their branches. They provide customers with services such as cash

withdrawals, balance inquiries and mini- statements. Some of the banks ATMs are

networked worldwide and therefore can be used by people who are not customers of

that bank provided they are holders of master and visa cards. With these it is believed

that the problems which were in existence during the traditional way of banking will

be solved. As Kabalika (1999) was trying to investigate customer interactions with

technological interfaces, he established that automation enhances satisfaction. Thus

this research went further in looking at the points listed below.

• Customers’ views about ATM and it service delivery.

• Whether ATM services enhance satisfaction or not.

• Some of the problems customers faces when using ATMs or some of the

negative features of the ATM.

• Some of the factors that influence ATM services leading to satisfaction and

some of the factors that influence ATM leading to dissatisfaction.

1.3 Objective of the Study

• The main objective of the study is to assess customers’ views about the ATM

and it service delivery.

Specifically, the study sought

• To determine whether customers are happy about the introduction of ATM

into the banking system and the kind of services they provide.

• To determine whether ATMs provide satisfaction or not and determine

customers level of satisfaction if they do.

• To determine some of the factors that influence ATMs leading to satisfaction

and some of the factors that influence ATMs leading to dissatisfaction.

3
1.4 Research Questions

• Are customers happy about the ATM and it services?

• Does the ATM enhance customer satisfaction? If yes, what is their level of

satisfaction?

• What are the factors that influence ATM leading to satisfaction and the

factors that influence ATM leading to dissatisfaction? In other words what are

the positive and negative features of ATM?

• What are some of the problems customers faces in using the ATM?

1.5 Justification of the study

As it was stated earlier on in the abstract, ATM and customer satisfaction is a

new way of accessing banking services and customers business needs, thus the

findings of the study will provide information which will help in analyzing the current

the ATM situations.

The findings of this research is also going to help the bank’s marketing

department as they need to have idea in order to come out with the appropriate

marketing strategy. Not forgetting the ATM section/department, the findings will help

them to identify their positive and negative features of ATM and the customers’

recommendations on how to improve the negative features. With these the bank

management can take actions on the basis of customer recommendations to improve

the services.

Studies have also revealed a close link between ATM services and customer

satisfaction. These studies shows that delivering high quality services is linked to

profitability, cost savings, and increased market share (Lovelock, 1994). Thus, as

every banking institution aims at maximising profit, it is important for them (the

4
bank) to have an idea about what the ATM users are thinking about the various

features of the ATM, what their problem areas are, their recommendations and how

they compare the ATM service of their bank with that of any other bank in order to

come out with quality services. Therefore the findings of this research will be very

useful.

1.6 Limitations of the Study

In undertaking the study, a number of problems were faced. Thus the under listed

points are some of the factors that limited this research.

• Lack of enough funds to cover every aspect of the research.

• Getting books for the literature review was also a problem.

• There was not enough available time in completing this research.

• Convincing people to help fill the questionnaire was another problem.

1.7 Organisation of chapters

For easy understanding of every aspect of this research, the researcher decided to

divide this research into four chapters. Chapter one comprised of the Introduction,

Statement of Research Problem, Research Objectives, Research Questions, Why the

Topic is of Importance, limitations of this research and the organisation of chapters.

Chapter two talked about the Literature Review and the Empirical Evidence. Chapter

three also talked about the Research Methodology, Data Collection Techniques and

Ethical Considerations. The last chapter which is chapter four talked about data

presentation, Analysis of discussion, Summary of Findings and Recommendations,

References and Appendixes.

5
 CHAPTER 2

LITERATURE REVIEW

This chapter seeks to analyze relevant research documentation and findings essential

to improve this research and its capacity to analyze the concerns it seeks to

accomplish. Different organizations have framed different definitions. Several

researches have been carried out on banking regarding their corporate social

responsibility globally and it is important to examine them in relation to this research

topic. This will enhance effectiveness and stimulate an all inclusive analysis and

discussions of critical issue in relation to the topic under consideration.

The content of this Chapter comprise the Theoretical Framework and the Empirical

Evidence.

2.1 Theoretical framework

During the last few centuries’ paper replaced metal as a major form of money.

Today paper is being replaced by digital patterns stored in computer media. Most of

the major financial transactions take place inside computers and most money is stored

on computer disks and tapes instead of in wallets and safe deposit boxes (Beekman,

1999). Money like other digital information can be transmitted through computer

networks. That’s why it’s possible to withdraw cash from your checking accounts

using ATM at bank, airport, or shopping mall which can be thousands of miles away

from your home bank

Evolution of ATM

There has been a great deal of debate over the history of ATM, including who the

ATMs inventor is. According to Invention & Technology Magazine (2000) in the late

1930’s, Luther George Simjian started building an earlier and not-so-successful

6
version of an ATM. Starting in 1939, Simjian registered 20 patents related to the

device and persuaded what is now Citicorp to give it a trial. But the patent was

unsuccessful because after six months, the bank reported that there was little demand.

Afterwards New York’s First National City Bank (now CitiBank) installed a

Bankograph (ATM predecessor) in several branch lobbies in 1960. The idea was for

customers to pay utility bills and receipts without having to see a teller. A Barclays

Bank branch near London took the pride in installing first cash dispenser made by De

La Rue Instruments in 1967. It was using paper vouchers from tellers. The machine

was called the De La Rue Automated Cash System, or DACS. This instance of the

invention was credited to John Shepherd-Barron, although George Simjian registered

patents in New York, USA in the 1930s and Don Wetzel and two other engineers

from Docutel registered a patent on June 4, 1973. Afterwards Barclays and a few

other banks introduced a machine that encodes cash on plastic cards purchased from a

teller in 1968. The problem was that the machine always eats the cards, and customers

have to buy new cards if they wanted to make more transactions. First use of ATM

magstripe cards started in 1969. Docutel installed its Docuteller machine at New

York’s Chemical Bank. The installation marks the first use of magnetically encoded

plastic. Other manufacturers got into the game, but Docutel was the first to apply for a

patent. Docutel was later credited by Smithsonian’s National Museum for American

History as being the ATM’s inventor. Doland C. Wetzel was given the credit for

developing the Docutel machine. Docutel introduced its Total Teller, the first true

fully functioning bank ATM in 1971. After 1971, proliferation began to make the

product more customer-oriented. By 1973, 2000 ATMs- mostly from Docutel were

operating in the United States. They were sold for about $30000 each. Gradually with

the popularity of ATM services this sector has developed dramatically.

7
(www.atmmarketplace.com and

(http://investors.about.com/library/investors/blatm.htm 2004 April). The same website

shows that, by 1999, ATMs were in all the continents of the world including

developed and developing countries. The largest number of ATMs was in Asia

Pacific, followed by Europe and North America while South America, had fewer

units. In the case of Africa at that time, they were limited in almost all countries

although they are now availabl.

In recent times, automatic dispensers are the tools used in service delivery. It started

in the 20th century where vending machines were used to buy postage stamps. Since

then other goods such as photocopying cards, photographs, business cards and money

are now dispensed using machines as well. Cash is dispensed by the machine called

Automated Teller Machine (ATM). ATM is a product of Information and Computer

Technology. The technology customises service offerings, reduces waiting time for

customers, serves as an alternative channel for service delivery and provides vital

information needed by customers in the shortest possible time (Lovelock, 1996). They

handle normal cash routine enquiries such as cash withdrawal, transfer, statement

request, account activity enquiry and others (Cox, 1992).

In developed countries and some developing countries, the ATM network permits

customers to collect cash from different banks as well as countries, especially where

ATMs and credit cards link with visa and Master Card holders.

In order to operate ATM successfully, a bank needs computer hardware and

software, internet service provider, adequate bandwidth, quality ICT employees,

reliable electric power supply and ATM machines. It is placed at a point where it can

be viewed widely and very convenient.

8
 The service industry

Services can be defined as intangible experiences that cannot be tested in advance

for their quality, reliability or performance and thus they are riskier purchases than

goods (Gronroos, 1990). The risk involved can be financial, physical, performance,

and time loss as well as quality aspects. These are some of the characteristics that can

differentiate services from goods.

a. Intangibility

This means services cannot be seen, touched, stored and be displayed.

b. Inseparability

This is where consumers become part of the production process as the consumer is far

away from where a centralised mass production takes place. For services both the

service provider and the consumer must be present as production is going on.

c. Perish ability

Goods can be stored but services cannot be stored because they are produced and

consumed immediately.

d. Heterogeneity: service standards are unpredictable. Sometimes it arises from

employees’ differences in skills and moods which make it very difficult to

control and maintain standards and quality. (Zeithaml, and colleagues, 1995)

and Lovelock (1989).

All these characteristic features make it very clear that services are riskier purchases

than goods. The supposed risk may include financial, physical, performance, time loss

and other quality aspects.

In any service industry, a critical decision for a firm is the determination of the

appropriate level of service quality. When customers are not satisfied with a service,

they are not only likely to terminate the service but also to relate their unfavourable

9
service experience to others resulting in decreased current and potential sales

(Keaveney 1995, Richins 1983). To retain existing customers and acquire new

customers, firms invest huge resources to improve service quality. However, pursuing

the highest level of service quality often costs too much and managers meet a lot of

challenges when it comes to providing quality services for their customers. This is so

because services are intangible and it requires serious thinking in order to provide

quality and reliable services expected by the company and customers. Anderson,

Fornell and Rust (1997) have shown that the relationship between customers’

satisfaction which is a measure of service quality and a firm’s profitability tends to be

negative in service industries. For managers, it is therefore essential to understand the

effects of improving the level of service quality on current and potential customer

relationships.

Quality is an attributable that is defined as a degree of goodness or worthiness

or excellence. It is an attribute with a special characteristics or distinguishing feature

(Oxford Dictionary). Since it is an attribute, it can be explained using variety of

variables. Gronroos (1990) suggests that perceived Service Quality is a result of an

evaluation process in which customers compare expected perceptions of service

delivery and its outcomes with what they expected. Zeithaml, Berry, and

Parasuraman, (1985) identified some of the criteria used by customers to evaluate

service quality:

Reliability: involves consistency, accurate performance and dependability.

Responsiveness: timelines of service, making transactions immediately, giving

prompt service and helpfulness.

Competence: possession of skills and knowledge in the field of that service.

Example, a car mechanic with the requisite knowledge of a particular make of a car

10
will do a better job than one who claims to be a mechanic of all the vehicles in the

world.

Access: involves approachability and ease of contact (that is, less waiting time;

convenient hours of operation; convenient location of facilities).

Courtesy: politeness; respect; considerations; and friendliness of contact personnel.

Good communication: credibility, security and understanding customers.

Tangible aspect: this includes the appearance of the physical element.

According to Kotler (1991), quality is also communicated through the price for the

service. A high price usually signals premium and quality products, including

services, to buyers. The packaging, distribution, advertising and promotion of goods

also affect the product’s quality image. Innovation in packaging services in a form

that attracts customers is called for. Poor quality leads to customer dissatisfaction.

Customer Satisfaction

Recognition of customer satisfaction started in the 1930s and 1940s which called for

organisations to concentrate and integrate their profit through customer satisfaction

According to Porter and Miller, 1985, Satisfaction can be defined as a post-

consumption evaluation that meets or exceeds expectations and Dissatisfaction is the

outcome when expectations have not been met.

Churchil and Suprenant (1999) defined customer satisfaction as a feeling a person

experiences when comparing what was received and what was expected. Oliver

(1980) also said it is the product of the accumulated experience of a customer’s

purchase and consumption. Kotler and Armstrong also defined customer satisfaction

as the extent to which a product’s perceived performance matches a buyers

expectations. From the above definitions, it means that Customers enter a market with

11
expectations of benefit and performance. Comparing results of the service enjoyed

with the expectation leads may to positive disconfirmation or negative

disconfirmation. A positive disconfirmation is an expression of satisfaction through

repeat purchases, continual usage of a service and telling others about their good

experiences with the product or service. A Negative disconfirmation is an expression

of dissatisfaction through voice complaint, exit and no subsequent demand for the

same service (Fornell, Ryan and Westbrook, 1990). Voice complaint is an active and

constructive response that is vocal and attempts to change practices, including policies

put in place by an organisation and Exit is a destructive response that occurs when

people dissociate themselves from the object of dissatisfaction by switching brands,

reducing consumption or refusing to make further purchases (Fornell, Ryan and

Westbrook, 1990).

When customers’ expectations are not met, it leads to dissatisfaction and when this

happen customers may complain and /or switch brands and sometimes spread

negative comments by word of mouth about the product or company.

Expectations, actual performance level and confirmation have an independent effect

on customer satisfaction.

Other researchers have challenged the disconfirmation of expectation model

comparing it with the Standard Value Percept Disparity Model which was developed

by Lock (1967) and later on was modified by Reily (1983). This model looks at

individual values which states that customer satisfaction or dissatisfaction is an

emotional response, it argues that it is the attainment of values which customers seek,

rather than conformation to their expectations.

12
 Why it is important to pay attention to customer satisfaction

Customer satisfaction is increasingly being valued as a key variable in models of

customer behaviour and takes a central place in marketing decisions (Naumann and

Giel, 1995). Due to this, Managers of all organisations must place increased emphasis

on customer satisfaction to enhance customer loyalty for long-term profitability and

success as was put across by Fornell and Colleagues that customer satisfaction has a

strong influence on an organisation’s profitability. Emphasis must be put on listening

to the “voice” of the customers and identifying the drivers of overall satisfaction as

was also stated by Kotler and Armstrong that feedback from customers enables firms

to identify their specific needs and efficiently allocate resources to design products

and services that maximise satisfaction. Fornell asserted that when a customer gets

used to a service

i. He/she always uses it, thus enhancing sales volume to increase.

ii. A company easily knows what the customer expects.

iii. A company can vary prices and usually increase them without fear of

losing the customer, and

iv. It leads to higher levels of customer maintenance and positive word of

mouth communication as well as increased revenue and market share.

According to the same author, customer satisfaction and great profitability follow

some pattern and they are:

i. They cause demand to curve upwards, making it steeper.

ii. They reduce marketing costs as regular customers can be profiled and given

offers that they cannot easily ignore.

iii. They increase marketing costs of competitors and

iv. They reduce customer turnover and thus fewer customer need to be replaced.

13
2.2 Empirical evidence

A fair number of theoretical and empirical researches on ATM and ATM card have

been undertaken throughout the globe due to the increasing scale of use of ATM cards

and consequent conversion of the economy into a cashless one.

In the twenty-first century, ATM cards have become one of the most popular non cash

instruments in the United States and popularity has been explosively growing around

the world. As Stuart E. Weiner (1999) pointed out:

“The total number of ATM transactions has more than doubled over the last ten

years and is estimated to reach near 11 billion again this year. And although

there are signs that ATM volume may be peaking, ATM access continues to

grow. The total number of ATM terminals has tripled over the last ten years”.

Robert E. Litan (1999) described the introduction and rapid use of ATM as the most

visible revolutions in banking sector. He also supported his claim by stating:

“…, ATMs offer consumers the convenience of banking in many more locations

than ever before. Indeed, ATMs far outnumber brick-and-mortar banks, in

large part because they are cheaper to operate than a bank branch. Today,

nearly 200,000, ATMs are found throughout the country, more than the

collective number of branches of banks, thrifts, and credit unions

(approximately 83,000)”.

The table below presents the estimated number of ATMs in the world which were in

existence during the year 2005.

14
Table 1: estimated number of ATMs in some countries in the World.

Country Numbers %
United Kingdom 54,000 3.6

USA 470,000 31.33

Canada 35,000 2.33

Africa 190 0.01266

India 11,000 0.733

Uganda 34 0.00226

Others 930,776 62.051

World 1,500,00 100%

0
Sources: www.atmmarket.place; and www.ugandamission.net

Africa had the lowest number of ATMs as at 2005 and thus per country the number is

very small. The number of ATMs in the world is expected to grow to about 1.7

million by 2009. There are about 800 banks in Africa and most of them use ATM

dispensing machines including Ghana (www.atmmarket.place ).

Maria Gloria Cobas et al.(2001) have generalized some of the driving forces behind

bank’s decisions to install ATMs in the United States. According to the author:

...in the early 1970s, when rising inflation and interest rates made it more

difficult for consumers to borrow, reduced consumer’s loyalty to their local

banks. These changes in economic conditions and consumer attitudes stimulated

competition among financial institutions. For banks that could afford the

investment,” ATMs represented an attractive strategy through which to

distinguish themselves and achieve a competitive market advantage.”....In the

second half of the 1970s, more institutions began to install ATMs to enhance

customer service and as a defensive measure against competition from other

15
banks. Cost savings to banks were not a driving factor. Consumers used ATMs

to access their accounts more frequently, so that the overall number of

transactions increased..... In the 1980s, other factors began to influence ATM

installations. Because construction and operation of brick and mortar branches

became increasingly expensive, some banks limited branch expansion or closed

branches. ATMs provided a partial substitute for those lost branches.

Professor Norman Penney claims the development of ATM services occurred for

three reasons. First, financial institutions hoped to “improve their competitive

positions by attracting customer accounts and . . . increase their revenues by

increasing loans, creating higher balances, and enhancing their financial services

packages.” Second, ATMs were designed to perform many of the same tasks as a

human teller at a lower cost. Finally, Professor Penney notes that some financial

institutions made ATM decisions based on marketing considerations. For example,

before building a new branch, one financial institution in Florida used its ATM to test

whether the location would support a branch office. Financial institutions have also

used ATMs to encourage the direct deposit of payroll (Pidgeon, 2000).

CHAPTER 3

16
 METHODOLOGY

3.0 Introduction

This chapter describes how the problem of the study was investigated and the

procedures and method used in conducting the research and how the information

gathered were analyzed.

It deals with the Background of the Study area, Population and Sample, Sampling

Techniques, Data Collection Instruments and Method of Data Analyses and

Presentation.

3.1 Background of the Study Area

Sunyani is the regional capital of Brong Ahafo Region and it is located in middle of

the region between latitude 70 55º N and 20 30ºW and it shares boundaries with the

Wenchi district to the north, Brekum and Dormaa districts to the west, Asutifi district

to the south and Tano district to the east. The Sunyani Township is divided into ten

areas which includes Sunyani Area 1, Area 2, Area 3, Area 4, Estate, Nkwaabeng,

Penkwase, Zongo, New Town and Berlin-Top. Census (2000) has revealed that the

population of Sunyani is 61,992 which represent 34.5 percent of the total population

in the region. Due to the good atmospheric condition in Sunyani agricultural

production has become one of the major occupation of it indigenes.

3.2 Study Type

The research is a descriptive study, which is made up of both qualitative and

quantitative research approaches. The case study is a popular form of qualitative

analysis entailing a detailed investigation of the cases in question in order to generate

17
valuable information. The quantitative part gave objective factors that accounted for

banks behavioural patterns.

3.3 Research Design

To obtain the necessary information for the project, the researcher solicited

information from both primary and secondary sources. Primary data were generated

from all the banks chosen as case studies in Sunyani because more banks are

introducing ATMs in service delivery. The primary data sources included

interviewing stake holders and giving out questions to respondents in a well designed

questionnaires within the Sunyani municipality. Administration of questionnaire was

at random (non-probability sampling) to the ATM users at the various ATM booths

but to the Managements of the various banks, it was given to all. This was done in

order to help the researcher to get the general views of the stakeholders on ATM in its

catchments area. The researcher also spent time in interviewing some customers and

some selected officials. This was done in order to help stakeholders get the chance to

elaborate express themselves more on some of the issues presented in the

Questionnaire. The secondary data sources included annual reports and published and

unpublished materials in the form of journal articles, papers and the internet. These

contributed to the understanding of the issues under study and were the basis of

pointing out sources of satisfaction and dissatisfaction through the use of ATM. The

researcher used tables and figures to interpret the data from the findings of the

research.

18
3.4 Population

The term population here is used to mean all the items under consideration in a

particular enquiry. A sample is a group of items drawn from that population.

For the purpose of this study, the population defined for this research comprise of all

ATM customers of the various banks in the Sunyani Municipality. Those who

qualified for this research were those who were users of ATMs in all the various

banking institutions in Sunyani.

3.5 Sampling technique and sampling size.

Sampling can be defined as the deliberate choice of a number of people (the sample)

who are to provide you with data from which you will draw conclusions about some

larger group (the population) whom these people represent. First a stratified sampling

technique was used as the population under consideration contains several well

defined groups which are the ATM customers of the various banks in Sunyani. This

method was used because it ensures that a representative cross-section of the strata in

the population is obtained. After that a simple random sampling technique was used to

obtain the sample from the total population (customers). This sampling technique was

also used because with this every member of the population stand an equal chance of

being selected to avoid being partial. Lastly a purposive sampling technique was used

as the views of all the banks that are part of the population were relevant to the study.

A sample size of 66 was used in all, which comprised of the above qualifiers.

60 were chosen from the customers and remaining 6 were the ATM managers of the

various banks.

19
3.6 Data collection techniques

Both primary data and secondary data were used for the purpose of the study. One

structured Questionnaire was used to collect primary data for the study as a way of

studying attitudes and behaviours towards the use of ATMs. The questionnaires were

both close and open ended. The survey was conducted personally at the selected ATM

booths by the researcher. Because of this the researcher had the chance to observe

customers behaviour towards the ATM. Also the researcher performed personal

interviews along side with the questionnaires in order to get a reliable piece of

information in connection to the problem understudy. ATM users and Management

views on ATM in general were seek for, concerning it introduction into the banking

institutions, some of the challenges they encounter in receiving and delivering better

ATM services and many others. Secondary data from annual reports, published and

unpublished materials in the form of journal articles, papers and the internet was used.

These also helped in the understanding of the issues understudy.

3.7 Data analysis method

Data cleaning and assessment were carried out to find out if the collected data were of

good quality. All filled-in questionnaires were checked to see if they were correctly

filled in and completed. Expressions repeatedly given by respondents were recorded

coded using the SPSS software. The results that were received were analysed using

statistical tables and figures, which helped the researcher to draw out his conclusions.

20
3.8 Ethical considerations

From the beginning of the research, respondents were assured of confidentiality of

any information through the letter of introduction explaining the purpose of the

research, which help the respondents to come out freely and give out what they also

knew about the topic under study in order to provide adequate and effective answers

for the research. Also all those whose ideas were used through published books,

articles and others were acknowledged in order to help avoid plagiarism in this

research.

21
 CHAPTER 4

PRESENTATION, ANALYSIS OF DATA AND CONCLUSIONS

Introduction

This chapter comprises of how data collected is analysed, summary of findings,

conclusions drawn form the research work and recommendations made based on the

study references and appendixes.

4.1 Presentation and Data Analysis.

Research Findings

Sunyani People and the Use of Banking Services.

Sunyani has 6 banks of which all of them have ATM facilities. The banks have the

potential of serving more than 61992 people, which was the population of Sunyani in

2000. Not all of these people are employed or have regular incomes that may be

banked. The town has about 20% of it whole population who are economically active

people engaged in formal occupations (www.ghanadistricts.com).

Bank users are people employed in the formal sector where the majority work in the

public and private sectors of the economy. This implies that only a small portion of

the Sunyani population has access to banking system.

Concerning Sunyani people and their source of earnings, it was found that there were

different types of economic activities. The economic activities include the following:

i. Agriculture: this is where there is farming, livestock keeping, forestry, and

hunting

i. Manufacturing and handcraft;

ii. Construction and real estate;

22
 iii. Wholesale, retail trade, restaurants including hotels;

iv. Transport and communications;

v. Finance, insurance, and business services;

vi. Public administration, education, health, police and military;

vii. Electricity, water supply and sewerage services; and

viii. Other general services

All the economic activities listed above operate at large, medium, small or micro

enterprises. The small and micro businesses are largely informal.

ATM users and Gender Perspective in Sunyani

The study showed that both men (61.67) and women (38.33) used ATMs. This pattern

is a reflection of gender relations in Sunyani where a large number of males work in

formal employment while there are few females. This also explains males’ higher

access to education than females and recruitment policies based on academic

qualifications which provide more opportunities for males than females. Therefore, it

is no accident to find a low number of females using the services of ATM.

Table 2: Customers’ Age Profile and Use of ATMs in Sunyani.

Age in years Number of people Percentage %

18-25 21 35
26-40 29 48.33
41-40 6 10
51-60 4 6.67
60+ 0 0
Total 60 100%
Source: survey data

Table 2 shows that almost all customers within the working ages use ATM service.

Customers start using banking service at the age of 18 onwards. The Ghanaian

education system is the reason for this. Primary education starts at 6 years, followed

by 3 years at Junior High, 3 years at Senior High school and four years in tertiary.

23
Students enter into the tertiary institutions at the age of 18. These students who have

to a long distance to school are been encouraged to open bank accounts to prevent

them from going back to the house anytime they need money since the money can be

channelled to them through their bank accounts. Also those who apply for the

Students Loan are been instructed to open bank accounts in recent years so as to

channel their allowances. Those captured in the study were the university students, the

Polytechnic students and the nursing students. Upon getting a qualification, a person

may find a job at the age of 25 years or more. At the initial stage of employment a

person may prefer direct payment as he/she will be trying to settle down. This is the

reason for the high number of customers (48.33%) between 26-40 years.

Table 3: ATM users and Duration with a Bank

years Number of customers Percentage %

Less than 1 year 3 5.0
1-10 46 76.7
11-20 7 11.7
21-30 2 3.3
31-40 2 3.3
41+ 0 0.00
Total 60 100
Source: survey data

Majority of bank customers (76.7 %) who were interviewed had used bank services

for a period of 1-10 years. Very few people (6.6 %) had used bank services for more

than 20years. The remaining (11.7%) have used bank service for a period of 11-20

years. The few customers who had used banking services for more than 20 years are

those who have been in work for a very long time and have higher salaries and can

afford to use chequebooks in place of ATMs. Such customers may use cheques to

settle their transactions where accepted. Table 3 above shows that more than 50% of

those interviewed had been using bank services for 6 and over 30 years. This means

that expressions given by those customers are based on long term experience or

exposure to banking services.

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Table 4: customers’ views on ATMs

Number %
Happy 52 86.7

Not happy 8 13.3

Total 60 100

Source: survey data

Table 5: features of the ATM that makes customers like it

Number %
Service delivery duration 52 100
flexibility 52 100
Machine accuracy 52 100 Source: survey data
It is able to perform exactly the 52
100 Table 4 reveals that majority (86.7%)
normal cash routines

of the respondents are happy about ATM and it services and thought that it was the

right decision to introduce it into the banking system. Their reasons are presented in

Table 5. This table shows that customers are happy about ATM services because of

three main reasons although there are others. They include it service delivery

duration, it flexibility and the machine accuracy. Some few customers (13.3%) were

not happy about the ATM and their reasons were expressed in Table 6

Table 6: some of the negative features of the ATM customers don’t like.

Attribute Yes No
Number % Number %
Card locking 60 100 0 0
Delay in card delivery 33 55 27 45
Machine complexity 22 36.7 38 63.3
Machine breakdown 60 100 0 0
Unsuitable location 60 100 0 0
Unsecured 37 61.7 23 38.3
ATM charges 60 100 0 0
Withdrawal limitations 60 100 0 0
Unreliable network 60 100 0 0
Not trust worthy 47 78.3 13 21.7
Poor money quality 60 100 0 0
Poor service after working hours 60 100 0 0
Source: survey data

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Table 6 present to us some of the negative features of the ATM and some of the

problems customers encounter when using the ATM in Sunyani. They include ATM

charges, poor money quality, unreliable network, unsuitable location, card locking,

machine breakdown and poor service after working hours. These were the main

problems that all the respondents (100 %) agree it exist.

Table 7: customers’ feelings about ATMs services

Number %
Satisfied 38 63.3
Not satisfied 14 23.3
Neutral 8 13.3
Total 60 100
Source: survey data

Table 8: factors that influence ATM leading to satisfaction in customers.

Number %
Fast services 38 100
Machine accuracy 38 100
Easy to operate 38 100

Source: survey data

Table 7 shows that majority (63.3%) of customers in Sunyani are satisfied with ATM

services and a number of them (23.3%) are not. Some few people (13.3%) were also

not certain about being satisfied or not. Customers were satisfied due to three main

reasons which includes the fast services ATM provides, it accuracy and because they

are easy to operate. Also the percentage of customers not satisfied and some not

certain about being satisfied was explained by the negative aspects expressed by

customers, which was presented in Table 6.

Table 9: customers’ level of satisfaction with ATM services

Number %

Satisfied 35 92.1

26
 Very satisfied 3 7.9
Total 38 100
Source: survey data

The table above indicates that majority (92.1) of the customers level of satisfaction is

“1” representing “satisfied". Only (7.9%) of the customers who were satisfied with

ATM and it services were very satisfied which was denoted by “2”.

4.2 Discussion of results

The first three positive responses from Table 5 confirm the attributes that are

expected to be met by ATMs as pointed out in the literature review and is in

agreement with Sullivan who views that service adds value to a sector which in this

study means that ATMs add value to banks. The study revealed that Customers are

happy about ATM services because of the issues discussed below.

Service Delivery Duration

The study revealed that ATMs saves time. This can be seen in Table 5 above which

shows clearly that all the respondents who were engaged in this research agrees that

time saving is one of the positive features of the ATM. The ATM saves time since

customers did not have to queue for a long time to withdraw cash compared with a

bank that operates manually. This finding relates perfectly with Cox (1992) argument

that, proper use of technology such as ATM saves waiting and queuing time

compared with using traditional banking services, where long delays were

experienced when there are large numbers of customers in the bank.

Flexibility

Also respondents were happy about the introduction of ATM and it services because

it offer flexibility. Customers can get money at any time; a flexibility that was not

provided for a long time by the Sunyani banking institutions. The presence of flexible

27
service in terms of time enables customers to draw out cash 24 hours a day, 7 days a

week and 365 days in a year. In terms of location, customers can withdraw money at

any place where such bank has it ATM services, with the same charges, unlike the

case of traditional banking service. This can be pointed out in Robert E. Litan (1999)

statement in the empirical evidence where he described the introduction and rapid use

of ATM as the most visible revolutions in banking sector. He supported his claim by

stating: “…, ATMs offer customers the convenience of banking in many more

locations than ever before. Also it flexibility enables customers to withdraw cash after

working hours and during public holidays which did not exist some years back.

ATMs Performs the normal cash routine enquiries.

The normal cash routine enquiries which were also revealed by Cox in the literature

review are discussed below.

Cash Withdrawal

From the ATM booth any ATM card holder can withdraw any amount of money in a

day from his or her account.

Transfer

Any amount up to account balance can be transferred between accounts under the

same issuing bank within 24 hour period.

Statement Request

The customer can send request to the bank by the ATM, when he/she requires his/her

detail Account statements. The statement generally shows a ledger balance and an

available balance, is the same format as a teller terminal balance request.

Account Activity Enquiry

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The ATM users can have information regarding the account balance of his/her

account each and every time the ATM transaction is occurred. ATM has an option to

provide a mini statement showing the last transactions of a customer.

Cheque Book Request

The customer can send request to the bank by the ATM for new cheque book, when

his/her current cheque book is finished.

Enquiry

Customer can enquire about anything, like any service, product, facilities through

ATMs are able to perform these functions in a more convenient manner without

customers passing through any long process. This result has proved Cox’s statement

in the literature review.

These issues discussed above implies that so far ATMs are accepted because of the

problems experienced when banking operations were carried out manually in

Sunyani.

ATM and Customer Satisfaction

ATMs enhance customer satisfaction through it service delivery, which was clearly

presented in Table 8 above where we have majority (63.3 %) of the respondent saying

ATMs enhance satisfaction. Customers feeling of satisfaction can be linked to the fact

that the machines produce accurate results and enhance fast services.

Machine accuracy

Customers have realised that the machines are accurate in counts compared with

experiences of shorts from manually delivered services where the possibility of

employees making mistakes is very high.

Fast services

29
Also customers have realised that the ATM provides fast services which reduces the

time one has to spend before withdrawing cash as compared to the manual system

where customers were being served by a group of bank employees, which included a

person who collects the cash book or cheque from the counter and gives them to a

clerk who checked the customer’s accuracy in filling out a form or writing a cheque, a

verifier who check whether the customer had an adequate cash balance, an accountant

who endorsed the payment to the customer, a clerk who read out the name again and

guided the customer to the counter where teller paid out the money to the customer.

The process took a minimum of forty five minutes during less busy days.

Easy to operate

Customers have revealed that the machines are easy to operate although one needs to

read and understand the English language before he/she can operate it. Customers

saying that the ATM is easy to operate were reflected in Table 6 where only a few

people (36.7 %) said the machine is complex.

Although ATMs enhance satisfaction, the study revealed that sometimes customers

encounter some problems which limit their level of satisfaction. This sometimes leads

to dissatisfaction. From Table 7, it can be seen that (23.3 %) of the customers were

against the fact that ATM services enhance satisfaction and (13.3 %) were not certain.

This was explained by the negative aspects of the ATM expressed by customers and

presented in Table 6. Even in assessing the satisfaction level of those who said ATM

services enhance satisfaction, it was realised that only a few customers (7.9 %)

representing 3 out of the 38 customers were very satisfied. This shows that there are

certain factors that limit customers’ level of satisfaction which in some cases leads to

dissatisfaction and these factors are linked to some of the problems or negative

features of the ATM. Some of these features are discussed below.

30
Machine breakdown:

All the ATM users that were engaged in this research believe that machine breakdown

is one of the main problems of ATM. Machine breakdown generally occurs for the

following reasons:

Poor quality notes: If the notes supplied in the ATMs are of poor quality, the chance

of machine breakdown increases. Because the sensor that picks the notes from the

cassette can’t operate smoothly.

High frequency of use: As the number of ATMs is less than that required in the

Sunyani municipality, the frequency of use of ATM is very high. As ATM is a

machine, the probability of going out of order rises with the high frequency of use of

machine.

ATM charges:

Once again, all the customers that took part in this research were also not happy about

the fees charged for the use of ATM and in their own reasons see it to be unnecessary

cost, given that their money was being used to do business by the banks.

The table below shows the different fees charged by the various banks in Sunyani.

Inter- bank charges are higher than those presented in the table.

Table 10: different fees charged by the various banks in Sunyani

Name of the Bank Amount in Gh ₵

Ghana Commercial Bank 0.25p

BARCLAYS Bank 0.20p

ECOBANK 0.20p

National Investment Bank

Social Security Bank

Agricultural Development Bank

Source: survey data

Unreliability of the Network:

31
Customers are also not happy about the way ATM networks are not stable. At times,

internet services were slow due to bandwidth limitations when Internet Service

Providers failed to get connections locally as well as with international satellites.

Unsecured:

Some customers (61.7 %) believe that the security system of various banks’ ATM is

not sufficient. By the term “unsecured” the customers meant that there exists security

problem for them outside the ATM booths. It has found that from outside, any person

can see what the customers are doing when passing by.

Machine complexity:

Some ATM users also believe that the ATM machines are complex that is they are not

easy to use. Customers generally put this argument when their cards are retained by

the ATM machine. Cards may be retained for many reasons but ultimately the blame

goes to the machine. Another reason can be that people in Sunyani still get frightened

while using any type of machine that deals with money.

Delay in card delivery:

Some respondents (55 %) believe that the ATM centers are not efficient in making

quick delivery of cards. Delay in card delivery generally occurs because the Banks

who has their branches in Sunyani does not any ATM card embossing machine in

Sunyani. So when a customer makes a request for an ATM card, it has to be sent to

their head quarters mainly in Accra. So it takes time before customers get hold of their

ATM card.

Poor Currency Quality:

All the customers believe that poor currency quality is a great problem of ATMs in

Sunyani. This high level indicates that the notes supplied at various ATMs are not of

32
good quality. As a result, the customers receive poor quality notes such as old notes,

torn notes etc.

Withdrawal limitations

Customers were not happy about the policy related to the maximum amount that can

be of cash withdrawn from ATMs. The study realised that at present, GCB offers a

maximum of single withdrawal of GH₵ 80.00, NIB allows, BARCLAYS and

ECOBANK allows Gh₵ 200, ADB….. and SSB….. This increased the time taken by

a customer who had to repeat the process so as to get the desired amount of cash.

Poor service after working hours

Further more some customers also complained about poor services after working

hours and during weekends. One of the main problems customers face during these

times is the ATM running out of cash.

The research also revealed that some customers feared to use ATMs because they did

not want to expose their ignorance to the public especially those who were given

ATM cards for the first time. This concern came from a customer who had to ask for

help in operating the ATM. According to him although brochures are attached to the

card when given, it only guides them on how to operate the ATM while the actual

operation was done by the customer him/her self. It was also realised that there is no

consideration being given to people with disabilities such as blindness and people in

wheel chairs. This negates the role of serving customers as these people cannot get

access easily.

All these issues raised by different ATM users in Table 7 reduce the value of services

delivered by ATMs and thus produced dissatisfaction in customers. This reinforced

the perception of ATM services as being better than the manual system.

33
4.3 Summary and conclusions

The study is about ATM and Customer Satisfaction: A case study of the banking

institutions in Sunyani.

The research showed that

i. Customers are happy about the introduction of ATM into the banking

system due to two main reasons. These include the flexibility ATM

provides, it service delivery duration and because ATMs performs the

normal cash routine enquiries.

ii. ATM services enhance satisfaction due to the accuracy of the machine and

the fast services it provides as compared to the manual banking system

which existed before the introduction of the ATM and because they are

easy to operate.

iii. Although ATM services enhance satisfaction the level of this satisfaction

is reduced by technological and processing failures which sometimes lead

to dissatisfaction. Some of these problems include card locking, machine

breakdown, unreliable network and others.

Therefore the study concludes that because ATM addresses some of the problems

that customers were facing during the period where banking operations were manual

such as time wasting and making of mistakes, customers are happy about it

introduction into the banking system. ATMs enhance satisfaction, but in a situation

where the system fails, with periodic long queues, customer dissatisfaction mounts.

Further studies can be undertaken in this area. For instance, Quality Function

Deployment (QFD) technique may be used to find ways to improve customer

satisfaction of ATM service. QFD concentrates on maximizing customer satisfaction

(positive quality) by seeking out both spoken and unspoken needs, translating these

34
into actions and designs, and communicating these throughout the organization end-

to- end. Further QFD allows customers to prioritize their requirements, benchmark

against competitors, and then direct to optimize those aspects of product, process, and

organization that will bring the greatest competitive advantage

(www.qfdi.org).

4.4 Recommendations:

For Management:

Banks must pay attention to the short comings of ATMs, as supported by Sullivan

(1993) who urged that the routine activities must be developed to monitor and

evaluate services from time to time. Fornell and Werner emphasized customer loyalty

to a service when satisfied and said it increased profitability if well maintained by an

organisation Banks should conduct frequent studies in order to help them know some

of the causes of service dissatisfaction. This is because ATMs can only communicate

with customers through their displays on the screens and can never capture the

feelings, experiences, happiness or frustrations that customers go through. Due to this,

banks have to design a different mechanism to capture this information and this can

only be done by conducting frequent studies. Some of the issues discussed below can

be looked at.

At present, the number of ATM location are not sufficient to meet the needs of

growing number of ATM users thus new ATM location is a crying need. They should

not only be confined to bank buildings, but should also be placed in shopping areas,

retail stores, large hospitals and institutions that have large numbers of people,

example in all the tertiary institutions in Sunyani, police and military barracks and so

forth, to enhance the flexibility of banking services. ATM users have suggested the

35
need for new ATM locations. So the top management should consider the growing

demand of new ATM locations.

Better quality currency is another important recommendation that the banking

institutions must take into consideration. Customers of ATM think that the currency

quality should be improved. It can be done by supplying new notes to the ATM. The

banks should make sufficient arrangement so that they can receive better quality notes

from the Bank of Ghana.

ATMs should be more users friendly. User friendliness can be improved by

increasing awareness of how ATMs can be used. Another option may be redesigning

the software used in ATMs.

Safety and security measures should be improved inside and outside ATMs.

Nontransparent glasses should be used so that people outside the ATM booth can’t

see what is happening inside the ATM and more security measures outside the ATM

booth through requesting the appropriate law-enforcing agencies.

36
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