ASSESSMENT OF CUSTOMER SATISFACTION AND ATM

(AUTOMATIC TELLER MACHINE) SERVICES AT

COMMERCIAL BANK OF ETHIOPIA:

THE CASE OF 22 MAZORIA BRANCH

HELEN TESSEMA

Senior essay submitted to

the college of Business, Economics and social sciences,
unity university, department of management and marketing.
In partial fulfillment of the requirements for the
degree of marketing management

Addis Ababa

June, 2019

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 Student Declaration

I the undersigned, hereby declare that this senior essay is my original work prepared under
the guidance of Mr. Teshome Abebe. All sources of materials used for this paper have been
duly acknowledged and this senior essay is not presented by me or any other party for any
purpose.

Name: _______________________________________
Signature: ____________________________________
Date: ________________________________________

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 Advisor’s declaration

This paper has been submitted for examination, by student Helen Tessema with my proper
advice and approval thereof.

Name of Advisor: ________________________________

Signature: ____________________________________
Date: ________________________________________

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 ACKNOWLEDGMENT
Before all I would like to thank in all our life is the almighty God. Since all things has been
done by him. Next, I would like to express my deepest gratitude, pleasure and appreciation to
our advisor Instructor Teshome Abebe for his great contribution in giving advice deeply
about the concept of this research project.

I would simply say thanks to my family members since I cannot find the right words that can
tell how thankful I am for them. Thank you all for being by my side all the way. You have
always made me feel protected and appreciated. My special appreciation goes to my Mom
who gave me everything I have now.

Last but not least, this thesis would not have been completed without the huge support I have
received from different people and Commercial bank of Ethiopia (22 mazoria branch
office) employees. My gratitude is also due to the officials and branch manager for
allowing me to have access to important documents and for their heart full assistance
throughout the study.

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 TABLE OF CONTENTS
Contents Page
ACKNOWLEDGMENT............................................................................................................. i
Abstract ....................................................................................................................................... i
Table of Contents .......................................................................................................................ii
List of Table .............................................................................................................................. iv
CHAPTER ONE ...................................................................................................................... 7
INTRODUCTION.................................................................................................................... 7
1.1 Back ground of the study ............................................................................................ 7
1.2 Statement of the Problem ................................................................................................ 9
1.3 Basic research questions ................................................ Error! Bookmark not defined.
1.4 Objective of the study.................................................................................................... 10
1.4.1 General objective ................................................................................................................. 10
1.4.2 Specific objectives ............................................................................................................... 10
1.5 Significance of the study ......................................................................................................... 10
1.6 Scope of the Study ......................................................................................................... 10
1.7 Limitation of the study .................................................................................................. 11
1.8 Research Methodology .................................................................................................. 11
1 .8.1 Background of the organization ............................................. Error! Bookmark not defined.
1.8.2 Research design.................................................................................................................... 11
1.8.3 Source and Method of data collection.................................................................................. 12
1.8.4 Sampling technique ................................................................. Error! Bookmark not defined.
1.8.5 Sample Size Determination ..................................................... Error! Bookmark not defined.
1.8.6 Method of Data Analysis ..................................................................................................... 12
1.9 Organization of the study .............................................................................................. 12
CHAPTER TWO ................................................................................................................... 13
2. REVIEW OF RELATED LITERATURES ........................ Error! Bookmark not defined.
2.1 What is a service.........................................................................................................................8

2.2 What is a banking Service…………………………...…………………………………………8

2.2.1 Types of Banking service………………………………………………………………….8

2.2.2 Characteristics of banking service…………………………………………………………8

2.3 Dimensions of banking service……………………………….…………………………………8

2.4 E-banking ...................................................................................................................... 15

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 2.5 Automated Teller Machine ............................................................................................ 15
2.6 Core banking Service and Customer Satisfaction ......................................................... 18
2.7 Customer Satisfaction.................................................................................................... 21
2.8 Factors that cause Customer Satisfaction ...................................................................... 22
2.9 Customer Satisfaction in Banking Services .................................................................. 24
CHAPTER THREE ............................................................................................................... 25
DATA ANALYSIS, PRESENTATION AND INTERPRETATION ............................... 25
Introduction .............................................................................. Error! Bookmark not defined.
3.1 Profile of the respondents .............................................................................................. 25
3.3 Factors affecting ATM system........................................................................................... 26
3.3 Barriers of adopting E-banking system in Ethiopia ........................................................... 27
3.3.1. Technological factor ........................................................................................................... 27
3.3.1.1. Perceived Risk.................................................................................................................. 28
3.3.2 Environmental factor............................................................................................................ 28
3.3.2.1 Lack of adequate ICT infrastructure ................................................................................. 28
3.3.2.2 Lack of legal and regulatory framework ........................................................................... 29
3.3.2.2 Lack of competition .......................................................................................................... 29
Questionnaires related with the drivers of adopting ATM system in 22 branch ............. 30
3.3 Perceived benefits/Drivers of adopting E- banking system in Ethiopian banking
industry ................................................................................................................................ 30
3.3.1 Perceived ease of use ........................................................................................................... 31
CUSTOMER SATISFACTION QUESTIONNAIRE (CSQ).................................................. 32
CHAPTER FOUR .................................................................................................................. 35
SUMMARY OF FINDINGS ,CONCLUSION AND RECOMMENDATIONS .............. 35
4.1 Summary ....................................................................................................................... 35
4.2 Conclusion ………………………………………………………………………………………………………………………..

4.3. Recommendations ........................................................................................................ 36

References ................................................................................................................................ 38
Annex I..................................................................................................................................... 39
Annex II ................................................................................... Error! Bookmark not defined.

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 LIST OF TABLES
Table Page

Table 1: 3.1 Age, sex and education status ........................................................................................... 25

Table 2 : 3.2 Technological and Environmental factors ...................................................................... 26
Table 3 : 3.3 The drivers of adopting ATM system ............................................................................. 30
Table 4 : 3.4 Customer Satisfaction Questionnaires ............................................................................ 32

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 LIST OF ACRONYMS
ATM Automated teller machine
CBE Commercial bank of Ethiopia
ICT Information communication technology
SMS Short message
TAM Technology acceptance model

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 Abstract
This research study was assessing the level of customer satisfaction in ATM service in case of
commercial bank of Ethiopia in 22 Mazoria branch. The objective of the study was to assess
the level of customer satisfaction in ATM service in commercial bank of Ethiopia at 22
Mazoria branch. The researchers have identified some major fact that level of customer
satisfaction in ATM service based on the customer replied the methodology of study used
descriptive method because the study conducted on current situation of the organization.
From this study the researchers took 50 respondents by using convenience sampling
techniques and gathered data through questioner and interview. The data which gathered
from the customer of the organization was presented and analyzed through tabulation and
percentage. These are two basic benefits that drive banking industry to adopt technological
innovation, such as technology acceptance model (TAM) as perceived ease of use and
perceived use fullness. In general, the finding of the study, offer additional benefit for the
adoption of ATM, such as enhancing customer satisfaction, reduce the number of customers
come to banking hall, increase the productivity of banks, increase reliability and accessibility
of banking service, creating good relationship between clients & bank and also used as a
better information control. For the successful implementation of ATM system ICT
infrastructure, is a major prerequisite, so government, ATM need to move away from
traditional bases of retail bank competition to a new technology based form of competition by
focusing on cost reduction, customer retention, awareness, credibility, security, ease of use,
and wider scope of products and services.

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 CHAPTER ONE
INTRODUCTION

1.1 Background of the study

Customer satisfaction is a person’s feeling of pleasure or disappointment resulting from
comparing a products perceived performance (outcome) in relation to his or her expectation
(Kastler and Keller, 2006) if the performance falls short of expectations, the customer is
dissatisfied. If the performance exceeds expectations, the customer is highly satisfied or
delighted. If the performance matches the expectations, the customer is satisfied. Customer
satisfaction will be influenced by specific product or service features and by perceptions of
quality.

The banking industry has under gone a major change to the adoption of E-bank. One the latest
channel distribution to be used in financial service organization is electronic banking; this was
established in the mid 1990’s, their after steadily become more important. The important of e-
banking business rely on efficient and rapid access to banking industry for cash flow review,
auditing and daily financial transaction processing. E-banking offers easy of access, secure
transaction and 24hour banking option. From startup companies to eliminate run to the bank and
to make financial decisions with updated information, generally e-banking gives broad service to
provide the customer and other financial institution some of the e-banking system to provide
internet banking, mobile banking, telephone banking, SMS banking, point of sale, debit card,
credit bank. Most widely used e-banking instrument is ATM card. Automated tailor machine
(ATMs) where the first well known machine to provide electronic access to customers. This
system gives service the customer outside the banking hall. ATM is designated to perform the
important function of bank it is operated by plastic card with its special features. The plastic card
is replacing check, personal attendance of customers, banking hour’s restriction and paper based
verification.

ATM has made hard cost just second away all throughout the day at every corner the globe.
ATM allows us to do a number of banking function such as withdrawing cash from ones
account, making balance inquires and transferring money from one account to another using a
plastic magnetic strip cad and personal identification number issued by financial institution (S,

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Snip, MS, and Kamal). ATM allows a bank customer to conduct their banking transaction from
almost every other ATM machine in the world. The ATM has become a medium for non-cash
transaction such as payment of bill, insurance payments, printing of statement or even accessing
the internet (Roma Krishnan and Venkoba Roq 2006). Transportation are made accurate, faster,
secure and profitable with the use of ICT in banking as compared to the manual approach which
was being used formally, especially in developing nation (Khan,2010). Banks are increasing
their technology based service option to remain competitively.

In 1963 the Ethiopian government split the state bank of Ethiopia in to the national bank of
Ethiopia, the central and the commercial bank of Ethiopia (CBE). In 1980 the state bank of
Ethiopia established a branch in that Sudan government nationalized in 1970. Then in 1980 the
government merged Addis bank into the Commercial Bank of Ethiopia to make CBE the sole
commercial bank in the country. The government had created Addis Bank from the newly
nationalized Addis Ababa bank and the Ethiopian operation of Bqon-Codi- roman and Banco-di
Napoli in 1963 and of which it owned 40% at the time of nationalization Addis Ababa has 26
branches. The CBE is the largest Commercial bank in Ethiopia. As of June 2011 it had about
85.5 billion birr in asset and held approximately 63.5 % of deposits and about 38% of all bank
loans in the country. The bank had around 8000 employees who staff is head quarter and it’s
over 500 branches positioned in the main cities and the regional towns. The latter includes 45
branches in the national capital of Addis Ababa.

Currently, Commercial Bank of Ethiopia is highly expanding and it also uses different
technologies like ATM, Mobile Banking and internet banking. The ATM service have some
problems in 22 Mazoria branch such as lack of awareness how to use, failing of the ATM
services due to Electricity and lack of follow up by the operators.
Therefore, this research Acknowledgement studies customer satisfaction in ATM service in case
of commercial bank of Ethiopia in 22 Mazoria branch.
Vision: Become a world class commercial bank by the year 2025

Mission: We are committed to best realize stock holders need through enhanced financial
international globally and supporting national development priorities by applying highly
motivated skill well as state of the art technology. They strongly believe that winning the public
conference in the base of their success.

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Objective: The objective of CBE is to provide customers with excellent services on all trade
services requests consist with the bank developed performance standard that leads to an
interrupted customer satisfaction.

1.2 Statement of the Problem

Nowadays, business environment are changing rapidly. The competition among industries is
becoming intense. Information technology is a key aspect which may be considered as a driving
force for such radical change such phenomena affect either negatively or positively. Internet
seems mandatory to each and every piece of the work to be done. Without any hesitation the
researchers say that the success or failure of a particular organization is determined by its
product or service in a way that satisfies and meets the needs and expectation of its customers
respectively. These days, the rapid technological advancements have led the banking industry to
use ATM as one or the tools in improving the service rendering mechanism. Therefore, the study
aims at investigating ATM service and customer satisfaction in commercial bank of Ethiopia in
22 mazoria branch. The main problem of the banks are lack of give awareness to customers
about ATM machine , network failure, lack of choose the suitable location, lack of giving the
required amount of money, and limited machine in the city. The researcher is examining the
level of customer satisfaction in commercial bank of Ethiopia to give quality service and satisfy
their customers in ATM service.

Finally, even though there are researches conducted in other countries like Bangladesh and
revealed that unavailability of a backbone network connecting the whole country; inadequacy of
reliable and secure information infrastructure especially telecommunication infrastructure;
sluggish ICT penetration in banking sector; insufficient legal and regulatory support for adopting
e-banking etc. are the major challenges for the efficient adoption of ATM banking in the country
(Mohammad ,2008 ), there is no prior study conducted in Ethiopia. Thus, the purpose of this
paper study was to examine the level of customer satisfaction in ATM service at commercial
bank of Ethiopia in 22 Mazoria Branch.
The researcher was tried to answer the following basic research questions.
1. What are the levels of customer satisfaction with various aspects of ATM service provided
by CBE in 22 Mazoria branch?
2. What are the factors that affect customer satisfaction of ATM service?

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3. What are the drivers of adopting ATM system?

1.3 Objective of the study

1.3.1 General objective

The general objective of the study was to Assesses the level customer satisfaction in ATM
service at commercial bank of Ethiopia in 22 Mazoria branch.
1.3.2 Specific objectives
1. To examine the level of customer satisfaction with various aspects of ATM service provided
by CBE in 22 Mazoria branch.
2. To identify factors that affects customer satisfaction with ATM service.
3. To identify the drivers of adopting ATM system.

1.4 Significance of the study

This study was expected to show essential factors that contribute to ATM service and enhance
customer satisfaction. The study was maintain its significance in
- It was help to identify the problem and to solve these problems for the Bank.
- It gives available in put to handle potential customer satisfactions for the Bank.
- The study used to make the machine to be accessible and readily available everywhere.
- It helps the researchers to gain experience and serving as a guide for other researchers.

1.5 Scope of the Study

This study was focused on the customer satisfaction with ATM service in commercial bank of
Ethiopia in 22 Mazoria branch. The researcher was use descriptive statistics for cross sectional
data. The scope of the study was focused on:
Geographically: The boundary of the study was limited to commercial bank of Ethiopia in 22
Mazoria branch. Because of time, cost, lack of experience about the research finding.
Conceptually: also the study was focused only customer satisfaction of the bank and other
marketing activities should not be considered because of time and the researchers’ capacity.
Methodologically: the researcher was use descriptive research method and non-probability
sampling that is convenience sampling.

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5.1 Delimitation of the study

5.1 Limitation of the study

While conducting the research the following limitations become hinders.

 Lack of cooperativeness of management and employers however the researcher tried to

encourage them into disclosing the required information.
 Fulfilling the questionnaire carelessly. But the researcher created awareness and the form
was filled properly.
 Long bureaucracy

1.6 Research Design and Methodology

1.6.1 Research design

The researcher was use descriptive research design to examine customer satisfaction in ATM
service. The reason for using this design due to the suitability of describes the characteristics of
the customers’ satisfaction of the bank in ATM service.

1.6.2. Sampling procedure

As it is difficult to deal with total population, the researchers were selecting the target
respondents for the study targeted 50 local customers who have had at 22 branch ATM service
experience. The researcher would take this sample as the result of the implication that describe
sample. As Roscoe (1975) cites in Saharan (2000:296), “Sample sizes larger than 30 and less
than 500 are appropriate for most research”. Having in mind these limitations, the sample size
that was consisted of about from 30-500 are a representative for one’s research case area with
this the researchers focused on only 50 customers that he believes that the selected sample would
represent the customers in 22 Mazoria branch. The researcher used non-probability sampling
because the population is unknown. From non-probability sampling the researchers were select
convenience sampling technique, because it serves as the basic for sampling technique, easy to
practice, easy to use and it’s cost effective.

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1.6.3 Sources of data
The researcher should have focused mainly on data which obtained from primary source and
secondary source. The primary data would collect from customers of commercial bank of
Ethiopia about their perception of ATM service and customer satisfaction. The primary source of
data was used questionnaires, direct observation and interviewing. The secondary data would be
collected from books, documents and internet.

1.6.4 Data collection tools

The main instrument of data collection would be questionnaire for customer of the ATM bank.
The questionnaire would be consists of close ended and open ended. The researcher is using this
instrument because it is suitable to achieve objective of data collection about customer
satisfaction in ATM service. Interview would be prepared for branch managers of the
commercial bank of Ethiopia in 22 Mazoria branch.

1.6.5 Method of Data Analysis and presentation

After all the data collected through questionnaires and interviews, the researchers used table and
percentage to analyze and interpret the raw data in qualitative.

1.7 Organization of the study

The research was containing four chapters. The first chapter contains introduction, background
of the study, statement of the problem, objective of the study, significance of the study, scope of
the study, research design and methodology. Chapter two were contains literature review,
chapter three deals analysis, discussion and interpretation. Chapter four contains summary of
findings, conclusions and recommendations. The references and the appendixes are presented at
the end of the paper, respectively.

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 CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 What is a Service?
A service is a means of delivering value to customers by facilitating outcomes customers want to
achieve, but without the ownership of specific costs and risks. In other word services are the non-
physical, intangible parts of our economy, as opposed to goods, which we can touch or handle.
Services, such as banking, education, medical treatment, and transportation make up the majority
of the economies of the rich nations. They also represent most of the emerging nation’s
economies. (Parasuraman et.al.1988)

2.2 What is a banking service?

Banking service means each and any of the following bank services provided to the borrower or
any subsidiary by any lender or any of its affiliates. (a) credit cards for commercial customers
(including, without limitation, commercial credit cards), (b) stored value cards and (c) treasury
management services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository network services)
(Hoehle and Huff,2012).

2.2.1 Types of banking service

A bank’s job is to provide customers with financial services that help people better manage their
lives. As technology advances and competition increases, banks are offering different types of
services to stay current and attract customers. There are different types of business banking.
These are:

 Individual Banking- Banks typically offer a variety of services to assist individuals in

managing their finances, including: checking accounts, savings accounts, debit and credit
cards, insurance, wealth management.
 Business Banking- Most banks offer financial services for business owners who need to
differentiate professional and personal finances. Different types of business banking
services include: business loans, checking accounts, debit and credit cards, merchant

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 services(credit card processing, reconciliation and reporting, check collection), and
treasury services( payroll services, deposit services, etc.)
 Digital bank-The ability to manage your finances online from your computer, tablet, or
smartphone is becoming more and more important to consumers. Banks will typically
offer digital banking services that include: online, mobile, and tablet banking, mobile
check deposit, text alerts, and online bill pay
 Loans- Loans are a common banking service offered, and they come in all shapes and
sizes. Some common types of loans that banks provide include: personal loans, home
equity loans, home equity lines of credit, home loans, and business loans.

2.2.2 Characteristics of banking services

The universalization of banking activities, increased competition among banks and need for
additional revenues associated with the introduction and development of banking services. The
characteristics of banking services are the following:

 To provide banking services to banks, usually, do not need additional resources;

 Most of the revenue from providing services the banks receive in the form of
commission;
 When providing services to banking aimed at making legal and factual actions that are
not directly linked to material consequences.

2.3 Dimensions of Banking Services

There are five major dimensions of banking service. These dimensions include:

 Tangibility: physical facilities, tools, machines, personnel, materials and communication

channels.
 Trustworthiness: the ability to provide promised services in a proper and reliable way.
 Accountability: to have the interest in providing appropriate service and generally
helping customers.
 Reliability: knowledge and polite personnel and their ability to win customers trust and
confidence.
 Sympathy: taking care and paying attention to individuals.

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2.4 E-banking

E-banking is the modern topic in the era of science and technology through e-banking started in
1980s but the revolution has taken place in 20thcentury. Since the e-banking concept is flourished
with populous model, theory and practical concept (like innovation technology acceptance,
affluence in internet business). So before going to discuss any core content of e-banking, it is
good to memorize the fundamental concept of-banking helps to realize basic concept of e-
banking. (.Davis et al., (1996)

Electro banking is an umbrella term for the process by which a customer may perform banking
transaction electronically without visiting a brick and perform mortar institution. Therefore
transactions related to bank activities via electronic mean and medium is called electro banking.

E-banking classification

1. Telephone banking (the oldest & poorest one).

2. Internet banking (or online banking)
3. Mobile banking (including SMS banking)
a. Telephone banking:- is a service provided by a financial institution that enables
customers of the financial institution to perform financial transactions over the
telephone without the need to visit a banking branch of ATM
b. Online banking (internet banking):- allows customer of a financial institution to
conduct financial transaction on a secure website operated by the institution which
can be a retail or virtual bank, credit union or society.
c. Mobile banking (also known as M-banking) : a term used for performing balance
checks, account transaction, payments, credit application and other banking
transactions through a mobile device such as a mobile phone or personal Digital
Assistance (PDA). (Roma Krishnan and Venkoba Roq 2006).

2.5 Automated Teller Machine

Automated Teller Machine (ATM) has emerged as a major channel for routing banking service
to customers. Al-Hawari et al,(2006) argue that firms would reap benefits such as cost savings
efficiency, greater consumer involvement, customer satisfaction and loyalty and improved

15
financial performance if they provide quality electronic banking channels. Pantouvakis (2010)
asserts that the measurement of SQ is a major issue facing service firms and as a result search
into how customers perceive and evaluate the quality of these electronic portals is still ongoing
(Parasurama et al,2005; Loon am and O’Loughlin, 2008; Chong et al ,2010). As different
technologies might influence customer’s perception of service quality (SQ) in different ways,
Joseph et al (1999) and Curran and Muter, (2005) postulate that consumer perception of SQ
based on the different technologies. In response to this, most scholar have focused on the
dimensions of internet banking quality (Loon am and O’Loughlin, 2008; Ho and Lin, 2010;
Chong et al, 2010)but there is almost no comprehensive conceptualization of ATM SQ,
prompting Khan (2010) to call for further studies on the dimension of ATM service quality. It
has also been proposed that customer perceived satisfaction is an essential of success in the
technology based delivery channels (Tong, 2009).

Recent advances in technology have created a surge in “tech-based self-service” (Dabholkar et al

2003, Richard 1). The changing business environment offers challenges and opportunities to the
organizations. The changing customers’ perception of quality poses unique challenge. Excellence
in quality has become an imperative for organizational sustainability. The developments of
technologies have enabled motion experience organizations to provide superior service for
customers’ satisfaction. (Surjadajaja et al.cited at khan, 2010). Banks are increasing their
technology based on service option to remain competitive .The ATM is an innovation service
delivery mode that offers diversified financial service like cash withdrawal, fund transfer ,cash
deposits ,payment of utility and credit card bills, cheque book requests and other financial
enquiries khan (2010) .Oliver defined customer satisfaction ,as “satisfaction is the customer’s
fulfilled response .it is a that a product or service itself provides a pleasurable level of
consumption –related fulfillment that”. Yak (1992) stated, customer satisfaction is a collective
outcome of perception, evaluation and psychological reaction to the consumption experience
with a product .Davis et al .,(1996) examined the factor that influence customer satisfaction on
ATM service include costs involved and efficient functioning of ATM. Anderson et al (1976)
and Larches (1988), the researchers of customer satisfaction said that the bank’s ability to deliver
the factors like convenience and accessibility will probably impact on customer satisfaction.
Moutinho (1992) as cited in Pahwa and Sexana (2011) stated that ATM is the abbreviation of
automated teller machine which acts as a teller in a bank who takes and gives money over the

16
counter and it was the first well known machines, banks are able to serve customers outside the
banking hall because ATMs are placed inside or near the banks and outside the banks such as
shopping malls, restaurants, airports or any place that people may gather.

Islam et al, (2005) assesses the satisfaction level of ATM card holders of a leading bank (HBSC)
in Bangladesh. The study found significant relationship of ATM service with customers’
satisfaction the study identified that location, personnel response, quality of currency notes,
promptness of card delivery and performance of ATM were positively related to customer
satisfaction. The security, frequent breakdown of machine, and insufficient number of ATM
were major contributors of customers’ dissatisfaction. In another study in Bangladesh,
Shamsdouha et al, (2005) citied by Islam found that 24hrs service, accuracy, and convenient
locations were the main predictors of customer satisfaction. The study also indicated lack of
privacy in executing the transaction, fear of safety and complexity of the machine were the major
cause of concern for customers. Rugimbana and Iverson (1994) that is cited on Khan studied the
perceived attributes of ATM service quality and their marketing implication. They found that
convenience, reliability and ease of use are important aspects, where complexity and unreliability
(risk) were causes of dissatisfaction. Lebanc (1990), in a study of ATM users in Canada,
established the major reasons for using ATM were accessibility, freedom to do banking at all
times, and to avoid waiting lines. The study also found the users’ apprehension about the risk
associated with its use and complexity of the machine in executing the transaction.

Literature provides support to the idea that pleasant experience of automated service provides
enhanced value to the customers and attracted them to undertake improved business with their
banks (Zuh et al, 2005). Simultaneously, the researchers have concluded that technology-based
services are likely to give sense of incompetence of customers, isolate them, and increase
passiveness. In addition, the pattern of adoption of technology and its use may differ across
organizations and cultures (Phillips et al 1994, How croft 1991) noted that dissatisfaction among
customers is associated with frequent interruptions and breakdown of ATMs. Intense
competition and technology-based new services are shaping customers loyalty. These have
resulted into switching of banks by customers based on competitive service (Lewis and
Bingham, 1991). Khan (2010) cited Miller (1993) reported that location of ATMs, increasing
number of ATMs, and diversified service offering are associated with switching of banks.

17
2.6 Core banking Service and Customer Satisfaction
Due to an increasingly competitive, saturated and dynamic business environment, retail banks in
many countries have adopted customer-driven philosophies to address the rapid and changing
needs of their customers (Burnham, T. A., Frels, and J. And Vijay, M. 2003).
Technological advances have changed the world radically, altering the manner in which
individuals conduct their personal and business affairs.
Over the past two decades in particular, the banking industry has invested substantial resources
in bringing ICT to customers. The banking industry is undergoing through the significant
technological changes; it has several impacts on customer satisfaction and loyalty. It has
revolutionized every industry includin g banking in the world by rendering faster and cost
effective delivery of products and services to the customers (Walker et al., 2008).
According to Chakrabarty, (2007) core banking solution enables banks to extend the full benefits
of ATM, tele-banking, mobile banking, internet banking, card banking and other multiple
delivery channels to all customers allowing banks to offer a multitude of customer-centric
services on a 24x7 basis from a single location, supporting retail as well as corporate banking
activities.
Banks in Ethiopia are using Information Technology (IT) not only to improve their own internal
processes but also to increase, facilities and to provide quality services to their customers.
Particularly, in the banking sector ICT is one of the most important tools, because it provides
many suitable alternative banking channels to the customers. It brings connivance, customer
centricity, enhance service quality and cost effectiveness in the banking services (Vijay M.
Kumbhar 2012). Even now, customers are evaluating their banks based on availability of high-
tech services. Therefore, implementation of ICT in the banking business continues to improve
the banking service.
The researchers in order to conduct this research in addition to giving quality service to employs
there are some additional factors to evaluate the performances of core banking services in the
bank. Those factors include the followings:
A. Reducing risks and errors
The security issue is of special concern in the Banking Industry, as banking is highly based on
trust from its customers.

18
Hence, the risk of hackers, denial of service attacks, technological failures, breach of privacy of
customer information, and opportunities for fraud created by the anonymity of the parties to
electronic transactions all have to be managed. Depending upon its nature and scope, a breach in
security can seriously damage public confidence in the stability of a financial institution or of a
nation's entire banking system. Hence, by introducing the appropriate security measures and
putting security concerns at ease, the Banking Industry might be able to attract the segments
among consumers who previously were not inclined to use core banking. Furthermore, it is also
in the banks’ own interest to improve security, as digital fraud can be costly both in financial
losses, and in terms of the damage it does to the brand of the bank in question (Broderick
&Vachirapornpuc, 2002).
B. Accessibility
Rapid advancement in information and communication technology (ICT) has had a profound
effect on the banking industry and the wider financial sector over the last 2 decades.
ICT is now a tool that facilitates the banks’ organizational structures’ business strategies &
customer services. It enables sophisticated product development, better market infrastructure,
implementation of reliable techniques for control of risk and helps the financial intermediaries to
reach geographically distant and diversified markets. Hence, the uses of core banking in
commercial bank of Ethiopia are making its services that can be accessed easily. For instances,
VISA card can facilitates you to make a purchase goods and services at an automated teller
station that is set up to handle such transactions. Core banking helps to promote customer
retention, convenience and satisfaction for customer in which the bank mightn’t be got without
the use.
C. Speed
Transactions are also faster in banks via core banking. Core banking makes transactions faster
through dissemination of required information or data at a quicker and faster rate.
The Banking Industry is currently being renewed in many areas. One of these areas related to the
digitalization of formerly paper-based processes. Electronic mail is increasingly being applied
for especially non-legal correspondence like account statements, marketing and sales. On the
other hand, the introduction of ICT increases efficiency of the employee in the bank (Kulkarni K,
Kalkundrikar S., 2002).

19
Core banking can be used to enhance customer service delivery, which could also pave the way
for the reduction of the workload on tellers in banking halls. Such workload reduction could
provide the tellers with opportunities for adequate interaction with customer and also help
improve their functional efficiencies and effectiveness in customer service delivery. Therefore
improving the service quality of the banking with the core banking could improve the overall
customer perception of the banks functional suitability for service provision as rendered by
tellers in the banking halls (Biju. et. al 2012).
D. Satisfactory customer service delivery
The ability of most banks in Ethiopia to deliver effective and satisfactory services to their clients
remains a challenge as a result of the continued use of traditional approaches in the delivery of
banking services. In this regard, such banks were faced with a situation where the functions of
their employees and the traditional service delivery functions they offered were no longer their
first interest. Instead such banks are increasingly depending on technology with their attendant
quality issues (Charles 2006). In bids to overcome this challenge, most of these banks have
moved away from using traditional approaches in customer service delivery and have introduced
information and communication technologies in their place to enable effective and satisfactory
customer service delivery.
Thus, the proliferation of new core banking application within the financial industry has
significantly influenced the way banks deliver services to their clients. Such technologies have
enabled banks in developed economies to provide satisfactory customer services by enhancing
their capacities to develop sophisticated products, design better market infrastructure, and
implement reliable techniques for controlling risks. A semblance of this influence is highlighted
by the introduction of self-service technologies that have enabled banks to develop electronically
mediated multi-channel service delivery platforms for clients. These platforms, which include
the ATMs, core banking, telephone banking, Internet banking, and mobile banking, are efficient
means for selling products and servicing customers. In this wise, the banking industry in Ethiopia
has experienced rapid legal and technological change (Grönroos 2000).
Among the many changes is the introduction of money counting machines and automated teller
machines (ATM) to reduce workload and meet customer demands and the implementation of
core banking solution to make the service flexible and fast (Vijay M. Kumbhar 2012).

20
2.7 Customer Satisfaction
Early concepts of satisfaction have typically defined satisfaction as a post utility evaluation and
judgment concerning a specific purchase decision (Churchill and Sauprenant 1992; Oliver,
1980). Most researchers agree that satisfaction is an attitude or evaluation that is formed by the
customer by comparing what they expect to receive to their subjective perceptions of the
performance they actually get (Oliver, 1980).
Several authors have defined customer satisfaction in various ways:
According to Kotler (2000), satisfaction is a person’s feeling of pleasure or disappointment
resulting from comparing a product’s perceived performance (or outcome) in relation to his or
her expectation.
Gaither (1994) defines customer satisfaction as the determination of customer requirements and
demonstrated success in meeting them.
Kotler (2006) again defined customer satisfaction by giving details on the attributes of a highly
satisfied customer. According to him, a highly satisfied customer stays loyal, longer, and buys
more as the company introduces new products and upgrades existing products; talks favorably
about the company and its products, pays less attention to competing brands and is less sensitive
to price, offers service or product ideas to the company and costs less to serve him than new
customers because transactions are routine.
Kotler and Armstrong (2001) in their Principles of Marketing, define customer satisfaction as the
extent to which a product’s perceived performance matches a buyer’s expectations. They
continued that, if the product’s performance falls short of expectations, the buyer would be
dissatisfied but if performance matches or exceeds expectation, the customer will be satisfied or
highly satisfied. In service quality literature , customer expectations are understood as desires or
wants of consumers (Zeithaml, berry &Parasuraman 1993) or “what they feel the service
provider should offer rather than would offer” (Parasuraman et al., 1988). Customer perceptions
are defined as “the customer’s judgment of the service organization’s performance”
(Parasuraman et al., 1988).
Customer satisfaction is a “psychological concept that involves the feeling of wellbeing and
pleasure that results from obtaining what one hopes for and expects from an appealing product
and/or service” (WTO, 1985);

21
“Satisfaction is a person’s feeling of pleasure or disappointment resulting from comparing a
product’s performance (outcome) in relation to his or her expectation.”
(Kotler& Keller, 2006 p. 144).
Again, CS may be described as a process or an outcome. One area that has received considerable
debate in customer satisfaction literature is whether customer satisfaction should be defined as an
outcome or a process. Many early definitions conceptualized satisfaction as a process which is
currently the dominant view held by most scholars (Oliver, 1980, Parasuraman et al., 1988).
The process perspective presupposes that customer satisfaction is a feeling of satisfaction that
results from the process of comparing perceived performance and one or more predictive
standards, such as expectations or desires (Khalifa& Liu, 2002).
The customer is satisfied if the performance of product/service is equal to his/her expectations
and he/she is dissatisfied if the product/service performance is perceived to be below his/her
expectation (negative disconfirmation). If expectation exceeds perceived performance, the
customer is highly satisfied.
By taking satisfaction as a process these definitions do not focus on satisfaction itself but things
that cause satisfaction, the antecedents to satisfaction, which occur primarily during the service
delivery process (Vavra, 1997).
Recent studies have found that satisfaction as an outcome or end result during the process of the
consumption of a service; it is viewed as a post-purchase experience (Vavra, 1997).
This view has its roots in motivation theories that postulate that people are driven by the desire to
satisfy their needs (Maslow, 1954) or that their behavior is directed at the achievement of
relevant goals (Vroom, 1964). In this way satisfaction is perceived as a goal to be achieved and
can be described as consumer fulfillment response (Rust & Oliver, 1994). In the context of this
study, customer satisfaction is defined from process perspective because the researcher believe
that in core banking arena, customers’ evaluation of core banking service quality takes place
primarily during the service delivery process and continues, but not just an outcome that
customers strive to achieve.

2.8 Factors that cause Customer Satisfaction

A customer satisfaction is an ambiguous and abstract concept. Actual manifestation of the state
of satisfaction will vary from person to person, product to product and service to service. The

22
state of satisfaction depends on a number of factors which consolidate as psychological,
economic and physical factors.
The quality of service is one of the major determinants of the customer satisfaction, which can be
enhanced by using ICT available to survive (Vijay M. K. 2012).
Several factors affect customer satisfaction. The kinds of products that banks offer to its
customers can cause customer satisfaction or dissatisfaction. Consumers do not buy a product or
service for its own sake. They buy to acquire benefits that the product offers.
They buy to satisfy a need. Products therefore exist for what they fulfill in terms of consumer
needs. It is the essential feature or benefit that the buyer expects to receive from using the
product that motivates buying behavior (Boateng, 1994).
The service delivery processalso plays a key role in customer satisfaction. When the process of
service delivery is too long, it lengthens customer waiting time.
According to (Sasraku, 2007), the physical evidence also plays a role in customer satisfaction.
The physical evidence includes the edifice or buildings and its decorations, an imposing banking
hall with comfortable seats, places of conveniences, etc. The office or building and its external
and internal decorations can satisfy a customer. The customer can pride him or herself as
customer of that bank.
Another service element that causes customer satisfaction or dissatisfaction is the people or the
employees delivering the product or service (Covey, 2004). The employee’s occupy the first
point of contact with the customer. Employee behaviors are therefore important to customers. If
the employee is cold or rude the customer takes it as a measure of the state of the company.
Unhappy employees will have difficulty in keeping customers happy (Dei-Tumi, 2005).
Also, easy access to the bank premise would make a customer feel happy in transacting business
with a bank, for example, if the bank premise is located on a high street.
However, the nice edifice of a banking hall will not be noticeable if customer service is poor and
there are unnecessary delays and lack of personal support from staff (Sasraku, 2007).
The technology being used by the banking service delivery could be a source of satisfaction to
customers. When electronic devices like computers are used, they tend to speed up the
processing time of transactions. System and processes solely do no create satisfaction.Service
system quality, behavioral service quality, service transaction accuracy and machine service
quality are necessary to make the technology in use worthwhile (Aldlaigan&Buttle, 2002).

23
Furthermore, the security of customers and their deposits is an area of concern to customers.
When customers are assured of protection from external threats they feel secured and happy.
For example, if a bank is situated at a place noted for criminal activities, customers are scared
and dissatisfied (Sasraku, 2007). Of course the internal security is equally important to customer
who will want to deal with personnel with integrity and good moral values especially, the
financial institutions (Lovelock & Wirtzn.d 2007).

2.9 Customer Satisfaction in Banking Services

In contrast to products, customers are not really able to evaluate services before the service
process takes place. The interaction with the service provider and the customers, the so called
service encounter, is the key in the evaluation of service performance (Gil, 2008). During these
encounters, the customer is able to get an impression of the way the company provides its
services. His/her service experience is defined by the interaction with the organization, the
processes and the employees.
Accordingly, customer satisfaction is built upon the basis of service encounters. Service
providers have significant opportunities to manage the interactions that together form the
experience (Wirtz, 1994). They can design and the interactive production process; select, train
and manage service employees; design and maintain the service environment; selectively target,
socialize and educate customers.

24
 CHAPTER THREE

DATA ANALYSIS, PRESENTATION AND INTERPERITATION

This chapter deals with data analysis discussion and presentation. The data were collected from
the customers of Commercial Bank of Ethiopia in 22 Mazoria Branch through questionnaire and
interview. Although 50 questionnaires were distributed as stated in the research proposal, 45
were completed and returned during the data collection but the five questionnaires was
incomplete. The data was analyzed using descriptive approach.

3.1 Profile of the respondents

Table 1 : 3.2 Age, sex and education status

Question Alternative No of respondent Percentage

1. Sex A. Male 33 73.3%

B. Female 12 26..7%

Total 45 100%
2. Age 18-25 30 66.7%
26-40 12 26.7%
41-60 2 4.4%
>60 1 2.2%
Total 45 100%
3. Education Diploma 8 17.8%
background Degree 36 80%
Master and above 1 2.2%
Total 45 100%
Source: Customers of the Bank survey (2009 E.C)

According to table 3.1 item number one presents that the background information of the
respondents of the study showed that there were 33(73.3%)malesand12 (26.7%) females.
Therefore, Most of the respondents were males.

25
As far as age of respondents is concerned, 30(66.7%) of the respondents are in the range of 18-
25 years, 12(26.7%) of the respondents are in the range of 26-40 years, 2(4.4%) are in the range
of 41-60 years, and 1(2.2%) of the respondents are above age 60. Therefore most of the
customers are under the age of 18-25 years.

With regard to educational level of respondents 8(17.8%) are diploma holders, 36(80%) of the
respondents are degree holders, 1(2.2%) of the respondents are master and above. As a result,
most of the respondents or customers are degree holders.

3.4 Factors affecting ATM system

Note: SA- Strongly Agree, A- Agree, DA- Disagree, N- Neutral, SD- Strongly Disagree

Table 2: 3.2 Technological and Environmental factors

The following are some barriers Strongly Agree Neutral Dis agree Strongly
the company faces, when adopting Agree Dis
ATM system, please indicate level Agree
of your choice.
I. Technological factors No % No % No % No % N %
(Perceived risk) o
1. Customers of our bank fear risk to 14 31.1. 14 31.1 3 6.7 11 24.4 3 6.7
use automated teller
machine(ATM)

2. In the case of using ATM security 8 17.8 18 40 5 11.1 10 22.2 4 8.9

risk affect their decision to use the
system

3. Customers do not trust the 8 17.8 10 22.2 7 15.6 16 35.5 4 8.9

technology provided by the banks

4. Lack of skills to implement ATM 12 26.7 10 22.2 10 22.2 8 17.8 5 11.

service 1

26
 II. Environmental factors
5. Lack of available ICT 22 48.9 11 24.4 4 8.9 4 8.9 4 8.9
infrastructure

6. ATM services may not perform 10 44.4 18 40 5 11.1 1 2.2 2 4.4

well because of network problems

7. Lack of legal frame works that 9 20 16 35.5 10 22.2 7 15.5 3 6.8

enforce banking industries to
adopt technological innovation

8. Lack of competition among local 11 24.4 12 26.7 10 22.2 7 15.6 5 11.

bank and foreign banks 1

9. Customers may not willing to 4 8.9 13 28.9 9 20 12 26.7 7 15.

accept ATM service 5

Source: Customers of the Bank survey (2009E.C)

3.2 Barriers of adopting E-banking system in Ethiopia

Although there are many associated benefits with the adoption of E-banking, there are many
reasons which obstruct implementation of the system. In case of Ethiopian banking industries,
many private banks still using old banking system and don’t have access to take advantage from
electronic banking facilities. Wondwossen & Tsegai (2005) observed the following reasons
which may be considered as hindrance factors for the use of electronic payment system in
Ethiopia. These hindrance factors include, lack of appropriate infrastructure for E-payment, lack
of internet facilities with customer and learning how to interact with bank website. Moreover,
factors that can affect adoption of E-banking in the country regarding the technological factor,
organizational factor and Environmental factor were analyzed in the following sections.

3.2.1. Technological factor

The issues raised in this study in relation with technological factor are the relative advantages
(perceived benefit) the firm gained from adoption of E-banking system and the relative

27
disadvantages (perceived risk) which hinder banking industries from the adoption of new
technological innovations.

3.2.1.1. Perceived Risk

One of the basic barrier a firm faces, while adopting technological innovation is the perceived
risks. For example, the study of So hail and Shanmugham (2003) suggests that one of the barriers
in the adoption of electronic banking is fear of security risks.

These were also supported by the survey result shown on the above table 3.2, The result
presented in the above table shows that, the respondents asked whether customers of banks fear
risk to use ATM, the largest number of respondent were agreed on the issue, therefore fear of
risk is one of the factor that hinder adoption of E-banking system in the country.

Similarly the result shown on the above table revealed that lack of confidence with the security
issue is considered as barrier for the adoption of E-banking system, in which all indicated that,
technological barriers, such as security risk as hindrance factor for the adoption of E-banking.

Also the result shown on the above table indicated that lack of trust on the use of technological
facility provided by bank is another factor that can hinder adoption of technological innovation
by CBE in 22 Mazoria branch. Large number of respondents disagree on the Customers do not
trust the technology provided by the banks. Lack of skill is also another factor that affect to
implement ATM service in the above table most of the respondents said that they agree lack of
skill is another factor for implement ATM service.

3.2.2 Environmental Factor

Another factor which can affect the adoption of technological innovation in banking industry is
an external environment: in this study four basic environmental factors are considered, these are
legal frame works, national ICT infrastructure, competitive pressure and government support.
The result obtained from survey.

3.2.2.1 Lack of adequate ICT infrastructure

Despite the recent improvements made by Ethiopian government on the national infrastructure,
the overall ICT infrastructure in Ethiopia remains inadequate. Card-based payment systems in
Ethiopia have been growing fast in recent years. Commercial banks in Ethiopia cited plans to use

28
new technologies for remittance transfers, including mobile-phone transfers and remittance-
linked financial products such as prepaid cards. However, significant challenges to these plans
include, lack of adequate financial and telecommunications infrastructure for the new
technologies (Alemayehu& Jacqueline 2011). Similarly the study of Wondwossen and Tsegai
(2005) stated that lack of sufficient telecommunication infrastructure is one of the basic
challenges in the development of E-payment in Ethiopia. More over the questionnaire result in
this study presents four questions to examine the perception of bank staff on the issue.
According to the above table 3.2 item number 5 most of the respondents 13(28%) strongly agree
and13 (28%) are agreed on the Lack of available ICT infrastructure.

According to the above table 3.2 item number 6 most of the respondents agreed that ATM
services may not perform well because of network problems.

3.2.2.2 Lack of Legal and Regulatory Framework

Electronic payments are not currently covered in Ethiopian legal system. Lack of such legal
framework may thus hinder the introduction of cost effective modern electronic payment
instrument such as ATMs, credit and debit cards, mobile/telephone/internet banking. Other
policy initiative which is currently under consideration is the development of securities market,
particularly, that of long term debt instruments (Getahun 2008). Similarly the study of
Gardachew (2010) revealed that lack of legal frame work is one of the challenges for E-banking
system in Ethiopia. In contrary the study of Wondwossen and Tiega (2005) revealed that an
adequate legal structure and security framework could encourage the use of E-payments in
Ethiopia. However, the result of survey presented in table 3.2 about legal frame work on
implementation of E-banking system revealed that lack of legal frame works and cross country
legal and regulatory difference is considered as barriers faced by banking industries for the
adoption of E-banking system in Ethiopia.

According to the above table 3.2 item number 7 most of the respondents are agreed on the Lack
of legal frame works that enforce banking industries to adopt technological innovation.

3.2.2.2 Lack of Competition

As it is stated in different E-banking literature, competitive pressure is considered as driver for
the adoption of E-banking in developed country. For example, the study of Laforet& Lu (2005)

29
and Salwani (2009) suggests that, the foreign funded banks are more competitive in securing
corporate clients over the Chinese banks because they are perceived to offer better services and
more stringent security measures given their longer experience in E-banking development.
However, lack of competition in Ethiopia among local and foreign bank hinders Ethiopian
banking industries to adopt E-banking system. Respondents were asked whether lack of
competition among local and foreign banks influence adoption of E-banking and the result
obtained from survey is shown on the above table. According to the above table 3.2 item number
8 most of the respondents are agreed that Lack of competition among local bank and foreign
banks.

According to the above table 3.2 item number 9 most of the respondents agreed that customers
are willing to accept ATM service.
Questionnaires related with the drivers of adopting ATM system in 22 Mazoria branch.
Table 3: 3.3 the drivers of adopting ATM system

The following are some of the Strongly Agree Neutral Dis agree Strongly
perceived benefits the company Agree Dis
derived from the adoption of ATM Agree
system, please indicate your choice.
1 2 3 4 5

IV. Perceived Ease of Use No % No % No % No % No %

1 ATM makes it easier for me to do 22 48.9 15 33.3 2 4.4 3 6.7 3 6.7
banking activities
2 Using ATM simplify the activity of 19 42.2 16 35.6 4 8.9 3 6.7 3 6.6
workers to deliver
3 Our bank provide guidelines on the 11 24.4 14 31.1 9 20 7 15.6 4 8.9
use of electronic banking facility
Source: Customers of the Bank survey (2009 E.C)

3.3 Perceived benefits/Drivers of adopting E- banking system in Ethiopian

banking industry
An advantage that is expected to be gained from the adoption of E-banking covers both direct
and indirect benefits for the banking industries. Direct benefits include savings on operational
30
cost, improved organizational functionality, productivity gain, improved efficiency, saving of
time and increased profitability. Indirect benefits include the opportunity or intangible benefits
such as improved customer’s satisfaction through improved services, improved banking
experience and fulfillment of their changing needs and lifestyle (Lu 2005; Kuan 2001 &Iacouou
1995).
Perceived benefit of adopting E-banking system considered in this study were classified based on
technology acceptance model (TAM), as perceived ease of use (PEU) and perceived usefulness
(PU). PU was classified in terms of time and cost saving. Also other benefits beyond cost and
time saving were analyzed at the end.

In order to access online banking services, it is important that bank should have ICT
infrastructure and internet facility available to facilitate their customers with all kinds of online
banking services. Pikkarainen et al. (2004) argued that bank must have an official website which
facilitates customers to perform all kinds of online transaction so that, It saves customer cost and
time as adopting E-banking system. Customer can make transactions from their home.
Polatogluet al. (2001) suggests many benefits associated with online banking. Customer can pay
their bills, can pay their loans, credit and debit card facilities. In other words it provides freedom
from location, saves time and cost.

3.3.1 Perceived ease of use

 One of the basic benefits related with the use of E-banking system is the perceived ease
of use. Giglio((2002) suggests that adopting online banking services reduce the workload
over the banking staff and it’s easy to have more satisfied customers. On the other hand
Robinson (2000) indicated that online banking provides convenience not only to bank
and also to customers. The data obtained from the survey in this study also confirms the
finding of Giglio (2000) and Robinson (2000).
The results were shown in the above table 3.3 item number 1 most of the respondents 22(48.8%)
were strongly agreed and 15(33.3%) were agreed on ATM services makes for me to do banking
activities easier.
According the above table 3.3 item number 2 most of the respondents19 (42.2%) were strongly
agreed and 16(35.6%) were agreed on Using ATM simplifies the activity of workers to deliver
money.

31
 According above the above table 3.3 item number 3 most of the respondents11 (24.4 %) were
strongly agreed and 14(31.1 %) was agreed on the bank provides guidelines on the use of
electronic banking facility.

CUSTOMER SATISFACTION QUESTIONNAIRE (CSQ)

This part deals about Customer satisfaction, Please rank your views using 1-5 on whether you are
satisfied or not with the service provided by the bank and the general environment under which it
operates
1=very dissatisfied 2=dissatisfied 3=indifferent 4=satisfied 5=very satisfy
Table 4: 3.4 Customer Satisfaction Questionnaires

s.n Item Scale

Very dissatisfied Indifferent Satisfied Very

dissatisfied satisfied

1 2 3 4 5
1 I am satisfied with the bank’s 10 22.2 7 15.6 8 17.8 15 33.3 5 11.1
complete range of services.
2 I am satisfied with the 8 17.8 10 22.2 3 6.7 17 37.8 7 15.5
performance of the employees
of this bank.
3 I am satisfied of being a client 9 20 4 8.9 11 24.4 17 37.8 4 8.9
of this bank.
4 I am satisfied with the bank 9 20 4 8.9 13 28.9 17 37.8 2 4.4
employees’ professional
competence
5 I am satisfied with the quick 12 26.6 4 8.8 8 17.7 18 40 3 6.7
service of this bank.
6 I am satisfied with the 10 22.2 7 15.6 3 6.7 19 42.2 6 13.3
respectful behavior of
employees.

7 General Satisfaction towards 4 8.9 9 20 5 11.1 20 44.4 7 15.6

core banking
Source: Customers of the Bank survey (2009 E.C)

32
According to the above table 3.4 item number 1, the level of customers’ satisfaction to the
complete range of services indicates that majority 15(33.3%) of the respondents are satisfied,
5(11.1%) of the respondents are strongly satisfied, 8(17.8%) percent of the respondents are
neither satisfied nor dissatisfied, 7(15.6%) of the respondents are dissatisfied and 10(22.2%) of
the respondents are strongly dissatisfied with the bank’s complete range of services. The bank
should try to enhance the satisfaction level of entire customers in relation to the complete ranges
of its services.

As shown in the above Table 3.4 item number 2 the level of customers’ satisfaction to
performance of the employees the result implies that majority17 (37.8%) of the respondents are
satisfied, 7(15.5%) of the respondents are strongly satisfied, 3(6.7%) of the respondents are
neither satisfied nor dissatisfied, 10(22.2%) of the respondents are strongly dissatisfied and
8(17.8%) of the respondents are dissatisfied. Certainly, most customers of the bank are satisfied
in employee performance; but the bank should maintain this situation and work more and more
to create better satisfaction to entire customers.

As shown in the above Table 3.4 item number 3 majority 17(3.87%) of the respondents are
satisfied, 4(8.9%) of the respondents are strongly satisfied,11(24.4.9%) of the respondents are
neither satisfied nor dissatisfied, 4(8.9%) of the respondents are dissatisfied and 9(20%) of the
respondents are strongly dissatisfied of being a client of this bank. From the above analysis most
customers are satisfied by being a client of the bank and significant. So that, the bank should
make an endeavor to create a sense of belonging in the minds of customers.

According to the above table 3.4 item number 4 shows majority 17(37.8%) of the respondents
are satisfied, 2(4.4%) of the respondents are strongly satisfied, 13(28.9%) of the respondents are
neither satisfied nor dissatisfied, 4(8.9%) of the respondents are dissatisfied and 9(20%) of the
respondents are strongly dissatisfied with the bank employees’ professional competence. Even
though most of the bank customers are highly satisfied with professional competence of
employee, the bank should give further improvement in order to highly satisfied specially those
who dissatisfied.

Based on the survey above table 3.4 item number 5 shows information regarding quick services
of the bank. Accordingly majority 18(40%) of the respondents are satisfied, 3(6.7%) percent of

33
the respondents are strongly satisfied, 8(17.7%) of the respondents are neither satisfied nor
Dissatisfied 4(8.8%) of the respondents are dissatisfied and12 (26.6%) of the respondents are
strongly dissatisfied with the quick service of this bank. With this aspect the bank should also
improve speed of the services to address those who are not satisfied.

According to the above table 3.4 item number 6 shows majority 19(42.2%) of the respondents
are satisfied, 6(13.3%) of the respondents are strongly satisfied, 3(67%) of the respondents are
neither satisfied nor dissatisfied 7(15.6.4%) of the respondents are dissatisfied and 10(22.2%) of
the respondents are strongly dissatisfy with the respectful behavior of employees. According to
the above table 3.4 item number 7 shows majority 20(44%) of respondents was satisfied towards
the general sati faction of the bank. Therefore, the bank should maintain its loyalty.

34
 CHAPTER FOUR
SUMMARY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS
This study examines the level of customer satisfaction in ATM service in the case of
Commercial Bank of Ethiopia at 22 mazoria Branch. The data were obtained through
questionnaire from customers of the bank and Interview for managers of the Bank. The purpose
of this chapter is to delineate conclusion and offerings some recommendations.

4.1 Summary of findings

Generally the customer respondents are diversified in gender, age and educational background.
Thus, based on the findings, regarding to gender 33(73.3%) of the customer respondents were
male and 12(26.7%) were females, due to age 30(66.7%) of the customer respondents found
between 18-25 and 12(26.7%) of them were found between 26-40, regarding to educational
background majority of 36(80%) of the customers respondents have a BA degree.

According the findings the total customer respondents14 (31.1%) of them were those who said
that they were affected by security risk to get the system.

Most ofthe18 (40%) customers were those who said that ATM service may not perform well because of
network problem.

Regarding to perceived ease of uses most of the customers 16(35.5%) of the bank those who said
that ATM makes easier for use to-do banking activities.

Based on the survey Majority of 15(35.3%) of the respondents are satisfied with the banks
complete range of service. According to the finding most of 18(40%) respondents were satisfied
with the quick service of the bank and19 (42.2%) of the customers were satisfied by the respect
full behavior of employees of the bank.

4.2 Conclusion

35
The study intended to examine the main barriers and drivers in the ATM service in CBE, this
study has identified a number of barriers and benefits/drivers for ATM service. The
technological barriers, identified in this study were security risk and lack of trust on the
technological innovation used by Bank. The finding identified under technological factor both of
them found that security risk is the major barrier for the adoption of E-banking system.
Most barriers to ATM adoption identified in this study came from the external environments;
which include: lack of legal framework regarding ATM system at national level, lack of ICT
infrastructure, and Absence of competition between local and foreign banks. Interestingly, lack
of Government support was not taken as barriers for the adoption of ATM in bank. Lack of
competition among local and foreign banks is also another challenge for the adoption of ATM in
the CBE. Technical and managerial skills available are also limited.
The study also identified basic benefit a firm could get from the adoption of ATM system. Those
benefits were considered as a driving force for the adoption of the system. The benefits were
classified based on technology acceptance model (TAM) as perceived ease of use and perceived
use fullness. Perceived ease of use is taken as a major benefit of using E-banking system.
The other benefits found in the study were based on its usefulness in terms of time and cost
saving. These are two basic benefits that drive banking industry to adopt technological
innovations. In general the finding of the study, offer other benefit for the adoption of ATM,
such as enhancing customer satisfaction, reduce the number of customers come to banking hall,
increase the productivity of banks, increase reliability and accessibility of banking service,
creating good relationship between clients & bank and also used as a better information control.

4.3. Recommendations
E-banking system is a new financial phenomenon in Ethiopia, but it is an important issue,
because it has a great impact on the whole banking system, at the same time it is difficult and
need a lot of efforts to be adopted and accepted by the banking industry, so it need a lot of efforts
to succeed. Based on the above conclusion, the researcher recommends the following points:
In order to successfully facilitate ATM service Bank needs to urgently establish a clear set of
legal frame works on the use of technological innovation in banking sector.

36
 For the successful implementation of ATM system ICT infrastructure, is a major prerequisite,
so government, should support banking sector by investing on ICT infrastructure
development.

 In order to survive, ATM need to move away from traditional bases of retail bank
competition to a new technology based form of competition by focusing on cost reduction,
customer retention, awareness, credibility, security, ease of use, and wider scope of products
and services.

 To exploit the benefit of ATM service, CBE needs to familiarize their customers with the
processes and benefits of the system.

 Banks should pay special attention to deliver service to customers by using ATM system,
which can easily be accessible.
 Using ATM Service, develop Customer relationship management the Bank to satisfy the
customers.

37
 REFERENCES

Aldlaigan, A.H. and Buttle, F.A. (2002), “SYSTRA-SQ: a new measure of bank service
quality”, International Journal of Service Industry Management, Vol. 13 No. 4, pp362-81.

Berry LL, Zeithaml VA, Parasuraman A (1990). Five imperatives for improving service
quality. Sloan Manage Rev, 31(4): 29-38.

Biju, K. Devandhiran, D. &Sreehari, R. (2012) Customers’ satisfaction on core banking: A

study with special reference to a nationalized bank in THIRUNELVELI. jrcm vol-3

Broderick, A.J. and Vac

hirapornpuk, S. (2002), “Service quality in Internet banking: the importance of the customer
role”, Market Intelligence and Planning, Vol. 20 No.6, pp.

Burnham, T. A., Frels, J. And Vijay, M. (2003), “Consumer Switching Costs: a Typology,
Antecedents and Consequences”, Journal of the Academy of Marketing Science, Vol. 31,
No.2, pp.109-126.

Chakrabarty S. Organizational culture of customer care: market orientation and service

quality. International Journal of Services and Standards, Vol. 3, No. 2, 2007

Charles Harvey. (2006) Banking Reform in Ethiopia Churchill, G.A. Jr

Covey, S. R. (2004). Seven habits of highly successful people. New York: Free Press

Dei-Tumi, E. (2005). Quality customer service is an attitude not a department (pp. 10. 15,

Grönroos C. (1978). “A Service Oriented Approach to Marketing of Services”, European

Journal of Marketing, 12, 8, 588 - 601.

38
Kotler, P. & Armstrong, G. (2001). Principles of marketing (pp.9-11) New Jersey: Prentice
Hall

Kotller and Keller (2006) ‘’Marketing management”, 12th Edition, prentice-Hall of India,

Kulkarni K, Kalkundrikar S (2012). Monetary Economics, Banking and International Trade.

R. Chand and Co. Publishers. New Delhi.

http//www.researchgate.net/publication/. Accessed Date 18 May 2019

http//article.sapub.org/. Accessed Date 18 May 2019

http//www.emeraldinsight.com/. Accessed Date 18 May 2019

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 APPENDIXES
Annex I

Unity University
College of Business, Economics and Social Science
Department of Marketing Management
The purpose of this questionnaire is to collect data for the Senior Essay in requirement for a
partial fulfillment of BA degree in Marketing Management of Unity University. The study aimed
at to assess the level of customer satisfaction in ATM service at CBE in 22 Mazoria Branch. I
would like to emphasis that your response are extremely valuable for the successful completion
of this study. I can assure you that the information you provide will be secretly kept and will not
be used for any other purpose.

Thank you very much in advance for your cooperation and for scarifying your precious time.

Instruction

 Give your answer for the question in the by placing ‘‘√’’ or ‘‘X’’ mark
 You are not allowed to write your name and sign a signature.
 Give your answer honestly.

 Give short and brief answer for the opened ended questions

Part I. Demographic characteristics of the respondents

1. Sex: A. Male  B. Female

2. Age: A. 18-25 B. 26-40 C. 41-60  D. 60 and above 

3. Educational level: Diploma holder First degree holder Master’s Degree and above
Part II: Questionnaires related with factors affecting ATM system
Instruction: Below are lists of statements pertaining to Adoption of ATM. Please indicate
whether you agree or disagree with each statement by ticking (√) on the spaces that specify your
choice from the options that range from ‟‟strongly agree‟ to „‟strongly disagree” Each choices
are identified by numbers ranged from 1 to 5.

40
Note: SA- Strongly Agree, A- Agree, DA- Disagree, N- Neutral, SD- Strongly Disagree

Questionnaires related with factors affecting ATM system

The following are some barriers the Strongl Agree Indifferent Dis agree Strongly Dis
company faces, when adopting ATM y (Neutral ) Agree
system, please indicate level of your Agree
choice.
1 2 3 4 5

I. Technological factors(Perceived
risk)
10. Customers of our bank fear risk to use
automated teller machine(ATM)
11. During the use of ATM security risk
affect users decision to use the
system

12. Customers do not trust the technology

provided by the banks
13. Lack of skills to implement ATM service

II. Environmental factors

14. Lack of available network

15. ATM services may not perform well

because of network problems
16. Lack of legal frame works that enforce
banking industries to adopt technological
innovation
17. Lack of competition among local bank
and foreign banks
18. Customers may not willing to accept
ATM service

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19. Is there any other factors? Please justify below.
______________________________________________________________________________
______________________________________________________________________________
____________________________________________________________________

Part III: Questionnaires related with the drivers of adopting ATM system in 22 mazoria
branch.

The following are some of the perceived benefits Strongly Agree Neutral Dis Strongly
the company derived from the adoption of ATM Agree agree Dis Agree
system, please indicate your choice.
1 2 3 4 5

IV. Perceived Ease of Use

1 ATM makes it easier for me to do banking

activities
2 Using ATM simplify the activity of workers to
deliver
3 Our bank provide guidelines on the use of
electronic banking facility

Part IV Customer satisfaction

Please rank your views using 1-5 on whether you are satisfied or not with the service provided
by the bank and the general environment under which it operates
1=very dissatisfied 2=dissatisfied 3=indifferent 4=satisfied 5=very satisfied

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CUSTOMER SATISFACTION QUESTIONNAIRE (CSQ)
s. Item Scale
n Very Dissatisfied indifferent satisfied Very
dissatisfied satisfied

1 2 3 4 5

1. I am satisfied with the bank’s

complete range of services.

2 I am satisfied with the

performance of the employees
of this bank.

3 I am satisfied of being a client

of this bank.

4 I am satisfied with the bank

employees’ professional
competence

5 I am satisfied with the quick

service of this bank.

6 I am satisfied with the

respectful behavior of
employees.
7 General Satisfaction towards
core banking

8. Is there any other factor that makes to be satisfied or dissatisfied?

a) Satisfied factors
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

43
 b) Dissatisfied factors
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
9. What you recommend to the bank for further improvements?
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

44
Annex II

Unity University
College of Business, Economics and Social Science
Department of Marketing Management

A Senior Essay Submitted to the Department of Marketing Management the Requirement

of the Study for Partial Fulfillment of BA Degree in Marketing Management.

Interview Questionnaires Designed for the Manager of the Branch

Dear Manager

The purpose of this interview is only for the academic purpose is to collect data for the Senior
Essay in requirement for a partial fulfillment of BA degree in Marketing Management of Unity
University. The study aimed at to assess the level of customer satisfaction in ATM service at
CBE in 22 Mazoria Branch. I would like to emphasis that your response are extremely valuable
for the successful completion of this study. The answer you provide will be confidential.
Thank you very much in advance for your cooperation and for scarifying your precious time.

Interview Questionnaires designed for the manager of the branch

1. What type of electronics banking service do you provide?
We have many electronics banking service among them e.g. visa electronics card (debit,
credit and prepared visa cards), ATM machines (local and foreign types), mobile banking
(USSAD, web based and Android) and internet banking (both corporate).
2. What are the basic barriers of adopting new technology innovation like ATM?
There are many barriers of adopting new innovation like internet innovation, customer
awareness of usage, Customer awareness on the security of e-banking and power
interpretation.
3. In your opinion what are the key factors that hinder your institution to adopting ATM?

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  Connection(telecommunication) programs)
 Power(electricity) problems
 Low customer awareness, and
 Hardware (spare part) faults are also hindered the adoption of ATM in somewhat.
4. Do you see any social, economic and legal barrier to adopting ATM in your institution?
 Social barrier include low level of awareness, high level illiteracy.
 Economic barrier include low level of personal income as well as national income
(per capital income) of the country.
 Legal barrier also include, their no suitable regulatory frame work.
5. What are the benefits your institution gained from the adoption of ATM system in the
delivery of service to customers?

ATM is very important in n the current time. E.g. Time saving, Cost saving, service
efficiency, and using in any time means 24 hours service to the customers.

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