The Effect of ATM Services on Customer Satisfaction of Commercial Banks in Cameroon Case Study: NFC Bank Buea Branch
Department: Accounting
No of Pages: 57
Project Code: ACC9
References: Yes
Cost: 5,000XAF Cameroonian
: $15 for International students
ABSTRACT
Commercial
banks have been in the process of significant transformation. Despite this
transformation, even though there is a richness of information on the nature
and scope of internet banking, there is a scarcity of evidence about the effect
of internet banking activities amongst banks that have adopted it compared to
those that have not done so.
This
study sought to investigate the Effect of Automated Teller Machine Services on
Customer Satisfaction of Commercial Banks in Cameroon Case Study: NFC Bank Buea
Branch. The main objective of the study was to examine the effect of ATM
services of Commercial Banks in Buea in the case of NFC Bank Buea.
For
this study, data were collected from primary and secondary sources. Data for
the study were analysed using descriptive statistical tools such as percentages
and frequencies and the target population comprised of 33 respondents of NFC
Bank, data collection was done through the use of questionnaires for easy
interpretation.
From
the study, it was revealed that, the role of ATM Banking adoption on the
performance of the banking sector mainly refers to time reduction and quality
improvement, rather than cost reduction as reported by many authors.
The
study further revealed that the introduction of ATM Banking has impacted
positively on the bank’s human resource performance, in terms of improved
efficiency and effectiveness of commercial banks performance even as it has
enhanced customer satisfaction and increased productivity.
The
study recommends that critical infrastructure that aids the usage of ATM
Banking products should be provided and also a fixed network service should be
provided to enhance the usage of the ATM machine at all times.
CHAPTER ONE
INTRODUCTION
1.1 Background to the
Study
Globally,
the customer satisfaction of an industry depends on how the Automated Teller
Machine services are well placed. Poor performance of ATM Services will cause
customer dissatisfaction.
There
are now close to 3.5 million ATMs installed. The idea of out of -hour cash
distribution developed from bankers needs in Asia, Europe, little was known of
the Japanese device called “computer loan machine” and supplied cash as a three
month loan at 5% per annum after inserting a credit card, the device was
operational in 1966.
ATM
cards are fast replacing confounding withdrawal forms as a convenient way of
getting our money from banks. In a way, they are rewriting the rules of
financial transactions.
A
smart person no longer need to carry a wallet- full of money; rather what
he/she needs to do, is to fish out an Automatic Teller Machine (ATM) card from
his/her pocket, insert it in the slot of the machine, punch in a few details
and go home with hard cash (Singh and Komal, 2009).
Adrian
Ashfield invented the idea of a card combining the key and user’s identity in
February 1962 and it was granted UK pattern 959,713 for “access controller” in
June 1964 and assigned to W.S Atkins and partners who employed Adrian Ashfield.
It
is widely accepted that the first cash machine was put into use by Barclays
Bank in its Enfield town branch in North London on 27 June 1967 and was
inaugurated by an English actor called Reg Varney.
This
invention was led by a team engineered by John Shepherd Barron of De La Rue
printing firm who was awarded an honor in 2005 in New York by City Bank.
ATM
is said to have evolved from early cash dispensers and is said to have first
been introduced in the early 1970s. The dispensers were operated by a token in
the form of a punch card. This enabled a customer to withdraw as sachets of
suitable values of bank notes. These sachets process and then return the card
to the customers.
ATM
is designed to perform the most important function of banks. The plastic card
is replacing cheques, personal attendance of the customers, banking hour’s
restrictions and paper based verifications.
ATMs
are used as springboard for electronic fund transfer. ATM itself can provide
information about customer’s account and also receive instructions from
customers-ATM cardholders. An ATM is an electronic fund transfer terminal
capable of handling cash deposits, transfer between accounts, balance enquiries,
cash withdrawals and pay bills (Hood, 1976).
In
many parts of the world, the majority of bank customers regularly use Automatic
Teller Machines (ATMs) and today’s western youths have not known a world
without them. It has taken approximately 30 years to establish ATMs as
ubiquitous examples of public walk-up-and-use devices.
The
adoption has not been straightforward, requiring trust in the technology and
willingness to modify behavioral strategies in the very sensitive domain of
personal finance. Financial institutions have played an important role in
encouraging ATM adoption.
The
ATM flourishes within societies where time is precious and money readily
available. This culture is composed of individuals, who have personal bank
accounts and access to a wide range of technology.
For
these individuals, ATMs are convenient and reliable every day; push a few
buttons and get the money. As ATMs cross-new borders and pervade different
cultures, it is important to understand the role of cultural characteristics on
people’s perception of attitudes towards, and action on the machine.
This
understanding is instrumental in facilitating technology uptake and improving
design localization, or the process of infusing a specific cultural context
into products designed for different cultures (Anderson, 1993).
Though,
the aim of these services is to satisfy customers, there is the need to
understand customer awareness, perception and importantly the level of
satisfaction. Efforts are made to attract and retain customers by offering them
a basket of tailored schemes supported by a state of the art distribution
system (the ATMs).
The
whole exercise is helping banks to serve their customers fast and avoid human
intervention totally. And for the customers, ATMs offer hassle-free cash
withdrawals, no more fighting with the bank’s teller for change and fresh
notes. The ATM has become a medium for non- cash transactions such as payment
of bills, insurance payment, printing of statements or even accessing the
internet (Krishna and Rao, 2006).
In
Cameroon, the value of ATM (per 100,000 adults) was 3.52 as of 2014. NFC
(National Financial Credit) launched the ATM in 2012 to make life easier to its
loyal customers. It has 7 branches over 10 regions of Cameroon.
Though
the northern regions of Cameroon are not yet served by the bank but progress
are being made to create branches there. The company was created in 1989 and it
has been ranked as the second in commercial activities in Cameroon.
1.2 Problem Statement
The
use of ATM is a new way of accessing banking services necessitated by
customer’s business needs and is enabled by fast changing technology.
Due
to achievements brought about by increased utilization on Information and
Communication Technology (ICT) in society, the banking industry has introduced
ATM. ATMs provide a new method of dispensing customer services which are
expected to increase efficiency, sales performance, and enhance customer
satisfaction (Mboma, 2011).
ATM
was introduced in Cameroon in 2004 and since then, it has been facing a lot of
problems when carrying out its activities such as; breakdown of ATM machines,
long queues at ATM service points, retention of customers cards, limited
knowledge on the use of ATM cards and fraudulent transaction and operations.
Studies
have been carried out on the effect of ATM in providing services, and
customer’s satisfaction in countries like USA, UK, Malaysia, Singapore, Finland
and Australia (Gerrard and Cunningham, 2006).
To
the best of my knowledge, no sufficient work has been done in Cameroon with
regards to ATM services and customer satisfaction issues. It is therefore
against this backdrop that the researcher was prompted to investigate and find
out the effect of ATM services on customer satisfaction in NFC bank Buea.
1.3 Research Questions
Based
on the background study above, the main problem of this study remains, what is
the effect of ATM services on customer satisfaction. In line with this problem,
the following research questions were developed,
- What is the relationship between ATM services and customer satisfaction?
- What are the benefits of ATM services to customers of NFC bank?
- What are the challenges faced by customers using ATM services?
1.4. Objectives of the
Study
Main objective:
- To examine the effect of ATM services on customer satisfaction in commercial banks in Buea in the case of NFC Bank
Specific objectives
- To establish a relationship between ATM services and customer satisfaction.
- To access the benefits of ATM services to customers of NFC Bank.
- To examine the challenges faced by customers using ATM services.
