PROBLEM AND PROSPECT OF ATMS INEFFICIENCY IN BANKS

PROBLEM AND PROSPECT OF ATMS INEFFICIENCY IN BANKS (A CASE STUDY OF SELECTED ATM POINTS IN UYO)

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Abstract

Banking globally has evolved in different scenarios over the last two decades. The passion to bring satisfaction to the customer has also forced great-thinkers of the industry to develop multiple time-saving and service satisfaction products; these services are backed by the prowess of modern information technology. The Automated Teller Machine (ATM) is one of these self-serving technologies that have come to change the way banking is done in Nigeria. With just few years in full service within the country, we investigate in this research how the service has fared in the country so far.

 

                            CHAPTER ONE

                           INTRODUCTION

1.1 Background of the study

It is one of the paradoxes of success that the things and ways which got you where you are, are seldom the things to keep you there (Handy 1994:49). The world is changing, so is banking and all the activities around it. Thriving in this industry calls for stringent crystallization of evolving concepts and brands within the industry. Banking globally has evolved in different scenarios over the last two decades. The desire to bring satisfaction to the customer has also forced top-thinkers of the industry to develop multiple time-saving and service satisfaction products; these services are backed by the prowess of modern information technology. According to Walford (2008) financial institutions are looking to mobile banking as a way to round out their banking options, providing their customers and members more convenient ways to bank. And wireless carriers are offering more ways to get on the mobile-banking bandwagon, connecting financial institutions to their networks.

The Automatic Teller Machine (ATM) has been a lucrative point for banks in Nigeria both to reduce traffic within banking halls and the increased revenue through induced spending, but that scene is changing even as off-premises opportunities grows larger and the market saturates based on the number of machines within circulation. In the past six years, the number of ATMs worldwide has grown by a half million, and estimates from the ATM Industry Association (ATMIA) reveal that the number of ATMs in the world exceeded 1.5 million at the end of 2005. By 2011, an estimated 2 million ATMs has been deployed. (Crosby and Killifer 2007:1). As competition increases and surcharge fees decrease or go away altogether, many banks are exploring other markets (cash Points) for the spread of their ATM services. Komal (2009) in his study posit that ATM services enhance operations and customer satisfaction in terms of flexibility of time, add value in terms of speedy handling of voluminous transactions which traditional services were unable to handle efficiently and expediently. The machine can enable customers to deposit and withdraw cash at more convenient time and places than during banking hours at branch (Muhammad 2010). When it was first introduced, the ATM was meant to reduce the unnecessary traffic in the banking hall, make customers have a quick access to their money and make life convenient to a certain level. However, according to Ayo et al., (2010) the situation today has changed drastically; it has become a source of worry to users and providers (banks), because the function it was meant to provide has been seriously eroded. It has become a money spinner for fraudsters, who have found new heaven in compromising innocent people’s personal identification numbers (pin). ATM behavior can change during what is called “stand-in” time, where the bank dispensing the cash is unable to access databases that contain account information (possibly for database maintenance), that is, when there is network problem. ATMs at times can also deduct money from the account without actually dispensing money; these, among others, are the bane of these money dispensing machines. With all the problems and incompetence of this money dispensing machine in Nigeria; we can say it has recorded some success. The level of satisfaction intended to be provided by these machines is reduced by technological and processing failures, the perception that the service delivery mode is expensive and the insecurity regarding standalone ATMs. All these create customer dissatisfaction.

1.2 STATEMENT OF THE PROBLEM

The advent of automated teller machine (ATM) in Nigeria banking sector has been a mixture of joy and sorrow to the users of this cash dispensing machine this is because most of the machine are just object of decorating the bank environment as most of them are not on at all or out of service. It is on this backdrop that the researcher intends to investigate the causes of the inefficiency of these cash dispensing machine in Uyo metropolis.

1.3 OBJECTIVE OF THE STUDY

The main objective of the study is to ascertain the problem and prospect of ATM inefficiency in Uyo metropolis. However, for the successful completion of the study, the researcher set out the following sub-objectives to be achieved:

1. To ascertain the relationship between bank service and efficiency of the bank ATM.
2. To evaluate the causes of ATM inability to dispense cash.
3. To ascertain the causes of the error message issue or switch inoperative.
4. To evaluate the role of the banks in ensuring efficiency of these machines.

1.4 RESEARCH QUESTION

For the successful completion of the study, the following research questions were formulated.

1. Is there any relationship between the quality of service rendered by the bank staff and the efficiency of the bank ATM?
2. What are the factors that causes ATM inability to dispense cash?
3. What are the ways of ensuring efficiency in ATM?
4. What is the role of the banks in ensuring efficiency of ATM

1.5 SIGNIFICANCE OF THE STUDY

It is perceived that at the completion of the study, the findings will be of great importance to the banking sector who are the owners of these machines, the study will also be of great importance to the customers of the banks who are the direct benefactor of these machine and to understand the intricacy of the machine. The study will also be of great importance to researchers who intend to carry out investigation on similar topic as the study will serve as a guide to them. Finally the study will be of great importance to students, teachers lecturers and academia as it will add to the pool of knowledge.

1.6 SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers problem and prospect of ATMs inefficiency in banks in Uyo metropolis. However, the researcher encounters some constrain in the cause of the research which limited the scope of the research. Some of the limitations are:

This research has some constrain to its scope and coverage which are:

1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher have to combine other academic activities and examinations with the study.
3. c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities

1.7 DEFINITION OF TERMS

Bank: A bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries. Most nations have institutionalized a system known as fractional reserve banking under which banks hold liquid assets equal to only a portion of their current liabilities.

ATMs: An automated teller machine, also known as an automatic teller machine (ATM, American, British, Australian, Malaysian, South African, Singaporean, Indian, Maldivian, Hiberno, Philippine and Sri Lankan English), automated banking machine (ABM, Canadian English), cash machine (British English), cash point, cash line, mini bank, or bankomat is an electronic telecommunications device that enables the customers of a financial institution to perform financial transactions, particularly cash withdrawal, without the need for a human cashier, clerk or bank teller

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