ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

Effect of ATM Service Quality on Customers Satisfaction in Banking

Industry in Ethiopia:
(The Case of Oromia International Bank in Addis Ababa)

By
Habte Ashenafi

Adviser

Mesfin Fikre (PhD)

A Project Research Submitted to College of Business and Economics

Department of Management, Addis Ababa University in Partial Fulfillment of
the Requirement for the Degree of Executive Masters of Business
Administration.

March, 2019
Addis Ababa, Ethiopia
 DECLARATION

I am submitting this project paper in partial fulfillment of the requirements for the award of the
Degree of Executive Masters of Business Administration and to the best of my knowledge it has
not been submitted for qualifications of any degree or diploma at any university or other
institutions of higher learning and that all references have been given acknowledgment for
citation.

Habte Ashenafi _____________________ __________________

Name Signature Date

Mesfin Fikre (PhD) ____________________ ________________

Research Adviser Signature Date

II
 Addis Ababa University
College of Business and Economics
POST GRADUATE EMBA PROGRAM

Effect of ATM Service Quality on Customers Satisfaction in Banking

Industry in Ethiopia:
(The case of Oromia International Bank in Addis Ababa)
By: Habte Ashenafi

Approved by the Board of Examiners:

____________________ _____________________
Advisor Signature

_____________________ _____________________
Internal Examiner Signature

_____________________ _____________________
External Examiner Signature

III
 ACKNOWLEDGMENT

A number of individuals have provided invaluable support, encouragement, and constructive

criticism when preparing this dissertation. First, I sincerely thank Dr. Mesfin Fikre for his
constructive comments which made this work a reality, without his guidance, this study could
not have taken its present form.

I also acknowledge all of the staff that has been working in Management Department at Addis
Ababa University (AAU) for their essential cooperation with this study. I wish to thanks OIB
managements, staff, and all of the respondents for the cooperation that I enjoyed in due course of
executing this research study.

Special thanks due to Mr. Ashenafi Tsegaye for providing continuous constructive suggestion
and advice concerning this research study.

Furthermore, I am very thankful to all individuals that in one way or another for facilitated my
work in this study. Finally, I thank my lovely wife W/ro Meseret Lemessa for her support while
I was preparing this dissertation.

IV
DECLARATION ....................................................................................................................................... II

ACKNOWLEDGMENT ......................................................................................................................... IV

GLOSSARY OF ACRONYMS AND ABBREVIATIONS ............................................................... VIII

ABSTRACT ............................................................................................................................................. IX

CHAPTER ONE: BACKGROUND OF THE STUDY ........................................................................... 1

1.1 Introduction ...................................................................................................................... 1
1.2 Emergence and Development of E-Banking Transactions in Ethiopia ............................ 3
1.3 Background of the Company............................................................................................ 4
1.4 Statement of the Problem ................................................................................................. 5
1.5 Research Questions .......................................................................................................... 7
1.6 Objective of the Study ...................................................................................................... 7
1.7 Scope of the Study............................................................................................................ 7
1.8 Significance of the Study ................................................................................................. 8
1.9 Limitations of the Study ................................................................................................... 8
1.10 Organization of the Study................................................................................................. 9
1.11 Operational definitions ..................................................................................................... 9

CHAPTER TWO: LITERATURE REVIEW ....................................................................................... 10

2.1 Introduction .................................................................................................................... 10
2.2 Theoretical Review......................................................................................................... 10
2.2.1 E-Banking ................................................................................................................... 10
2.2.2 Automated Teller Machines (ATMs) ......................................................................... 12
2.2.3 Customer Satisfaction and Service Quality ................................................................ 13
2.2.3.1 Customer Satisfaction ............................................................................................. 13
2.2.3.2 Service Quality........................................................................................................ 14
2.2.3.3 Service Quality Measurement ................................................................................. 16
2.3 Empirical Review ........................................................................................................... 18
2.4 The Theoretical Framework ........................................................................................... 19
2.5 Research Gap .................................................................................................................. 21

CHAPTER THREE: METHODOLOGY .............................................................................................. 23

3.1 Introduction .................................................................................................................... 23
3.2 Research Design ............................................................................................................. 23

V
 3.2.1 Study Population ......................................................................................................... 24
3.2.2 Sampling Method........................................................................................................ 24
3.2.3 Designing the Questionnaire....................................................................................... 26
3.2.4 Method of Data Analysis ............................................................................................ 27

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION ................. 29

4.1 Introduction .................................................................................................................... 29
4.2 Survey Findings .............................................................................................................. 29
4.2.1 Validity Analysis ........................................................................................................ 29
4.2.2 Reliability Analysis .................................................................................................... 30
4.2.3 Return Rates................................................................................................................ 30
4.2.4 Demographic Information .......................................................................................... 31
4.3 Customers ATM Use Status ........................................................................................... 34
4.4 Descriptive Statistics ...................................................................................................... 37
4.5 Correlation Analysis ....................................................................................................... 41
4.6 Mean score difference among groups of background on dependent variables .............. 43
4.7 Salient problems encountered by OIB ATM service users ............................................ 52
4.8 Frequent Problems encountered by ATM customers of OIB ......................................... 52
4.9 Interview Findings .......................................................................................................... 55
4.9.1 Major problems related to ATM Services obtained from interview ........................... 55
4.9.2 Sources of the ATM service problems obtained from interview ................................ 55
4.9.3 Enhancing customers‘ satisfaction obtained from interview ...................................... 56

CHAPTER FIVE: FINDINGS, CONCLUSION AND RECOMMENDATIONS .............................. 58

5.1. Introduction .................................................................................................................... 58
5.2. Research Findings .......................................................................................................... 59
5.3. Conclusion ...................................................................................................................... 61
5.4. Recommendations .......................................................................................................... 62
5.5. Recommendation for Future Research ........................................................................... 63

Reference ................................................................................................................................................... 65

Annex ............................................................................................................................................................ i

VI
 List of Tables

Table 1-Cronbach‘s Alpha (Reliability analysis).......................................................................... 30

Table 2-Questionnaire Return Rates for Each ATM Stations....................................................... 31
Table 3-Gender distribution of respondents.................................................................................. 31
Table 4-Age distribution of respondents ....................................................................................... 32
Table 5-Educational Qualifications of respondents ...................................................................... 32
Table 6-Marital status distribution of respondents ....................................................................... 33
Table 7-Occupational status distribution of respondents .............................................................. 33
Table 8-Salary distributions of respondents.................................................................................. 34
Table 9-Respondents Customer status distribution ....................................................................... 34
Table 10-Frequency of ATM service use distribution of respondents.......................................... 35
Table 11-Frequency distribution for ATM service use for cash withdrawal ................................ 35
Table 12-Frequency distribution for ATM service use for fund transfer ..................................... 36
Table 13-Frequency distribution for ATM service use for balance Inquiry ................................. 36
Table 14-Frequency distribution for ATM service use for mini statement .................................. 37
Table 15- Descriptive Statistics of Service Quality Dimensions .................................................. 37
Table 16-Overall satisfactions with OIB ATM service ................................................................ 39
Table 17-Respondent‘s perception of OIB ATM service quality ................................................. 40
Table 18-Correlation analysis ....................................................................................................... 41
Table 19-Mean Difference between Groups of Background Variables on Tangibility ................ 43
Table 20-Mean Difference between Groups of Background Variables on Reliability ................. 44
Table 21-Mean Difference between Groups of Background Variables on Empathy ................... 45
Table 22-Mean Difference between Groups of Background Variables on Responsiveness ........ 47
Table 23-Mean Difference between Groups of Background Variables on Assurance ................. 49
Table 24-Mean Difference between Groups of Background Variables on Overall Satisfaction .. 51
Table 25-Frequent Problems encountered by ATM customers of OIB ........................................ 53
Table 26-Summery of respondent‘s suggestion to improve OIB ATM the service ..................... 54
List of figures

Figure 1-Research model .............................................................................................................. 20

VII
GLOSSARY OF ACRONYMS AND ABBREVIATIONS

ANOVA- Analysis of Variance

ATM-Automatic Teller Machine
CBE-Commercial Bank of Ethiopia
CORE-Centralized online real-time and electronic
E-Banking-Electronic Banking
ICT -Information and Communication Technology
NBE-National Bank of Ethiopia
OIB-Oromia International Bank
PC-Personal Computer
PIN- Personal Identification Number
POS-Point of sale/Purchase
PSS-Premiere Switch Solutions
SERVPERF-Service Performance
SERVQUAL- Service Quality
SPSS-Statistical Package for Social Science
SQ- Service Quality

VIII
 ABSTRACT
This study has been conducted with an objective to asses’ consumer satisfaction on ATM
in the Ethiopian banking industry. The analysis of this study was made based on a case
study on OIB customers in Addis Ababa city. The study was conducted based on data
collected from customers and management of the bank through questionnaires and
unstructured interview. The questions were focused to evaluate the extent of customer
satisfaction regarding ATM services of the bank in five service quality dimensions that
included tangibility, reliability, responsiveness, assurance and empathy towards ATMs.
Moreover, to achieve the research objective the research adopted a descriptive research
design; using both qualitative and quantitative approach. The designed questionnaires
were distributed to 200 ATM card users of the bank. Source of data was primary;
primary data were collected by using 5-point Likert-Scale. The samples were selected
from five different city branches location by purposively sampling technique. Using
SPSS, descriptive statistics, correlation, one sample t-test and anova are used to analyze
the data. The research finding shows that that OIB ATM customer’s level of satisfaction
was positive, even though, customers were not happy with some of ATM attributes like
promptness in replacement of lost ATM cards, ATM out of order, return of swallowed
ATM card, insufficient number of ATM, inaccessibility of ATM and employee to solve
ATM related issues and inconvenience of ATM locations. Moreover, the survey result
also implied that the management of the bank to pay attention for training and
developing staffs’ skill in using ATM services in addition to installing the ATM in
appropriate and accessible places.

Keywords: ATM, Customer Satisfaction, Service Quality, Ethiopia

IX
 CHAPTER ONE: BACKGROUND OF THE STUDY

1.1 Introduction

Technology is making a tremendous impact upon service companies in general and the
financial services sector is no exception. The application of information and communication
technology concepts, techniques, policies and implementation strategies to banking services
has become a subject of fundamentals importance and concerns to all banks and indeed a
prerequisite for local and global competitiveness in banking industry. As a result of this
technological improvement business environment in financial sector is extremely dynamic
and experience rapid changes and demands banks to serve their customer electronically. The
evolution of e-banking started from the use of Automatic Teller Machine (ATM) and Finland
is the first country in the world to have taken a lead in e-banking (Mishra RK, & Kiranmai J,
2009).

E-Banking gives customers the opportunity to access banking services from the comfort of
their homes and offices and also be able to do most of the transactions which would have been
done in the banking halls. With the use of personal computer (PC) or even mobile phone with
an internet connection, customers are able to carry out transactions such as cash withdrawals,
payments of utility bills, transfers from one account to the other, viewing and printing of
statements as well as request for cheque books on their traditional accounts (Dzogbenuku,
2013).

Today, almost all banks are adopting electronic banking as a means of enhancing service
quality of banking services. They are providing electronic banking to their customers to
increase customer‘s satisfaction in banking service (Shittu, 2010). A study by Kumbhar
(2011) on customer satisfaction towards E-banking services of ICICI bank in Chennai City,
India, which considered factors affecting on customers‟ satisfaction: an empirical
investigation of ATMs service and examined that the cost effectiveness of ATM service were
core service quality dimension and it was significantly affecting on overall customer
satisfaction in ATM service provided by commercial banks.

Literature shows that ATM banking has received customer preference to become the second
most popular channel for accessing banking products/services behind branch banking.

1
Now, Ethiopia banks are investing money in ICT Infrastructure to provide e-banking services
to their customers. It provides various alternative e-channels to using banking services e.g.
ATM, Point of sale, internet banking, mobile banking, electronic fund transfer, electronic
clearing services etc. However, as per Ethiopia e-banking scenario, ATM is most
acknowledged e-banking channel as compared to other e-channels.

Although ATM systems have high fixed costs, they have lower variable transaction
processing costs according to research. With that proficiency ATMs could be substituted for
employees that provide services on demand deposits accounts thereby be able to reduce the
number of transactions processed by human tellers. That would allow banks to reduce direct
customer service employment (Kantrow, 1989). According to Rose (1999), ATMs are
efficient method for yielding higher profitability as they accomplish higher efficiency per
duration of time than human tellers (normal of 6,400 exchanges for every month for ATMs
contrasted with 4,300 for human tellers). Moreover, ATMs have a huge potential to reach
unreachable society through its machines sales outlets. ATMs have therefore become strategic
technology in the banking sector in delivering banking products/services and are expected to
offer competitive advantage to banks investing in ATM technologies over those that do not.

Therefore, to continue achieving competitive advantage through ATM banking, bank

managers need to know the key features of ATM banking whose performance greatly
influence customers‘ satisfaction and factors contributing to customer dissatisfaction with
regard to ATM service.

Oromia International Bank (OIB here after) is one of the major competing private banks in the
Ethiopian banking industry. Like other banks, OIB is investing on e-banking services to
enhance its capacity to deliver quality banking service to its customers. It is hoped that the
adoption of new technologies such as e-banking, have a positive impact on the quality of
service and hence the satisfaction of customers. In contrast, new technologies, for various
reasons, face challenges and hence may become a source of dissatisfaction. Understanding the
possible sources of discontents is very important to address the challenges and thereby
enhance the positive impacts of new technologies on customer‘s satisfaction and consequently
the competitiveness of the bank.

2
1.2 Emergence and Development of E-Banking Transactions in Ethiopia

The emergence of E-banking in Ethiopia goes back to the late 2001, when the largest state
owned, Commercial Bank of Ethiopia (CBE) introduced ATM service in the country with
eight ATMs machine and followed by Dashen Bank S.C. CBE has had Visa membership
since November 14, 2005. But, due to lack of appropriate infrastructure it failed to reap the
fruit of its membership. Despite being the pioneer in introducing ATM based payment system
and acquired visa membership, CBE Lagged behind Dashen bank, which worked aggressively
to maintain its lead in E-payment system. As CBE continues to move at a snail's pace in its
turnkey solution for Card Based Payment system, Dashen Bank remains so far the sole player
in the field of E-Banking since 2006 (Gardachew, 2010).Currently, all most all banks in
Ethiopia are providing e-banking service partly or fully in Addis Ababa.

Before few years back, due to the absence of system, that integrates and centralizes all banks‘
online real-time and electronic (CORE) banking solutions, bank ATMs are only for their own
clients. The payment system is manually handled using papers that moves from banks to
National Banks of Ethiopia (NBE).

Thus, on February 2009, the three private commercial banks; Nib International Bank S.C.,
Awash International Bank S.C., and United Bank S.C, have established separate entity under
the name of Premiere Switch Solutions (PSS) with 165 million Br capital (Amanyehun, Addis
fortune news paper, 2011). PSS has currently six member banks, including the Addis
International Bank, Berhan International Bank, and Cooperative Bank of Oromia S.C. The
main objective of PSS formation is for the common ATM operational function and control
(PSS card user guide, 2011). The PSS is benefiting member banks and their clients by
allowing customer through the use of different ATM machines by member banks more than
other banks owning their own ATM only for their own client.

Later in 2011, company named ‗‘Eth-Switch‘‘ was established by 16 banks with 80.5 million
capital. The company is established to connect all of existing switches and payment system in
the national payment system and that enable clearing of cheques and using the ATM of any
bank and use POS. That means it enables clients to transact money from ATMs of other banks
not only the bank in which the account is maintained.

3
1.3 Background of the Company

Oromia International Bank S.C. (OIB) was established in accordance with the pertinent laws,
regulations and the 1960 Commercial Code of Ethiopia, by the Monetary and Banking
Proclamation No. 83/1994 and by the Licensing and Supervision of Banking Proclamation
No. 592/2008. Accordingly, on September 18, 2008, OIB obtained a banking business license.
At the time of its establishment, OIB‘s authorized capital was Birr 1.5 billion, whereas its
subscribed capital was Birr 279.2 million, and its paid-up capital Birr 91.2 million. OIB began
operation on October 25, 2008 by opening its first branch at the Dembel City Centre. More
specifically, its branch was named Bole Branch.

Thus, OIB has various types of scheme for customer like deposit service, credit/lending
service, international banking service, international money transfer service, interest free
banking service and electronic banking service.( Source; broacher of the company)

According to Manager of Planning and Performance Management Division of the bank as of

March 31, 2018, the total number of branches reached 236, the total asset has grown to Birr
21.24 billion, Paid up Capital has reached 1.3billion, deposit balance has grown to Birr 17.4
billion, Loans and Advances reached 11.8 billion and it is total staff reached 3,226.

To catch up with the proliferation of new technologies, almost all branches of the Bank are
networked by core banking system. Electronic banking services are now operational. Card,
mobile and agent banking are now in full swing with round-the-clock services while Internet
banking is under implementation. According to the annual report of the bank for the period
2017/18 as of June 2018, OIB have 22,000ATM card holders, 36 Agents, 3,199 Mobile
banking accounts and 40 ATM machines were installed at selected business location.

According to Director of Electronic Banking Department, OIB currently has 47ATMs

Machine of its own; and ATM sharing arrangement with all banks in the country. So, holder
of ATM card of the bank can obtain cash from any ATM machine of any bank in the country.
The service the bank provides through ATM include; withdrawing cash from one‘s account,
transferring funds from one account to another, making balance enquiries, printing and
viewing mini statement etc.

4
1.4 Statement of the Problem

According to Addis fortune news published on June 13, 2018, the number of transaction done
by ATMs through Eth-Switch has reached six billion Birr that makes that ATM, has received
customer preference to become the second most popular channel for accessing banking
products/services behind branch banking.

It is generally believed that e-banking service offers a wide range of advantages for both the
bank and the customers. For example, Daniel (1999) and Mols (1998) claim that compared to
ordinary banking system electronic banking is providing the competitive advantage by
lowering the cost and providing best satisfaction of customer needs. ATMs provide bank
customers with 24 hour access to banking products/services; they are easy to use and are
faster than human tellers in the banking halls. ATM systems are believed to have improved
the operational efficiency of banks and customer service in the banking sector (Banker and
Kauffman, 1988; Glaser, 1988; Laderman, 1990).

However, Ayo, C. K., Adewoye, J. O. & Oni, A. A. (2010): Aminu and Arhin (2011), showed
that irrespective of all these attributes of the ATM service delivery, bank customers still
underutilized the ATM service capacity by queuing in the banking halls to make cash
withdrawals even when the amount may be withdrawn from the ATM and it has become a
source of worry to users and providers (banks), because the function it was meant to provide
has been seriously eroded. 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;
According to Eth-switch annual report (2016/17), on the average 42% of the ATM
transactions processed by Ethswitch had been declined by Issuer Banks in the 2016/17 fiscal
year and the major reasons of the declined transactions were attributable to three reasons
which are considered as technically controllable by Issuer Banks. Those are time out, issuer
inoperative and do not honor. For instance, While a card holder using an ATM card of other
banks ATM machine to withdraw cash, sudden system failure may deter the machine from
dispensing cash even though the system deduct money from customer‘s account that will
create frustration and disappointment. Moreover, according to Eth-switch internal procedure,

5
it takes on average eight up to thirteen days to re-credit such account. These, among others,
are the annoyance of these money dispensing machines.

Despite the above challenges, OIB is expanding on the availability of ATM services in many
parts of the country. As a result the number of OIB ATM service customers is increasing
enormously over the past few years, most importantly in the capital city Addis Ababa. Given
this growth in the number of ATM customers, the level of customers‘ satisfaction with the
bank‘s ATM services has a serious implication on the overall customers‘ satisfaction,
customer retention and profitability. So far, the bank has not developed a framework to assess
the level of ATM customers‘ satisfaction and the challenges they face. Understanding the
level of customer‘s satisfaction and the problems they experience is vital to improve the
quality of ATM services and hence boost customer‘s satisfaction.

Research undertaken on the level of ATM customer‘s satisfaction in the country is limited as
compared to other countries. For instance, a study conducted by Philipos Lamore (2013)
about customer satisfaction and electronic banking service on three selected banks of Ethiopia
and Tirhas G/tsadkan, Fasil Damtew and Addis Beyene (2017), on ―assessment of customer
satisfaction on ATM in Adigrat town‖, offer some insights on the major problems ATM
customers experience and ATM attributes that satisfy customers. However, most of the
studies conducted on ATM service and customer satisfaction were undertaken at early
adoption of the ATM were only few banks give the service, using their own ATM and before
introduction of centralized switch system (Eth-switch), that allow all cardholders of any bank
existed in the country to enjoy ATM service including cash withdrawal from any ATM,
irrespective of the bank. In view of this, it makes it difficult to accept that customers respond
to ATM use is the same in as early adoption and after introduction of a centralized switch
system, hence the need to investigate into that. Beside this, most of the studies conducted in
our country relied on quantitative method developed by researchers in other countries as a
result, little is known about the level of ATM service customer‘s satisfaction and the factors
contributing to their dissatisfaction based on qualitative and quantitative methods.

Thus, this study aims to contribute to existing knowledge on the status of ATM service
customer‘s satisfaction in the country by systematically examining the level of OIB ATM
service customer‘s satisfaction in Addis Ababa; the problems customers experience during
ATM services uses; and the factors contributing ATM service problems.

6
1.5 Research Questions

This study is guided by the following research questions:

 What is the level of OIB ATM service customer satisfaction in Addis Ababa?
 Is there any relationship between service quality dimensions perceived by customers
and customer satisfaction in ATM banking services?
 Is there a significant difference in level of customer satisfaction for ATM service
quality dimensions across different age, gender, educational levels, occupation and
salary?
 What are the factors contributing to OIB ATM service problems in Addis Ababa?
 What can be done to improve the quality of OIB ATM service in Addis Ababa?

1.6 Objective of the Study

General objective
The general objective of this study is to:
 Assess consumer satisfaction on ATM in Banking Industry in Ethiopia.
Specific objectives
 Systematically examine the level of OIB ATM service customer satisfaction in Addis
Ababa;
 Explore, if any relationship between service quality dimensions perceived by
customers and customer satisfaction in ATM banking services.
 To determine if there is a significant difference in level of customer satisfaction for
ATM service quality dimensions across different age, gender, educational levels,
occupation and salary.
 Critically examine problems experienced by OIB ATM service customers in Addis
Ababa;
 Investigate the factors contributing to OIB ATM service problems in Addis Ababa;
 Provide possible remedies to improve the quality of OIB ATM service in Addis Ababa;

1.7 Scope of the Study

The study of this research is limited to services of ATM and on those customers who use the
ATM cards of OIB that are located in Addis Ababa. A number of factors are considered to

7
limit the boundary of the study to Addis Ababa. First, the ATM services offered by OIB are
concentrated in its branches in Addis Ababa. Secondly, the number of OIB customers who
have access to ATM services and who frequently use ATM is significant in Addis Ababa than
in other areas. Third, the researcher is not only an employee of OIB, but currently working in
the OIB head office in Addis Ababa, which is advantageous to access and collect data.
Furthermore, time and financial limitations are also considered in determining the boundary
of the study area.

In short, the study will try to consider sample OIB customers in Addis Ababa for the study.
Different factors will be considered to cluster OIB branches found in Addis Ababa which
offer e-banking services, before questionnaires are distributed to informants.

1.8 Significance of the Study

The outcome of this study will be of immense benefit to the management of OIB, since it will
help identify most of the challenges faced by the banks as well as the complaints raised by the
customers. Solutions will then be proffered on theses identified challenges. This will go a
long way to help the bank achieve its stated objectives, and in the long run increase
shareholder‘s wealth. Furthermore, the study would enable banks executives and indeed the
policy makers of the banks and financial institutions to be aware of electronic banking system
as a product of electronic commerce with a view to making strategic decisions.

1.9 Limitations of the Study

The basic limitation of this study was that it only considers customers perspective of e-
banking service provided via ATM and it doesn‘t consider the other e-banking products.
Moreover, it has not taken in to consideration bank customers who do not use the current
ATM which would help to compare the attitude of e-banking users and nonusers towards e-
banking. Second it was also limited to OIB customers only. Thirdly, customers of other banks
who are using OIB ATM were not considered in the study. Last but not least the study only
covers the capital city of Addis Ababa.

8
1.10 Organization of the Study

This research paper consists of five chapters. The first chapter contains the background of the
study, statement of the problem, objective of the study, significance of the study, limitation of
the study, and organization of the study. The second chapter contains literature review of the
study. The third chapter deals with research design and methodology. The fourth chapter with
the data presentation analysis and interpretation of the research study. The fifth chapter has
summary, conclusion and recommendation based on data collected and analyzed.

1.11 Operational definitions

Below here presented are the definition of concepts/terms or variables from the theoretical
perspective.
 Automated teller machines (ATMs) is a machine that allows customers to access
banking services such as withdrawals, transfers, balance inquiries, requests for cheque
books, account statements, direct deposits, foreign currency exchange etc. (Fenuga, 2010).
 CORE banking-Centralized on line real-time banking: is networking of branches,
which enables customers to operate their accounts, and avail banking services from any
branch of the bank on core banking solution network, regardless of where he/she
maintains his/her account.
 Customer satisfaction is a person‘s feelings of pleasure or disappointment resulting from
comparing products perceived performance in relation to his or her expectations. (Kotler,
2003).
 ET Switch; - a centralized switch system which integrate all real-time and online payment
systems in Ethiopia.
 Electronic Banking; the delivery of banks' information and services by banks to
customers via different delivery platforms that can be used with different terminal devices
such as a personal computer and a mobile phone with browser or desktop software,
telephone or digital television.

9
 CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction

The impact of ATMs on customer satisfaction in the context of banking sector is a widely
discussed topic in the literature. This section targets popular journals, magazines and various
text books that contain fruitful information on various general overviews of E-banking, ATM,
Service quality, Service Quality Measurement and Customer Satisfaction.

2.2 Theoretical Review

2.2.1 E-Banking

The revolution of e-payment as captured by Cheng (2006) in his work ―Evolution of

Electronic Payment‖ started in 1918, when the Federal Reserve Bank first moved currency via
telegraph. However, it was not until the Automated Clearing House was set up by the U.S
Federal Reserve in 1972 that electronic currency became widespread. This provided the U.S
treasury and commercial banks with an alternative to processing cheque.

Daniel (1999) defines electronic banking as the delivery of banks' information and services by
banks to customers via different delivery platforms that can be used with different terminal
devices such as a personal computer and a mobile phone with browser or desktop software,
telephone or digital television. Electronic banking can also defined as the application of
computer technology to banking especially the payment (deposit transfer) aspects of banking
with the help of tele-communication network which permits online processing of the same
day credit and debit transfers of funds between member institutions of a clearing system
(Anyawaokoro, M.1999). According to the United Nations Conference on Trade and
Development (UNCTAD), E- banking refers to the deployment over the Internet of retail and
wholesale banking services. It involves individual and corporate clients, and includes bank
transfers, payments and settlements, documentary collections and credits, corporate and
household lending, card business and some others (UNCTAD, 2002).

The Electronic banking has been around for some time but in form of Automatic Teller
Machines (ATMs) and telephone transactions. More recently, it has been transformed by the
Internet and mobile technologies, the new delivery channels for banking services with

10
benefits to both customers and banks. Access is fast, convenient, and available around the
clock, whatever the customer's location. Additionally through Electronic banking, the banks
are able to provide services more efficiently and at substantially lower costs. For example, a
typical customer transaction costing-about $1 in a-traditional- "brick and mortar" bank branch
or $0.60 through a phone call costs only about $0.02 online (Crane, 1996).

According to Klingebiel, (2002), Electronic banking is an umbrella term for the process by
which a customer may perform banking transactions electronically without visiting a brick-
and-mortar institution. Electronic banking is usually done in following forms: ATMs,
personal computer (PC) banking, Internet banking, virtual banking, online banking, home
banking, remote electronic banking, and phone bank. PC banking and Internet or online
banking is the most frequently used designations. It should be noted, however, that the terms
used to describe the various types of electronic banking are often used interchangeably. PC
banking is a form of online banking that enables customers to execute bank transactions from
a PC via a modem. In most PC banking ventures, the bank offers the customer a proprietary
financial software program that allows the customer to perform financial transactions from his
or her home computer. The customer then dials into the bank with his or her modem,
downloads data, and runs the programs that are resident on the customer's computer.
Currently, many banks offer PC banking systems that allow customers to obtain account
balances and credit card statements, pay bills, and transfer funds between accounts (Crane,
1996).

E-banking especially Internet banking is not limited to a physical site; some Internet banks
exist without physical branches. According to industry analysts, electronic banking provides a
variety of attractive possibilities for remote account access, including: Availability of inquiry
and transaction services around the clock; worldwide connectivity; Easy access to transaction
data, both recent and historical; and direct customer control of international movement of
funds without intermediation of financial institutions in customer's jurisdiction (Crane, 1996).
E-banking is a generic term for delivery of banking services and products through electronic
channels, such as the telephone, the internet, the cell phone, etc. The concept and scope of e-
banking is still evolving. It facilitates an effective payment and accounting system thereby
enhancing the speed of delivery of banking services considerably (R.K. Uppal & R. Jatana,
2007).

11
2.2.2 Automated Teller Machines (ATMs)

ATM is a machine where cash withdrawal can be made over the machine without going in to
the banking hall. It also sells recharge cards and transfer funds; it can be accessed 24 hours/7
days with account balance enquiry (Fenuga OJ, 2010).

Globalization has brought major changes to banking with respect to resources, markets,
processes, and business strategies. This situation has led to a paradigm shift in operations.
ICT (information communication technology) application has become strategic for supporting
investment and operational decisions (Banker, Bardhan, Lin, & Chang, 2006). Over the years
ICT has grown its support role to banking activities. At first, banking activities performed
using computers were the very few simple ones, but presently, ICT supports almost all
activities through the financial service cycle, including product design, development and
marketing chain. E-Payment is a specific area of banking where ICT has found wide
application. One area where ICT application has helped the operational environment of
banking is the use of Automated Teller Machine. ATM systems which integrates all licensed
banks into a network, thereby reducing or eliminating the limitations of traditional branch-
based nature of banking and making the promised real time- on-line concept of globalised
banking a reality.

According to Howells (2008), ATMs were first introduced in 1967 in UK and the first
machine was installed at Barclays bank in London. However, at the beginning they faced
resistance from users as they did not trust them. The resistance faded as young people
especially college students accepted the services with open hands. The use of this device has
now become the way of life worldwide. It has been observed by the Congressional Budget
Office that technological advances have made the ATM machines more functional, cheaper
and easier to accommodate. Hence all ATM users worldwide enjoy the ATM services.

Automated Teller Machine (ATM) has been considered as the prominent amongst the most
critical segments of e-managing an account framework. ATM is a terminal conveyed by a
bank or any money related establishment which empowers the clients to withdraw money,
make offset enquiries, request bank statements, exchange stores furthermore store money. The
ATMs are essentially self-overhauled saving money terminals and are gone for giving quick
and advantageous administrations to the bank's clients (Rasiah, 2010). Basically, it is an

12
electronic terminal which gives clients the chance to acquire managing an account
administration at whatever time. To withdraw money, make stores or exchange trusts between
records, a purchaser needs an ATM card and an Individual Personal Identification Number
(PIN).

Rose (1999) as cited in Abor, describes ATMs as follows: ―an ATM combines a computer
terminal, database system and cash vault in one unit, permitting customers to enter the bank‘s
book keeping system with a plastic card containing a PIN or by punching a special code
number into the computer terminal linked to the bank‘s computerized records 24 hours a day‖.
It offers a great deal of banking services to clients. They are mostly situated outside the banks.
They were introduced initially to serve as cash dispensing machines. However, as a result of
the rapid increase in technology, ATMs go to the extent of given accounts balances and bill
payments. Banks use this electronic banking device, to gain competitive advantage. The
combination of automation and human tellers gives more productivity for the bank during
banking hours. It additionally spares time in customer service delivery as customers do not
queue in banking halls, and along these lines can invest such time spared into other productive
activities. ATMs are efficient method for yielding higher profitability as they accomplish
higher efficiency per duration of time than human tellers (a normal of around 6,400 exchanges
for every month for ATMs contrasted with 4,300 for human tellers (Rose, 1999).

2.2.3 Customer Satisfaction and Service Quality

2.2.3.1 Customer Satisfaction

Customer satisfaction is one of the frequently researched concepts in marketing. Customer

satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of
satisfaction will vary from person to person and product/service to product/service.
Satisfaction is a person‘s feeling of pleasure or displeasure appointment resulting from
comparing a product perceived performance in relation to his or her expectation (Kotler and
Keller, 2006). It can also be said that, Customer satisfaction is the measure of how well
products, service, support and engagement are able to meet the customer expectations.
Satisfaction could be the pleasure derived by someone from the consumption of goods or services
offered by another person, group of people, or an organization; or it can be the state of being
happy with a situation.

13
Customer satisfaction is defined as the extent to which products perceived performance
matches a buyer‘s expectation (Kotler and Armstrong, 2005). It can also be said that,
Customer satisfaction is the measure of how well products, service, support and engagement
are able to meet the customer expectations. Satisfaction will also depend on product and
service quality (Kotler and Keller, 2006).

According to Tse and Wilton (1988), customer satisfaction is defined as the consumer‘s response
to the evaluation of the perceived discrepancy between prior expectations and the actual
performance of the product or service as perceived after its consumption. Giese and Cote (2002)
stated that customer satisfaction is identified by a response (cognitive or affective) that pertains to
a particular focus (i.e. a purchase experience and/or the associated product) and occurs at a certain
time (i.e.post-purchase, post-consumption). This definition is supported by some other authors
who think that consumer‘s level of satisfaction is determined by his or her cumulative experience
at the point of contact with the supplier (Sureshchander et al, 2002).

Alternatively, Westbrook and Oliver (1991) define customer satisfaction as a mental state
which results from customers‘ comparison of expectations prior to a purchase with
performance after a purchase. Halstead et al (1994) states that customer satisfaction is a
transaction specific effective response from customers‘ comparison of product performance to
some pre-purchase standard. Enhancing customer satisfaction is the key to become successful
in the long run and to standout in a crowd of extreme competition specially in banking sector
because competitors are offering here somewhat similar product here.

According to Fornell (1992) in Balogun, Ajiboye and Dunsin (2013), customers satisfaction
holds the potentials for increasing an organization‘s customer base, increases the use of more
volatile customer mix as well as the firm‘s reputation, thereby resulting in competitive
advantage secured through intelligent identification and satisfaction of customer‘s needs
better and sooner than competitors and sustenance of customer‘s satisfaction through better
products/services.

2.2.3.2 Service Quality

Quality has been defined differently by different authors. Some prominent definitions include
‗conformance to requirements‘ (Crosby, 1984), ‗fitness for use‘ (Juran,1988) or ‗one that
satisfies the customer‘ (Eiglier and Langeard, 1987) and Service is defined as ―any activity or
14
benefit that one party can offer to another that is essentially intangible and does not result in
the ownership of anything. Its production may or may not be tied to a physical product
(Kottler, 2003). Quality has come to be recognized as a strategic tool for attaining operational
efficiency and improved business performance (Anderson and Zeithaml, 1984; Babakus and
Boller, 1992; Garvin, 1983; Phillips, Chang and Buzzell, 1983).

Several authors have discussed the unique importance of quality to service firms (e.g.,
Normann, 1984; Shaw, 1978) and have demonstrated its positive relationship with profits,
increased market share, return on investment, customer satisfaction, and future purchase
intentions (Anderson, Fornell and Lehmann1994; Boulding et al., 1993; Buzzell and Gale,
1987; Rust and Oliver, 1994).Most researchers found that service quality is the antecedent of
customer satisfaction (Parasuraman et al., 1988). Quality customer service and satisfaction are
recognized as the most important factors for bank customer acquisition and retention. Service
quality is considered as one of the critical success factors that influence the competitiveness
of an organization. A bank can differentiate itself from competitors by providing high quality
service. Service quality is one of the most attractive areas for researchers over the last decade
in the retail banking sector (Johnston, 1997). Despite the recognized importance of service
quality, there have been methodological issues and application problems with regard to its
functioning. Quality in the context of service industries has been conceptualized differently
and based on different conceptualizations, alternative scales have been proposed for service
quality measurement (see, for instance, Cronin and Taylor, 1992, 1994; Dabholkar, Shepherd
and Thorpe, 2000; Parasuraman, Zeithaml and Berry, 1985, 1988).

Service quality is a customer‘s overall impression of the relative inferiority or superiority of

the organization and its services (Bitner, Hubbert 1994). According to Edvardsson, Thomsson
and Ovretveit (1994), service quality is a service that fulfils the expectations of customers and
satisfies their needs. On the other hand, Lewis and Booms (1983), service quality is a measure
of how well a service delivered matches the customers‘ expectations (It is said that service
quality is best defined by the consumer of the service thereby making it subjective in the
sense that two persons could perceive service quality delivered different. Parasuraman,
Zeithaml and Berry (1988) defined service quality as ‗a global judgment, or attitude, relating
to the superiority of the service‘, and explicated it as involving evaluations of the outcome
(i.e., what the customer actually receives from service) and process of service act (i.e., the
manner in which service is delivered). Those scholars argue that service quality as a

15
difference between consumer expectations of ‗what they want‘ and their perceptions of ‗‗what
they get‘‘. For the reason that, existence of difference in definitions on service quality by
different scholars; different scales for measuring service quality have been put forward.

Service qualities and customer satisfaction are closely related researches have shown that
service quality is a necessary condition for customer satisfaction.

2.2.3.3 Service Quality Measurement

Measuring quality in the service sector is more comprehensive than measuring quality of the
manufacturing sector because quality evaluations are not made solely on the outcome of a
service; they also involve evaluations of the process of service delivery. One of many service
quality research models often used in the world nowadays is SERVPERF proposed by Cronin
and Taylor (1992). This scale was based on the SERVQUAL scale (Parasuraman et al. 1985,
1988) which assessed service quality through the gaps between customer expectations and
perceptions.

The scale measure performance of five service quality components termed Tangible,
Reliability, Responsiveness, Assurance, and Empathy (Parasuraman et al. 1988). There are
three dominant approaches to the measurement of customer satisfaction (Fishbein and Ajzen,
1975; Parasuraman et al, 1985 and Cronin and Taylor, 1992).

The first approach is Importance-performance approach (Fishbein and Ajzen, 1975) proposes
that customer satisfaction with a product or service is a combination of the following;
(1) The perceived importance of a range of the product/service attributes or benefits and
(2) The customers‘ beliefs about the degree to which the product or service has each attribute.

The second measurement approach to customer satisfaction is the Expectations-performance

disconfirmation by Parasuraman et al (1985). This approach is based on the proposition that
customers evaluate or measure their satisfaction with a product/service by comparing pre-
consumption expectations with post-consumption perceptions (performance). This is the basis
of the SERVQUAL (Service Quality) measurement model by Parasuraman, et al (1988).

16
The SERVQUAL model allows customers to rate the product/service on a set of general
attributes presented on a Likert scale to measure their expectations of and their perceptions of
the performance of product/service attributes to measure customer satisfaction.

The third approach eliminated the element of expectations from Parasuraman et al (1988)
SERVQUAL model to perceive that service quality and customer satisfaction is a form of
attitude that performance only is an enhanced means of measurement. This led to the
development of SERVPERF model which uses the same multi-dimension and multi-attribute
scale as SERVQUAL but service quality is evaluated by measuring performance only without
expectations (Parasuraman et al, 1988) or importance weights (Fishbein and Ajzen, 1975)
being used as a standard of comparison.

Several researchers (Bolton and Drew, 1991; Boulding et al, 1993, Gotlieb et al, 1994) agree
that assessment of service quality and customer satisfaction may depend solely on
performance and that SERVPERF may have less bias than SERVQUAL in measuring service
quality (Cronin and Taylor, 1992). Moreover, empirical studies evaluating validity, reliability,
and methodological soundness of service quality scales clearly point to the superiority of the
SERVPERF scale. The diagnostic ability of the scales, however, has not been explicitly
explicated and empirically verified in the past. It is the SERVQUAL scale which outperforms
the SERVPERF scale by virtue of possessing higher diagnostic power to pinpoint areas for
managerial interventions in the event of service quality shortfalls.

According to study by, Juan and Gupta (2004) demonstrated the major managerial implication
of the measurements:
o Because of its psychometric soundness and greater instrument parsimoniousness, one
should employ the SERVPERF scale for assessing overall service quality of a firm.
The SERVPERF scale should also be the preferred research instrument when one is
interested in undertaking service quality comparisons across service industries.
o On the other hand, when the research objective is to identify areas relating to service
quality shortfalls for possible intervention by the managers, the SERVQUAL scale
needs to be preferred because of its superior diagnostic power.

However, one serious problem with the SERVQUAL scale is that it entails gigantic data
collection task. Employing a lengthy questionnaire, one is required to collect data about

17
consumers‘ expectations as well as perceptions of a firm‘s performance on each of the 22 in
our case 25 service quality scale attributes. Addition of importance weights can further add to
the diagnostic power of the SERVQUAL scale, but the choice needs to be weighed against the
additional task of data collection. Collecting data on importance scores relating to each of the
22/25 service attributes is indeed a major deterrent. However, less tiresome approach
(SERVPERF), employed by the researcher to eases the data collection task and to
successfully achieve our research objective.

2.3 Empirical Review

Few studies have been conducted on the impact of ATM services on customers‘ satisfaction
in Ethiopia and other parts of the world, with a number of such studies specifically focusing
on ATM usage and the level of satisfaction of banks‘ customers.

According to Lemma Belay (2016) while studied the effect of ATM service quality on
customer satisfaction in Ethiopian commercial Banks in Debremarkos town using
proportional stratified and simple random sampling technique and cross-sectional data
collected from 190 customers of Ethiopian commercial banks, in Debremarkos town. The
study used Statistical tools such as mean, standard deviation, correlation, and multiple
regression models. The study indicated that except assurance, tangibility, reliability,
responsiveness and empathy have positive and significant effect on customer satisfaction and
the customers were mostly satisfied with the responsiveness dimensions of ATM service
quality.

Tirhas et al, (2017) ―Assessment of Customer Satisfaction on Automated Teller Machine in

Adigrat, Ethiopia‘‘ in Adigrat town using systematic sampling. Since the customers approach
the ATM machine in different time, the researcher was identified the skipping interval and
consider those customers approach the machine in that interval. The study used descriptive
research method. This study found that Promptness of card delivery, number transaction,
quality of note and conveniently located were extremely satisfied the customer. The study
also indicates lack of privacy in executing the transaction, reduction in balance without cash
payment; Cards get blocked of ATMs and fear of safety was the major cause of concern for
the customers.

18
Gezahegn Bacha (2015), made an attempt to ―assessment of customer satisfaction with ATM
banking; empirical evidence from selected commercial banks in Ethiopia‖. The study used
descriptive statistics, correlation analysis and multiple regressions. The finding revealed that,
out of 379 ATM card users where over half are fairly satisfied with ATM services from their
respective bank. All ATM service quality attributes associated with technology have been
perceived good performers, while all attributes associated with employee performance and
management functionality have been perceived not so good in performance. The results have
further found that all service quality significantly correlate with customer satisfaction except
three items under responsiveness.

Charles Mwatsika (2016) ―Customer satisfaction with ATM Banking in Malawi‖ The study
conducted on data collected from 353 ATM card users. The study adopted the importance
performance approach (Fishbein and Ajzen, 1975) to measure customer satisfaction.
Measurement of satisfaction was based on performance only (SERVPERF). Descriptive and
correlation analysis used to answer research questions. The result shows that all service
quality dimensions significantly correlate with customer satisfaction and responsiveness was
the list performing service quality dimension. The result further showed that, reliability is the
most important dimension followed by responsiveness, empathy, assurance and tangibles are
the least important dimension.

With direct interview accompanied with surveys to collect data from a sample of 186
customers were chosen in a random and convenient manner who are using the Bank ATM,
Software Package for Social Science (SPSS version 16.0), Phong Nham, Chi Phan (2015)
examined the Impact of service quality on customer satisfaction of automated teller machine
service: case study of a private commercial joint stock bank in Vietnam. The study applies
SERVPERF framework to analyze the data collected from a questionnaire survey and found
that Assurance and Tangibles factors significantly impact on the customer satisfaction.

2.4 The Theoretical Framework

The theoretical framework of this study was based on SERVPERF (Service performance)
model (Cronin and Taylor‘s 1992) to the measurement of customer satisfaction with ATM
banking and customer satisfaction. It has been used in many researches (Zhou 2004; Hudson

19
et al. 2004; Pham, Nguyen 2007).There were a total of 25 ATM attributes adopted from the
empirical studies. These ATM banking attributes fall within the five dimensions of service
quality (Parasuraman et al, 1988) that include: tangibles, reliability, responsiveness, assurance
and empathy.
Based on the above theoretical framework, the following model was developed by Charles
Mwatsika (2016).

Performance of
Tangibles

Performance of

Reliability

Performance of ATM Service Customer

Responsiveness Quality Satisfaction with
ATM

Performance of

Assurance

Performance of
Empathy

Figure 1-Research model

Source; Charles Mwatsika (2016), and modified by researcher

According to Parasuraman (1988), the above five dimension of ATM service quality have 25
attributes. Those are:
o Tangibles are the physical facilities, equipment as well as appearance of personnel;
that comprised of; number of ATMs per ATM station, convenient location, and
corporate brand appearance on ATMs, readable ATM slips, issuing of clean notes and
cleanliness of ATMs and ATM stations.
o Reliability is the ability to perform the promised service dependably and accurately;
that comprised of; range of services at ATMs, accuracy of ATM transactions, speed of
ATMs, ATMs not out of order, ATM system usability and ease of access to ATMs

20
 o Responsiveness is willingness to help customers and offer prompt service; that
comprised of; cash availability in ATMs, quick replacement of lost ATM cards,
waiting times at ATMs, fast return of swallowed ATM cards, employee speed in
dealing with ATM problems, and employee effectiveness in solving ATM problems
o Assurance is knowledge and courtesy of employees and their ability to inspire trust
and confidence; that comprised of; privacy at ATMs, ATM usage and ATM security
advice, and security at ATM stations.
o Empathy is caring, individualized attention the firm provides its customers. That
comprised of; employee friendliness, ATM fees, eases of ATM card application
process, and employee accessibility to solve ATM issues.

The study analyzed the performance of these ATM banking attributes within the five
dimensions on how they affected customers‘ satisfaction with ATM banking.

2.5 Research Gap

The empirical evidences made available in the country such as Tirhas et.al, (2017), Lemma
(2016) and Gezahegn (2015) were done before introduction of centralized switch system (Eth-
switch), that allow all cardholders of any bank existed in the country to enjoy ATM service
including cash withdrawal from any ATM, irrespective of the bank and some of the studies
were conducted outside of the capital city were few users are available and less infrastructure
as compared to Addis which didn‘t reflect the true picture of ATM service rendered in the
capital city.

Besides, this study differs from Tirhas et.al, (2017) methodologically with the study
conducted by at Adigrat town on Commercial bank. They used quantitative data, personal
observation and very few sample size (40). The variables they used to measure customer‘s
satisfaction toward ATM were only five attributes (promptness of card delivery, number of
transactions, the quality of notes currency, conveniently and language and information
content) which is different from the researches attributes 25.

Despite various studies conducted in different countries on the title ―impact of ATM on
customer satisfaction‖, it may not be appropriate to consider the findings for our countries.
Understanding the scenario in other country my throw some light on the topic however it

21
cannot be applicable fully. This is due to the fact customer preferences and satisfaction level
based on the demography, culture, affordability, IT penetration varies from country to
country. Thus, there is a significant gap relating to research as to impact of ATM on customer
satisfaction. There for the proposed study aims to fill up this research gap by studying the
impact of ATM on customer satisfaction in the case of Oromia International Bank s.c.

22
 CHAPTER THREE: METHODOLOGY

3.1 Introduction

This chapter describes how this research was conducted. It explains how information was
gathered and analyzed. Furthermore, this chapter provides more information on the sampling
methods used in this study, characteristics of the sample, the overall research design and
procedures used for the gathering of the data. What‘s more, the procedure followed and the
measuring instruments used to gather the data are discussed as well as the statistical
techniques used to analyze data.

3.2 Research Design

A research design can be understood us the plan of what data to gather, from whom, how and
when to collect the data, and how to analyze the data obtained. It is a systematic plan or
structured framework of how one intends to conduct the research process in order to solve the
research problem. Research design usually constitutes the formation of a strategy to resolve a
particular question, the collection and the recording of evidence, the processing and analysis
of the data and their interpretation, and the publication of results.

This study was conducted to assess the level of OIB ATM service customer‘s satisfaction in
Addis Ababa. For this purpose, data was acquired from both secondary and primary sources.
The data acquired from secondary sources was obtained from various publications such as
text book, journals and previous studies on ATM service customer‘s satisfaction in Ethiopia
and other countries. Hence, the main objective was asses consumer satisfaction on ATM in
Oromia International Bank Addis Ababa, the data collected from secondary sources were
instrumental to develop a quantitative measurement for customer‘s satisfaction. Consequently,
a quantitative research design was used in this study. A quantitative research, a descriptive
cross-sectional survey to be more specific, involves identifying characteristics of an observed
phenomenon or exploring possible correlations among two or more phenomena. A cross-
sectional descriptive survey research examines a situation as it is; as such it does not involve
changing situations and detecting cause and effect relationships. In light of this, the analysis
of this study was based on quantitative data collected through self-reporting questionnaires.

23
Furthermore, qualitative method, more specifically unstructured interview, was employed to
supplement the quantitative analysis and in order to explore some issues in detail.

3.2.1 Study Population

A study population refers to the group one want to generalize to and the group from which a
sample is taken for in a study. In this study, the population from which a sample was drawn
consisted of OIB ATM service customers in Addis Ababa irrespective of their gender, age,
job grade or qualification.

3.2.2 Sampling Method

Sampling can be understood as the process by which some members of a population are
selected for observation or to collect data. The procedure followed and the number of
individuals or cases selected form a population is affected by several factors such as the
research design, the objective of the research, time and resource availability etc. Generally,
there are two competing sampling procedures, random sampling and non-random sampling.
Random sampling is the ideal sampling method if the research aims to generalize the result of
the study on the population, which demands the sample to be a representative of the
population as closely as possible. Alternatively, non-probability sampling procedures are used
either when probability sampling procedures are found to be difficult or when generalization
is not sought as the ultimate goal of a research.

Theoretically, probability sampling is the ideal sampling method for this study. However,
non-probability sampling, convenient sampling to be more precise was employed for the
purpose of this study. Convenient sampling refers to the collection of data from the general
population who are easily accessible and conveniently available to provide the required
information. In the context of the study population, convenient sampling is found to be
advantageous practically as well as economically to access the sample population for the
questionnaire.

First, a decision was made regarding the sample size of for the questionnaire. According to
the information obtained from the OIB‘s Electronic Banking Department Director, there were
around 44,200 ATMs card holders in Addis Ababa. Subsequently, the following formula was
used to calculate the simple size that was provided by Yamane (1967).

24
 N

n= 1+N (e) 2
Where: n is number of sample size
N is total number of study population
N

Using a margin error (e) of 6%, a sample size of 276 was generated for the study population.
However, considering customer‘s unwillingness to respond, the constraints of time and
financial resources and invalid response, the sample size was reduced to 250.

Then, a formal request was submitted to OIB management to obtain permission to distribute
the questionnaire for the OIB ATM customers. Upon receiving a formal permission, the
questionnaires were hand delivered to OIB ATM users who came to use OIB ATM service at
the time of data collection between July 25 and August 05, 2018. The questionnaires were
completed by customers at five different ATM stations in Addis Ababa, namely Africa
Godana branch ATM station (which is located at head office of the bank), Bole Medanyalem
area ATM station, Zerhun building ATM Station located in the Haile Gebresilase street,
ATM station at Wedesa Branch around Piaza and ATM stations at Gulele branch. These
branches were selected by the researcher purposively considering the high volume of ATM
transactions. Fifty questionnaires were allocated to each ATM stations and the questionnaires
were completed by customers who volunteered to complete the questionnaire on the spot.
This helped the researcher to attain 80% response rate in which all the questionnaires
prepared for the study, which means 200, were completed.

Although the sample size of the study population to measure OIB ATM service user‘s
satisfaction was made on the basis of generally accepted scientific guideline for determining
sample size decisions, certainly the sampling procedure employed in this research has some
inescapable limitations. The researcher acknowledges that, the drawbacks of employing
convenient sampling in this study is that it could lead to bias in the analysis of the study as
some groups of OIB ATM customers may be under-represented while other groups may be

25
over-represented. As a result, the interpretation of the research findings could be biased and
hence the trustworthiness of generalization questionable.

3.2.3 Designing the Questionnaire

As indicated in previous section, questionnaires were the primary data collection tools used in
this study. A questionnaire is a set carefully formulated written questions to which
respondents record the answers, usually within rather closely defined alternatives.
Questionnaires are an efficient data collection method when the researcher knows exactly
what is required and how to measure the variables of interest.

The structure of the questionnaire is adopted, without major modification, from previous
researches conducted to measure the level of ATM customers‘ satisfaction. For the purpose of
this study, a questionnaire comprising of three major categories of questions were used to
collect data from OIB ATM service customers.

The first category comprises a set of questions regarding the demographic characteristics of
respondents including their gender, age, marital status, occupational status, educational
qualification, frequency of ATM use, type of ATM service used and number of years as OIB
ATM service customer.

The second category, which is the main part of the questionnaire, consisted of a total of 25
items directly related to different aspects of ATM service. The 25 five items were further
categorized into five major dimension of ATM service, namely tangibles, responsiveness,
reliability, assurance, and empathy. Each category constituted four to five items on the basis
of which the level of ATM service customers‘ satisfaction on each dimension is examined.
The items in each dimensions were presented customers to indicate the level of their
agreement or disagreement using a five point Likert scale, where 1 equals to very disagree, 2
equals to disagree, 3 equals to neither agree nor disagree, 4 equals to agree, and 5 equals to
strongly agree was used. In short, the five dimensions of ATM service are treated as
independent variables which are believe to determine the dependent variable, which is the
level of ATM service customers.

26
The last, but not the least, part of the questionnaire consisted of two open ended questions.
These questions were added to offer opportunities for respondents to voice their concerns
which may not have been raised satisfactorily by the closed-ended items. The first open-ended
question asks customers to state the major problems they usually encounter when using OIB
ATM services. The second asks customers to forward their suggestion that can improve the
quality of OIB ATM service in the future.

3.2.4 Method of Data Analysis

The statistical package for the Social Science (SPSS) Version 20 was used to analyze,
compute and present the findings of the research by considering the main research questions
this study intended to answer at the outset.

First, descriptive statistics was used to present a descriptive summary of the quantitative data.
Descriptive statistics is a method for presenting quantitative descriptions in a manageable
form, describing a single variable or the associations that connect one variable with another.
Commonly, measures of central tendencies such as mean, mode and median are used to
calculate frequency of distribution for different categories and the result is presented using
tables, bar graphs, pie charts and histograms. This study uses tables to present a statistical
description the quantitative data from the questionnaires.

Secondly, Correlation analysis is performed to analyze weather there is relation between each
item of the five ATM service quality dimension. Moreover, it is performed to see the relation
between the five service quality dimension and customer satisfaction on ATM service
delivery.

Thirdly, anova were used to determine whether there are any statistically significant
differences between the means of independent variables. Last but not least the, one sample t-
test was used to test statistical difference between a sample mean and a known or
hypothesized value of the mean in the population.

While descriptive, correlation analysis, t-test and anova methods were used for structured
items, content analysis was used to analyze the data obtained from open ended questions.
Unstructured Interview; - an in-depth interview was made with seven managers of the bank.
Of these, 5 of them are branch managers from where quantitative data were collected and the

27
2 of them are head office senior managers who direct work relation with ATM service of the
bank. So, the data obtained through the interview was analyzed on the basis of a systematic
coding.

28
 CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND
INTERPRETATION

4.1 Introduction

The previous chapter provided a detailed discussion on the research design including the
study population, the sampling method and data collection instruments used. Further
explanation was also presented on the development of the data collection instrument, i.e. the
survey questionnaire and the contents constructed.
Whereas this chapter demonstrates the research investigation by outlining the results obtained
in the study and providing a detailed discussion of these results. The descriptive statistics
calculated for the study are presented in an outline of the characteristics of the sample with
regards to the variables included in the study. This chapter, therefore, presents an analysis of
the responses to the questionnaire. In the first part of the chapter data related to the
questionnaire, return rates and demographic questions are analyzed. The remainder of this
chapter will present the data found in the questionnaire.

4.2 Survey Findings

4.2.1 Validity Analysis

Carmines and Paul R. (1998), defines Validity is as how much any measuring instrument
measures what it is intended to measure. It‘s a critical aspect of measurement that must be
considered as part of an overall measurement strategy. Validity focuses on what the test or
measurement strategy measures. Admonitions such as those of Singer and McClelland (1990)
are particularly appropriate for newly collected data sets, which have not existed for long
periods of scholarly use and which have not been subjected to extensive reliability and
validity tests.

However, in this study the researcher adopted tested standard instruments to indemnify the
issue of data validity in the research process for each of the five ATM service and the overall
customer satisfaction regarding ATM.

29
4.2.2 Reliability Analysis

This quality criterion of the research refers to the consistency of a measure of a concept. This
quality criteria deals with the question whether the results of a study are repeatable (Bryman
and Bell, 2007). Cronbach‘s alpha is used in this study to assess the internal consistency
(reliability of the instrument (questionnaire). Cronbach‘s alpha is a coefficient of reliability
used to measure internal consistency of a test. Cronbach‘s alpha score ranges from 0 to
1.According to George & Mallery (2003) a Cronbach‘s alpha value > 0.9-Excellent, > 0.8-
good, > 0.7-accepteble, > 0.6 questionable,> 0.5 poor and < 5, unacceptable.

Table 1-Cronbach’s Alpha (Reliability analysis)

Dimensions Cronbach's Number of items

Alpha value

Tangibility .718 6
Reliability .778 6
Responsiveness .804 6
Assurance .751 3
Empathy .703 4
Overall scale reliability .888 25
Source: Compiled by author from SPSS version 20 result, 2018

Accordingly, the overall reliability of the scale is acceptable as its coefficient (0.888) is
greater than 0.7. Moreover, the scale consistency of each dimensions are also acceptable for
the reliability coefficient of tangibility, reliability, responsiveness, assurance and empathy are
of value 0.718, 0.778, 0.804, 0.751 and 0.703 respectively which are more than 0.7 and closer
to 1. Therefore, it is logical to conclude that reliability of the scales is acceptable as indicated
in the table 1.

4.2.3 Return Rates

To obtain the required sample size, 250 questionnaires were hand delivered to OIB ATM
service customers in five purposively selected ATM stations in Addis Ababa. All the
distributed questionnaires were returned as the respondents fill and return back on spot, of
those 50 questionnaires were invalid ones, which contained many blank answers. Therefore,

30
after removing 50 invalid questionnaires, 200 remained questionnaires were used for the
study. Return rates for each school was presented in table 2.

Table 2-Questionnaire Return Rates for Each ATM Stations

ATM Station Site Questionnaires Questionnaires Return

Distributed Returned Rate
Africa Godana Branch 50 46 92%
Bole Medanyalem 50 39 78%
Zerhun Building 50 41 80%
Wedesa Branch 50 40 80%
Gulele Branch 50 34 68%
Total 250 200 80%

4.2.4 Demographic Information

The following demographic information was obtained from the questionnaire regarding
participants:
o Gender distribution
o Age distribution
o Marital status
o Educational qualification
o Occupational status
o Monthly income
o Number of years as OIB ATM service customer
o Frequency of OIB ATM service use
o Type ATM service used
The descriptive statistics such as frequencies and percentages computed for each above listed
demographic variables are presented in the subsequent sections.
Table 3-Gender distribution of respondents

Gender Frequency Percentage

Male 147 73.5
Female 53 26.5
Total 200 100.0

31
Table 3 presents the gender distribution of the selected sample. As can be observed from table
3, the majority of the respondents were male. More specifically, 73.5% (n=147) of the
respondents were male, while only 26.5% (n=53) of the respondents were female. Table 3
shows that, more than 74% of ATM users were males. So, OIB needs to do more promotion
to attract female gender.

Table 4-Age distribution of respondents

Age category Frequency Percentage

18-25 23 11.5
26-30 101 50.5
31-40 56 28.0
41-50 20 10.0
Total 200 100.0

The second demographic information respondents provided was concerning their age. From
the frequency distribution presented in table 3, it may be deduced that 50.5% (n=101) of the
respondents were between 26-30 years of age, 28% (n=56) of participants were between 31-
40 years of age, 11.5% (n=23) of the respondents were between 18-25 years of age, and 10%
(n=20) of the respondents were above 41 years of age. Table 4, shows that more than 75% of
ATM users age ranges from 26-40 age and indicates that the bank‘s ATM service were more
preferred by younger social group. So, OIB needs to do more to create awareness among the
society at different age group.

Table 5-Educational Qualifications of respondents

Qualification Frequency Percentage

High School 27 13.5
Diploma 26 13.0
First Degree 117 58.5
Master‘s Degree & above 30 15.0
Total 200 100.0

Table 5 presents a summary of the educational qualification of respondents. As can be seen

the majority of the respondents, that is 58.5% (n=117) had a qualification level of first degree,

32
15% (n=30) of the respondents had educational level of Master‘s degree and above, 13.5%
(n=27) of respondents had a qualification level of high school and 13% (n=26) of respondents
had diploma. Therefore, the composition of the respondents exposed that the lion‘s share of
them were degree holders. This can be considered as a prospect to the bank that
communication becomes smoother than if the educational status could have been the other
way round. Moreover, it may be indicates that level of education matters in easy
understanding of the technology.

Table 6-Marital status distribution of respondents

Marital status Frequency Percentage

Married 142 71.0
Unmarried 58 29.0
Total 200 100.0

Table 6 present the frequency distribution of the respondents‘ marital status. From the marital
status frequency distribution in table 6, it may be seen that the majority of the respondents,
that is 71% (n=142) were married and 29% (n=58) of participants were unmarried. As shown
in the above table 6, the sample of the respondents is made up of 71% married, 29%
unmarried. This means that the majority of the respondents were married and also this
findings are consistent with the findings on age of the respondents which shows that majority
of the respondents were above 26 years of age.

Table 7-Occupational status distribution of respondents

Occupational status Frequency Percentage

Government employee 24 12.0
Private employee 137 68.5
Business men/women 14 7.0
Self-employed 14 7.0
Student 11 5.5
Total 200 100.0

Table 7 presents the frequency distribution of the occupation status of the respondents. Of the
200 respondents, the majority, that is 68.5% (n=137) of the respondents were private

33
employees, 12% (n=24) of the respondents were government employees, equal proportions of
respondents were business men/women and self-employed, that is 7% (n=14) each, and 5.5%
(n=11) of the respondents were students.

Table 8-Salary distributions of respondents

Salary Frequency Percentage

3001-5000birr 31 15.5
5001-10,000birr 48 24.0
above 10,000 birr 121 60.5
Total 200 100.0

From the frequency distribution in table 8, in terms of the salary distribution of the sample,
the majority of the respondents, that is 60.5% (n=121) earned above 10,000 birr per month,
24% (n=48) earned between 5,001-10,000birr per month, and 15% (n=31) earned less 5,000
birr per month.

4.3 Customers ATM Use Status

Table 9-Respondents Customer status distribution

Customer status Frequency Percentage

Less than a year 15 7.5
1-2 Years 25 12.5
2-3 years 33 16.5
4-5 Years 67 33.5
Above 5 years 60 30.0
Total 200 100.0

As can be seen from the frequency distribution in table 9, regarding the longevity of
respondents as OIB customer, the majority, that is 33.5% (n=67) had been OIB customers for
4-5 years, 30% (n=60) of the respondents had been OIB customers for more than 5 years,
16.5% (n= 33) of the respondents had been OIB customers for 2-3 years, 12.5% (n=25) of the
respondents had been OIB customers for 1-2 years and 7.5% (n=15) of the respondents had
been OIB customers for less than one year.

34
Table 10-Frequency of ATM service use distribution of respondents

Frequency of ATM Frequency Percentage

service use
Everyday 25 12.5
Every week 65 32.5
Every two or three weeks 63 31.5
Every month 13 6.5
Every two or three
34 17.0
months
Total 200 100.0

In terms of the frequency distribution of ATM service use status of the respondents, table 10
depicts that 32.5% (n=65) of the respondents had been using ATM service every week, 31.5%
(n=63) of the respondents had been using ATM service every two or three weeks, 17% (n=34)
of the respondents had been using ATM service every two or three months, 12.5% (n=25) of
the respondents had been using ATM service every day and 6.5% (n=13) of the respondents
had been using ATM service every month.

Table 11-Frequency distribution for ATM service use for cash withdrawal

ATM service use for cash Frequency Percentage

withdrawal
Regularly 62 31.0
Sometimes 92 46.0
Rarely 40 20.0
Never used before 6 3.0
Total 200 100.0

Table 11 presents a summary of how often customers use ATM service for cash withdrawal.
As can be observed from the table, the majority of participants, 46% (n=92), reported that
they sometimes use ATM for cash withdrawal whereas a minority of 3% (n=6), never used
use ATM for cash withdrawal.

35
Table 12-Frequency distribution for ATM service use for fund transfer

ATM service use for fund Frequency Percentage

transfer
Regularly 3 1.5
Sometimes 23 11.5
Rarely 16 8.0
Never 158 79.0
Total 200 100.0
With regard to customers‘ use of ATM service for fund transfer, table 12 presents the
frequency distribution of the selected sample. The majority of participants, that is 79%
(n=158), never used ATM service for fund transfer whereas the minority, that is 1.5% (n=3),
said that they regularly use ATM service for fund transfer. Table 12 shows that most of
cardholders of the bank do not use ATM for fund transfer, this may be due to lack of
awareness. So, the bank needs to do more promotion about the services.

Table 13-Frequency distribution for ATM service use for balance Inquiry

ATM service use for fund Frequency Percentage

transfer
Regularly 17 8.5
Sometimes 64 32.0
Rarely 21 10.5
Never 98 49.0
Total 200 100.0

Table 13 presents the frequency distribution of ATM service use for balance inquiry. As
illustrated, the majority, that is 49% (n=98), reported that they never used ATM service for
balance inquires, while the minority, that is 8.5% (n=17), of the participants reported that they
regularly use ATM service for balance inquiry. From this it can be said that out of the ATM
users of the bank around 49% do not effectively use the ATM to get balance inquiry. This
might have been caused by promotion related problems.

36
Table 14-Frequency distribution for ATM service use for mini statement

ATM service use for fund Frequency Percentage

transfer
Regularly 0 0
Sometimes 38 19.0
Rarely 24 12.0
Never 138 69.0
Total 200 100.0
Table 14 presents the frequency distribution of ATM service use of the selected sample for
mini statement. As can be observed more than half of the participants, that is 69% (n=138)
never used ATM service for mini statement, whereas19% (n=38), sometimes use ATM
service for mini statement. As it is shown in table 14 that, most of the ATM users didn‘t use
ATM for mini statement as 69% of the users never used before and 12 % rarely use the
service. This may be result from, less knowledge on the diverse functions the ATM may do
aside it being used for withdrawals. So, the bank has to do more on awareness creation about
the service customers get from ATM.

4.4 Descriptive Statistics

The survey was conducted on 200 respondents who are using ATM services of OIB in Addis
Ababa city. Respondents were asked about their perceived service quality on ATM service of
the bank against the 25 ATM service quality attributes that was adopted from previous study
(Charles Mwatsika, 2016). These ATM service quality attributes are classified into five
service quality dimensions (Parasuraman et al, 1988) that includes: tangibles, reliability,
responsiveness, assurance and empathy.
Table 15- Descriptive Statistics of Service Quality Dimensions

Mean Std. Deviation N

Assurance 3.3733 0.8951 200
Tangibility 3.2633 0.6638 200
Reliability 3.2217 0.6073 200
Responsiveness 2.9442 0.7457 200
Empathy 2.8601 0.7069 200
How do you rate your overall
satisfaction with OIB ATM 3.3202 0.8490 200
service?
Source: Compiled by author from SPSS version 20 result (2018)

37
The above table shows respondent‘s perception towards ATM service quality dimensions and
overall customer satisfaction with the bank‘s ATM. As clearly seen in the table 15, perception
of respondents on assurance, tangibility and reliability are 3.37, 3.26 and 3.22 respectively in
terms of mean score which have above average. On the other hand, responsiveness and
empathy have low perception with mean score of 2.94 and 2.86 respectively.

The mean perception of the customers on assurance score is 3.37. The mean score of
assurance is more than 3 which was marked as indifferent in the questionnaire but it is not
close to 4 which means respondents‘ somewhat agree that the bank is performing good is
the level of security, confidentiality and in providing advice about ATM usage.

Similarly, the mean perception of the respondents on the tangibility is 3.26 is the second
better dimension relatively, this is also above average mean score (3), which means that the
respondents‘ somewhat agree that the bank is performing good in cleanliness of ATMs and
stations areas, issuance of clean notes, issue readable slips and have good brand appearance.
On the other hand, two of tangibility attributes namely sufficient number of ATMs &
convenient locations were performed below the average mean score, which means customers
were not satisfied with those attributes.

Thirdly, ATM service quality perception of respondents on reliability scored 3.22 which are
slightly above mean average score (3). Respondents are fairly satisfied with speed, systems
usability, easily accessible and range of services they got from ATM. In contrast,
respondents‘ were not satisfied with ATM out of order and accuracy of transactions attributes
of reliability.

However, the mean perception of respondents‘ to ATM service quality dimension on

responsiveness and empathy are 2.94 and 2.86 respectively which are below the mean score
(3) which means the customers disagree that banking staff listen to the customers‘ problems
carefully and provide individualized attention to their concerns and demands, offer prompt
service, timely cash availability in ATMs, quick replacement of lost and Swallowed ATM
cards.

38
The mean score of overall customer satisfaction toward the bank ATM is 3.32, which is above
average mean score. This shows that respondents‘ are marginally satisfied with the quality of
services delivered by ATM of the bank.

Accordingly, among the variables, assurance has the highest mean value and empathyhas least
mean value. Therefore, it may be concluded from table 15 that respondents are most satisfied
with assurance and highly dissatisfied with empathy.

The following tables show details of frequencies of the core questions about the overall
customer satisfaction with the ATM service delivery of the bank, using the 5-point Likert
scale (starting with 1- Very dissatisfied, 2- Dissatisfied, 3-neutral, 4-Satisfied, and 5-Very
satisfied).

Table 16-Overall satisfactions with OIB ATM service

Frequency Percent Valid

Percent
Very dissatisfied 5 2.5 2.5
Dissatisfied 26 13 13
Netural 78 39 39
Satisfied 82 41 41
Very satisfied 9 4.5 4.5

Total 200 100 100

Source: Compiled by author from SPSS version 20 result (2018)

From the above table 16, the researcher categorized respondents to three categories, satisfied,
neutral and unsatisfied with their perception of ATM services service quality. So, the
researcher added satisfied with very satisfied and dissatisfied with very dissatisfied. So, from
the above table it can be observed that 15.5 % (2.5+13) of the respondent were not satisfied,
39 % were neither satisfied nor dissatisfied and 45.5% of the respondents were satisfied.

The following section presents the statistical frequency of the respondent‘s perception of OIB
ATM service quality.

39
Table 17-Respondent’s perception of OIB ATM service quality
variable N C*. H**. Std. T df Sig.
Mean Mean/Test Deviation
Value
Tangibility 200 19.5800 18 3.98283 5.610 199 .000
Reliability 200 19.3300 18 3.64383 5.162 199 .000
Empathy 200 11.4400 12 2.82779 2.801 199 .006
Responsiveness 200 17.6650 18 4.47469 1.059 199 .291
Assurance 200 10.1200 9 2.68545 5.898 199 .000
Overall Customer
200 78.1350 75 14.16545 3.130 199 .002
Satisfaction
C* = Calculated mean, ** Hypothetical mean,

Source: Compiled by author from SPSS version 20.0

Table 17 shows that the calculated mean, hypothetical mean, standard deviation and one
sample t-test statistics of variables. As indicated in table 17, the calculated mean score of
Tangibility was 19.58 with a standard deviation of 3.98 and the hypothetical mean score was
18. This means in 6 items of a 5-point Likert scale the possible score ranges from 6 (6 x 1 = 6)
to 30 (6 x 5 = 30) and the hypothetical mean score becomes 18 (6 x 3 = 18). The calculated
mean score was greater than the hypothetical mean score. One sample t-test result showed that
there was a statistically significant mean score difference between the hypothetical mean/test
value and calculated mean, t = 5.61, df = 199, p < 0.001. This implies that, in this study
participants‘ level of Tangibility in relation to the use of ATM was high or above average.

Similarly, the calculated mean score of reliability (19.33) was greater than the hypothetical
mean score (18) which implies that participants‘ level of Reliability in relation to the use of
ATM was high or above average. Regarding Assurance, the calculated mean score (10.12)
was greater than the hypothetical mean score (9) which again implies that participants‘ level
of Assurance in relation to the use of ATM was high or above average.

However, the calculated mean score of Empathy (11.44) was almost equal with the
hypothetical mean score (12) which implies that participants‘ level of Empathy in relation to
the use of ATM was moderate or average. Concerning responsiveness, the calculated mean

40
score (17.67) was less than the hypothetical mean score (18) which implies that participants‘
level of Responsiveness in relation to the use of ATM was low.

Finally the overall customer satisfaction related to the use of ATM was measured. As
indicated in table 13, the calculated mean score (78.14) was greater than the hypothetical
mean score (75), which implies that participants‘ level of overall customer satisfaction related
to the use of ATM service was high or above average.

4.5 Correlation Analysis

According to Reimann, Filzmoser, Garrett, and Dutter (2008) correlation analysis estimates
the extent of the relationship between any pair of variables. The correlation coefficient is a
measure of this relationship and depends on the variability of each of the two variables.
Because of covariance, correlation coefficient can take a number with + or – sign (Reimann
et.al, 2008). One of the widely-used methods to calculate a correlation coefficient is the
Pearson product moment correlation. This method result in a number between −1 and +1 that
expresses how closely the two variables are related, ±1 shows a perfect 1:1 relationship
(positive or negative) and 0 indicates that no systematic relationship exists between the two
variables (Reimann et.al, 2008). In relation to the magnitude of correlation coefficient, Cohen
(1988) stated that a correlation coefficient between 0.10 and 0.29 can be considered as small
or weak, from 0.30 to 0.49 medium and from 0.50 to 0.10 large or strong.

Table 18-Correlation analysis

Relationship among ATM SQ Dimension and Over All Customers‘ Satisfaction

Customer Tangibility Reliability Empathy Responsiveness

Satisfaction
Customer 1
Satisfaction
Tangibility .765** 1
** **
Reliability .851 .629 1
** ** **
Empathy .785 .457 .599 1
Responsiveness .839** .437** .606** .656** 1
Assurance .761** .489** .559** .507** .598**

**. Correlation is significant at the 0.01 level (2-tailed).

41
As it can be seen from table 18 above, all ATM service quality dimensions (tangibility,
reliability empathy, responsiveness and assurance) have significantly correlate to customer
satisfaction though the magnitude of the relationship differs among ATM service quality
dimensions.In light of this, reliability, responsiveness, empathy, tangibility and assurance
have a correlation coefficient value of 0.851, 0.839 0.785,0.765 and 0.761 respectively
showing the existence of significant and strong relationship with customer satisfaction.

Moreover, it shows correlation among variables. As we can see from table, there was a
statistically positive significant relationship among all variables. This implies that as one
variable increases, the other variable also increases and vice-versa. For instance the positive
correlation between tangibility and reliability implies that as tangibility increases, reliability
also increases and vice-versa.

Regarding the magnitude of correlation coefficients among variables is concerned, There was
strong correlation between Empathy and Responsiveness, r = 0.656, p < 0.01. The correlation
between Tangibility and Reliability was strong, r = 0.629, p < 0.01. Similarly, the correlation
between Reliability and Responsiveness, was also strong, r = 0.606, p < 0.01. In addition the
correlation between Reliability and Empathy (r = 0.599, p < 0.01), Reliability and Assurance
(r = 0.559, p < 0.01), Empathy and Assurance (r = 0.507, p < 0.01), Responsiveness and
Assurance (r = 0.598, p < 0.01) were also strong. However, the correlation between
Tangibility and Empathy (r = 0.457, p < 0.01), Tangibility and Responsiveness (r = 0.437, p <
0.01), and Tangibility and Assurance (r = 0.489, p < 0.01) were moderate.

42
 4.6 Mean score difference among groups of background on dependent
variables
Table 19-Mean Difference between Groups of Background Variables on Tangibility
Variable Group N Mean SD df F Sig.
Sex Male 147 19.4082 3.97553
1,198 1.033 .311
Female 53 20.0566 4.00200
18-25 23 17.3913 4.76483
26-30 101 19.9109 3.98522
3,196 3.134 .027
31-40 56 19.5000 3.93123
Age 41-50 20 20.6500 1.98083
high school 27 19.4074 2.30817
Educational Diploma 26 20.2308 .81524
3,196 .554 .646
level First degree 117 19.3419 4.61101
Master‘s degree 30 20.1000 4.18824
Married 142 19.7535 4.07237
1,198 .929 .336
Marital status Unmarried 58 19.1552 3.75477
Govt employee 24 19.7500 4.17289
Private employee 137 19.5036 4.39104
Occupation Business men/women 14 19.3571 2.40535 4,195 .119 .975
self-employed 14 19.7143 1.81568
Student 11 20.2727 .90453
3001-5000 31 20.3226 1.98976
Monthly 5001-10,000 48 19.8125 4.72502 2,197 .924 .399
income above 10,000 121 19.2975 4.04072

A one way between-group analysis of variance was conducted to explore whether there was a
statistically significant mean difference between groups of background variables on
Tangibility. Table 19 shows that there was a statistically significant tangibility mean score
difference between groups of background variable, age. However, there was no statistically
significant tangibility means score difference between groups of background variables like
sex, educational, level marital status, occupation and monthly income.

Post-hoc group comparison using Tukey HSD shows that participants in the age group of 26-
30 (M = 19.91, SD = 3.99) had significantly higher mean score than participants in the age
group of 18-25 (M = 17.39, SD = 4.76). Similarly, participants in the age group of 41-50 had
significantly higher mean score than participants in the age of 18-25. However, there was no
statistically significant mean score difference among the rest groups of Age.

43
Table 20-Mean Difference between Groups of Background Variables on Reliability
Variable Group N Mean SD df F Sig.
Sex Male 147 19.4082 3.78127
1,198 .254 .615
Female 53 19.1132 3.25612
18-25 23 19.4783 3.27344
26-30 101 19.5149 3.90029
3,196 .314 .815
31-40 56 19.1429 3.88671
Age 41-50 20 18.7500 1.48235
high school 27 16.5926 .57239
Educational Diploma 26 18.2308 .81524
3,196 8.750 .000
level First degree 117 20.1368 4.04907
Master‘s degree 30 19.6000 3.72873
Married 142 19.4014 3.82055
1,198 .187 .666
Marital status Unmarried 58 19.1552 3.19430
Govt employee 24 19.0000 3.36219
Private employee 137 20.0000 3.92016
Occupation Business men/women 14 17.0000 2.00000 4,195 5.347 .000
self-employed 14 16.5714 1.45255
Student 11 18.1818 .60302
3001-5000 31 18.2581 2.46262
Monthly 5001-10,000 48 19.6250 4.12891 2,197 1.622 .200
income above 10,000 121 19.4876 3.66996

A one way between-group analysis of variance was conducted to explore whether there was a
statistically significant mean difference between groups of background variables on
Reliability. Table 20 shows that there was a statistically significant reliability mean score
difference between groups of background variable, educational level and occupation.
However, was no statistically significant reliability mean score difference between groups of
background variables like sex, age, marital status and monthly income.

Post-hoc group comparison using Tukey HSD shows that participants having educational
level of highs school (M = 16.59, SD = 0.57) had significantly lower mean score than
participants having educational level of first degree (M = 20.14, SD = 4.05) and Masters‘
degree (M = 19.60, SD = 3.73). However, there was no statistically significant mean score
difference among the rest groups of educational level.

44
Regarding occupation of participants, post-hoc group comparison using Tukey HSD shows
that participants having occupation of private employee (M = 20.00, SD = 3.92) had
significantly higher mean score than participants working as business men/women (M =
17.00, SD = 2.00) and self-employed (M = 16.57, SD = 1.45). However, there was no
statistically significant mean score difference among the rest groups of occupation.

Table 21-Mean Difference between Groups of Background Variables on Empathy

Variable Group N Mean SD df F Sig.
Sex Male 147 11.4014 2.93225
1,198 .103 .748
Female 53 11.5472 2.53867
18-25 23 12.7826 2.69607
26-30 101 11.5347 2.68166
3,196 3.861 .010
31-40 56 11.2500 3.22631
Age 41-50 20 9.9500 1.63755
high school 27 9.2593 1.28879
Educational Diploma 26 9.3077 1.08699 17.96
3,196 .000
level First degree 117 12.3333 2.90659 5
Master‘s degree 30 11.7667 2.59553
Married 142 11.5704 2.94006
1,198 1.042 .309
Marital status Unmarried 58 11.1207 2.52759
Govt employee 24 10.2083 2.60400
Private employee 137 12.2701 2.77728
12.99
Occupation Business men/women 14 10.0000 1.00000 4,195 .000
5
self-employed 14 8.2857 .72627
Student 11 9.6364 2.11058
3001-5000 31 10.8065 2.37233
Monthly 5001-10,000 48 12.8958 2.93359 2,197 9.134 .000
income above 10,000 121 11.0248 2.71251

A one way between-group analysis of variance was conducted to explore whether there was a
statistically significant mean difference between groups of background variables on Empathy.
Table 21 shows that there was a statistically significant empathy mean score difference
between groups of background variable, age, educational level, monthly income and
occupation. However, there was no statistically significant empathy mean score difference
between groups of background variables like sex and marital status.

45
Concerning age, Post-hoc group comparison using Tukey HSD shows that participants in the
age group of 18.25 (M = 12.78, SD = 2.30) had significantly higher mean score than
participants in the age group of 41-50 (M = 9.95, SD = 1.64). However, there was no
statistically significant mean score difference among the rest groups of Age groups.

For educational level, Post-hoc group comparison using Tukey HSD shows that participants
having educational level of high school (M = 9.25, SD = 1.29) had significantly lower mean
score than participants having educational level of first degree (M = 12.33, SD = 2.91) and
Masters‘ degree (M = 11.77, SD = 3.73). Similarly, participants having educational level of
Diploma (M = 9.31, SD = 1.09) had significantly lower mean score than participants having
educational level of first degree (M = 12.33, SD = 2.91) and Masters‘ degree (M = 11.77, SD
= 3.73). However, there was no statistically significant mean score difference between
participants having educational level of high school and Diploma as well as First degree and
Masters.

As far as occupation of participants is concerned, post-hoc group comparison using Tukey

HSD shows that participants working as private employee (M = 12.27, SD = 2.78) had
significantly higher mean score than participants working as business men/women (M =
10.00, SD = 1.00), self-employed (M = 8.29, SD = 0.73), government employee (M = 10.21,
SD = 2.60) and student (M = 9.63, SD = 2.11). However, there was no statistically significant
mean score difference among the rest groups of occupation.

46
Table 22-Mean Difference between Groups of Background Variables on Responsiveness
Variable Group N Mean SD df F Sig.
Sex Male 147 17.7143 4.60345
1,198 .067 .796
Female 53 17.5283 4.13523
18-25 23 18.0435 4.45664
26-30 101 18.3762 4.84531
3,196 2.814 .040
31-40 56 16.9464 4.24015
Age 41-50 20 15.6500 1.56525
high school 27 13.7778 2.88675
Educational Diploma 26 15.0000 2.00000 16.43
3,196 .000
level First degree 117 18.9060 4.42754 7
Master‘s degree 30 18.6333 4.88829
Married 142 17.7183 4.62090
1,198 .069 .793
Marital status Unmarried 58 17.5345 4.13040
Govt employee 24 16.0000 3.84482
Private employee 137 19.0292 4.41078
14.51
Occupation Business men/women 14 13.7857 .80178 4,195 .000
2
self-employed 14 12.8571 2.17882
Student 11 15.3636 1.20605
3001-5000 31 15.8710 2.99713
Monthly 5001-10,000 48 19.1875 5.18450 2,197 5.578 .004
income above 10,000 121 17.5207 4.31876

A one way between-group analysis of variance was conducted to explore whether there was a
statistically significant mean difference between groups of background variables on
Responsiveness. Table22 shows that there was a statistically significant responsiveness mean
score difference between groups of background variable, age, educational level, occupation
and monthly income. However, no statistically significant responsiveness mean score
difference is found between groups of background variables like sex and marital status.

For age, Post-hoc group comparison using Tukey HSD shows that participants in the age
group of 26-30 (M = 18.38, SD = 4.85) had significantly higher mean score than participants
in the age group of 41-50 (M = 15.65, SD = 1.57). However, there was no statistically
significant mean score difference among the rest groups of Age.

Regarding educational level, Post-hoc group comparison using Tukey HSD shows that
participants having educational level of high school (M = 13.78, SD = 2.89) had significantly

47
lower mean score than participants having educational level of first degree (M = 18.91, SD =
4.43) and Masters‘ degree (M = 18.63, SD = 4.89). Similarly, participants having educational
level of Diploma (M = 15.00, SD = 2.00) had significantly lower mean score than participants
having educational level of first degree and Masters‘ degree. However, there was no
statistically significant mean score difference between participants having educational level of
high school and Diploma as well as First degree and Masters.

Concerning occupation of participants, post-hoc group comparison using Tukey HSD shows
that participants working as private employee (M = 9.03, SD = 4.41) had significantly higher
mean score than participants working as government employee (M = 16.00, SD = 3.84),
business men/women (M = 13.79, SD = 0.80), self-employed (M = 12.86, SD = 2.18), and
student (M = 15.36, SD = 1.20). However, there was no statistically significant mean score
difference among the rest groups of occupation.

Regarding monthly income, Post-hoc group comparison using Tukey HSD shows that
participants having monthly income between 3001-5000 birr (M = 15.87, SD = 3.00) had
significantly lower mean score than participants having monthly income between5001-10,000
birr (M = 19.19 SD = 5.18).However, there was no statistically significant mean score
difference between participants having monthly income between 5001-10,000 birr and above
10,000 birr.

48
Table 23-Mean Difference between Groups of Background Variables on Assurance
Variable Group N Mean SD df F Sig.
Sex Male 147 10.1633 2.73496
1,198 .143 .705
Female 53 10.0000 2.56455
18-25 23 10.5217 2.66065
26-30 101 10.1089 2.82100
3,196 3.498 .017
31-40 56 9.4464 2.61409
Age 41-50 20 11.6000 1.35336
high school 27 6.9630 1.72050
Educational Diploma 26 12.0769 .27175 23.27
3,196 .000
level First degree 117 10.3761 2.63833 7
Master‘s degree 30 10.2667 2.43443
Married 142 10.1479 2.70787
1,198 .053 .819
Marital status Unmarried 58 10.0517 2.65186
Govt employee 24 11.6250 2.37400
Private employee 137 10.3869 2.50954
16.23
Occupation Business men/women 14 7.2857 1.06904 4,195 .000
7
self-employed 14 6.7143 1.81568
Student 11 11.4545 1.80907
3001-5000 31 9.5484 2.82653
Monthly 5001-10,000 48 11.1250 2.71814 2,197 4.772 .009
income above 10,000 121 9.8678 2.55259

A one way between-group analysis of variance was conducted to explore whether there was a
statistically significant mean difference between groups of background variables on
Assurance. Table 23 shows that there was a statistically significant assurance mean score
difference between groups of background variable, age, educational level, occupation and
monthly income. However, no statistically significant assurances mean score difference was
found between groups of background variables like sex and marital status.

Regarding age, Post-hoc group comparison using Tukey HSD shows that participants in the
age group of 41-50 (M = 1.60, SD = 1.35) had significantly higher mean score than
participants in the age group of 31-40 (M = 19.45, SD = 2.61). However, there was no
statistically significant mean score difference among the rest groups of Age.

Concerning educational level, Post-hoc group comparison using Tukey HSD shows that
participants having educational level of high school (M = 6.93, SD = 1.72) had significantly

49
lower mean score than participants having educational level of Diploma (M = 12.08, SD =
0.27), first degree (M = 10.38, SD = 2.64) and Masters‘ degree (M = 10.27, SD = 2.43).
Similarly, participants having educational level of diploma had significantly higher mean
score than participants having educational level of first degree and Masters‘ degree. However,
there was no statistically significant mean score difference between participants having
educational level of First degree and Masters.

For occupation of participants, post-hoc group comparison using Tukey HSD shows that
participants working as private employee (M = 10.39, SD = 2.51) had significantly higher
mean score than participants working as business men/women (M = 7.29, SD = 1.07) and
self-employed (M = 6.71, SD = 1.82). Similarly, government employee (M = 11.63, SD =
1.37) had significantly higher mean score than participants working as business men/women
and self-employed. In addition, students (M = 11.45, SD = 1.81) had significantly higher
mean score than participants working as business men/women and self-employed. However,
there was no statistically significant mean score difference between participants working as
private employee and government employee, student and government employee as well as
private employee and student.

Concerning monthly income, Post-hoc group comparison using Tukey HSD shows that
participants having monthly income between 5001-10,000 birr (M = 11.45, SD = 2.72) had
significantly higher mean score than participants having monthly income between 3001-5000
birr (M = 9.55 SD = 2.83) and above 10,000 birr (M = 9.87 SD = 2.55). However, there was
no statistically significant mean score difference between participants having monthly income
between 3001-5000 birr and above 10,000 birr.

50
Table 24-Mean Difference between Groups of Background Variables on Overall Satisfaction

Variable Group N Mean SD df F Sig.

Sex Male 147 78.0952 14.62281
1,198 .004 .947
Female 53 78.2453 12.94352
18-25 23 78.2174 13.77731
26-30 101 79.4455 15.33980
3,196 .682 .564
31-40 56 76.2857 14.36500
Age 41-50 20 76.6000 4.93537
high school 27 66.0000 6.03834
Educational Diploma 26 74.8462 2.98921
3,196 10.285 .000
level First degree 117 81.0940 15.15778
Master‘s degree 30 80.3667 15.17367
Married 142 78.5915 14.76153
1,198 .507 .477
Marital status Unmarried 58 77.0172 12.63869
Govt employee 24 76.5833 13.61877
Private employee 137 81.1898 14.57462
Occupation Business men/women 14 67.4286 2.13809 4,195 8.278 .000
self-employed 14 64.1429 7.98900
Student 11 74.9091 3.01511
3001-5000 31 74.8065 10.87633
Monthly 5001-10,000 48 82.6458 16.96240 2,197 3.649 .028
income above 10,000 121 77.1983 13.36452

A one way between-group analysis of variance was conducted to explore whether there was a
statistically significant mean difference between groups of background variables on overall
customer satisfaction. Table 24 shows that there was a statistically significant overall
customer satisfaction mean score difference between groups of background variable,
educational level, occupation and monthly income. However, was no statistically significant
overall customer satisfaction means score difference between groups of background variables
like sex, age, and marital status.

Regarding educational level, Post-hoc group comparison using Tukey HSD shows that
participants having educational level of high school (M = 66.00, SD = 6.04) had significantly
lower mean score than participants having educational level of first degree (M = 81.09, SD =
15.16) and Masters‘ degree (M = 80.37, SD = 15.17). However, there was no statistically
significant mean score difference among the rest groups of educational level on the overall
customer satisfaction score.
51
Concerning occupation of participants, post-hoc group comparison using Tukey HSD shows
that participants working as private employee (M = 81.19, SD = 14.17) had significantly
higher mean score than participants working as business men/women (M = 67.43, SD = 2.14)
and self-employed (M = 64.14, SD = 7.99). Similarly, government employee (M = 76.58, SD
= 13.32) had significantly higher mean score than participants working as self-employed.
However, there was no statistically significant mean score difference among the rest groups of
occupation.

Finally as far as monthly income is concerned, Post-hoc group comparison using Tukey HSD
shows that participants having monthly income between 5001-10,000 birr (M = 82.65, SD =
19.69) had significantly higher mean score than participants having monthly income between
3001-5000 birr (M = 74.81 SD = 10.88) and above 10,000 birr (M = 77.20 SD = 13.36).
However, there was no statistically significant mean score difference between participants
having monthly income between 3001-5000 birr and above 10,000 birr.

4.7 Salient problems encountered by OIB ATM service users

As shown in the analysis of data from survey questionnaires, the level of OIB ATM service
users‘ satisfaction is generally high. This is good news despite the multitude of problems
commonly observed in ATM service due to poor infrastructure. In other words the current
level of customers‘ satisfaction does not entirely mean that there are no problems or the ATM
service is up to the level of customers‘ expectation. Data obtained from open-ended question
on the questionnaires distributed to the sample group has shown that there are a number of
problems ATM users encounter.

First, respondents were asked to write the three most frequent problems they encounter while
using OIB ATM service. A content analysis of the responses given by the sample respondents
is summarized in table 25.

4.8 Frequent Problems encountered by ATM customers of OIB

The most frequent problems encountered by ATM customers of the bank and the results of the
items of the section are presented and analyzed as follows, according to frequency of
problems faced by respondents;

52
Table 25-Frequent Problems encountered by ATM customers of OIB

No. Description of problems Frequency Percentage

1 Poor interconnectivity of ATMs‘ network 24 18.05
2 ATM out of service 20 15.04
3 Inadequacy of number of ATMs 16 12.03
4 Lack of sufficient cash balance on ATM 14 10.53
5 Failure to gate immediate response when ATM machine 14 10.53
deduct customers money and fails to dispense the cash
6 Debiting accounts without dispensing cash to customers 13 9.77
7 ATM location inconvenience 12 9.02
8 ATM swallow card and fails to return 7 5.26
9 OIB is not efficient in making quick delivery of ATM card 4 3.01
for new card application
10 Inability to get ATM service of OIB out of Addis Ababa. 3 2.26
11 ATM machines dispense poor cash notes 2 1.5
12 Long queues at ATM terminals 2 1.5
13 Fee charged at other bank. 1 0.75
14 Language of the ATM on the screen 1 0.75
Total 133 100

From the total 200 respondents only 133 of them provided a list of problems they frequently
face. As depicted in table 25 there are a number of problems that OIB ATM service users
encounter. Of the fourteen lists of problems listed, the three most frequently observed
problems include Poor interconnectivity of ATMs‘ network, ATM out of service and
insufficient number of ATM.

Secondly, respondents were also asked to forward their suggestions to improve the OIB ATM
service. Of the total respondent of 200 only 91 of them forwarded their suggestion outlining
what measures needs to be taken to improve the ATM service quality. A content analysis of
the responses are summarized and presented in table 26.

53
Table 26-Summery of respondent’s suggestion to improve OIB ATM the service

No. Recommendations Frequency Percentage

1 Put effective ATM management and maintenance programmes 23 25.27
to keep ATMs in good working order, produce accurate
transactions and well stocked with cash at all times so that
customers access banking products/services freely and easily
2 Increase the ATM machine access in every of their branches 19 20.88
and some Selected areas like hospital, shop and hotels.
3 Banks should intensify effort to deploy ATMs to some other 19 20.88
strategic places of the country, so as to ease the tension of
inadequacy of the machine in Addis and other regional towns.
4 Speed up in handling ATM issues such as return of cash when 17 18.68
ATM debit customer account but fails to dispense cash, fast
return of swallowed cards and quick replacement of lost cards
and Passwords.
5 Improve on the communication link by the banks negotiating 7 7.69
with Ethio Tel Com to avoid interruptions on which results in
communication break between the ATM and main server
resulting failure to process the transaction accurately.
6 The management of bank should ensure that officers in charge 6 6.59
of ATMs should always made enough cash available so as to
enable the machine dispense cash to customers whenever need
arises.
Total 91 100

As shown in table 26 respondents forwarded a wide range of recommendation on different

aspects of the ATM service which demands measures to improve the quality of the ATM
service. In order to improve the service quality of OIB ATM, ATM users made different types
of recommendation. Some of the major recommendations forwarded by respondents include
putting in place an effective ATM management and maintenance programmes; increasing the
number of ATM; installing ATM in other strategic places; speeding up in handling ATM
issues; and improving the quality of ATM network.

54
 4.9 Interview Findings

For the purpose of exploring the views of the service giver, that is OIB; unstructured
interview was conducted with seven senior OIB managers. Of these, 5 of them are Branch
Managers of the bank where quantitative data were collected from customers through
questioner and the remaining two of them are head office organs that directly the service will
concern (Director of E-Banking and Division Manager of Internet and Card Banking). All the
interviews were conducted from May 08 to 10, 2018. The interview data were analyzed on the
basis of a systematic coding. This type of analysis consists of a systematic coding (breaking
down) of data according to a code list, in such a way as to identify (practically and
theoretically) relevant patterns. The coded segments are then grouped and synthesized into
(more general) categories, which in turn get linked to more general themes and (theoretical)
concepts.

4.9.1 Major problems related to ATM Services obtained from interview

As per the interview data, the major problems mainly encountered by OIB ATM service users
includes ATM running out of service due to frequent power disruption and network
connection; ATM deducting money without dispensing cash; failure to promptly respond to
customers when they encounter problems during ATM service use; ATM service overload
due to insufficient number of ATM installed as compared the number of ATM service users;
and absence of OIB ATM service outside of Addis Ababa.

4.9.2 Sources of the ATM service problems obtained from interview

Discussion with senior OIB managers has not only been useful to explore ATM service
related problems but it also provided some insights on the sources of the problems observed
in relation to ATM services. As per the interview data, the major sources of ATM service
problems are;

Poor telecommunication infrastructure; Lack of infrastructure for telecommunications,

Internet and online payments impede smooth ATM transactions in Ethiopia. The bank‘s ATM
malfunctions mainly, due to ethio telecom‘s network failure or internal system failure. The

55
ATM relies on the bank communication network hence when the bank communication
network goes off line the ATM services become unavailable for customers use.

Frequent power disruption;-Interviewee claims that power disruption creates a lot of

problems in ATM activities which are basically depending on power supply and force the
banks to use generators resulting in high operational cost. Moreover, power disruption creates
system failure which may deter the machine from dispensing cash or from issuing payment
slips after transaction.

Negligence on part of staffs in replenishing cash with ATM; some branch didn‘t properly
follow the available cash in ATM and do not replenish timely that result in customer
dissatisfaction.

Customers lack of awareness about inter-operability ATMs; many customers didn‘t have
awareness about inter-operability of all banks ATMs with all others banks in the country and
they went distant to get OIBs ATM and forced to wait long queue at ATM stations that will
create inconvenience and dissatisfaction to customers.

Bureaucratic disputes handling among banks with regards to ATM problem;

bureaucratic dispute handling among banks when ATM issue arise, it will take a very long
time (nine up to thirteen days) to refund to a customer account when ATM deducts the
account of one customs‘ without dispensing cash while using ATM service using another
banks ATMs. It is also stated that most of the time no support is offered for customers for
technical failures or other ATM service related problems after working hours

4.9.3 Enhancing customers’ satisfaction obtained from interview

All interviewees acknowledged that the introduction of ATM service has been instrumental in
increasing the satisfaction of OIB customers. As per the interview data, ATM banking
services has given more satisfaction than ordinary banking because customer can get 24 hour
access to banking services, quicker and near to their residence. What‘s more, customers can
check their balance at any time without any fee. They also noted that the introduction of ATM
has reduced customers visit of the branch which could be seen from the transaction on ATM
and even some customers have been even totally do not visit the branch after they take the
personalized electronic card. It is stated that, the level of satisfaction intended to be provided

56
by ATMs, however, is reduced by technological and processing failures due to various
problems described earlier.

The interviewees finally forwarded a number of measures that needs to be taken in order to
enhance the satisfaction of ATM service users. Their suggestions by and large overlaps with
the suggestions gathered via the survey questionnaires. The suggestions put forward by all
interviewees include the following:
 Speeding up in handling ATM issues such as return of cash when ATM deduct customers
account but fails to dispense cash, fast return of swallowed cards and quick replacement of
lost cards and Passwords;
 ATM custodians need to be well trained in order to handle customer queries confidently
and competently;
 Enhancing the awareness level of customers about the inter-operability of all ATM
machines in the country;
 Always ensuring that officers in charge of ATM service are available to deal with
problems during as well as outside working hours.
 To put effective ATM management and maintenance programmes to keep ATMs in good
working order;
 Increasing the number of ATM in other areas; and
 Having own ATM switch.

57
 CHAPTER FIVE: FINDINGS, CONCLUSION AND
RECOMMENDATIONS

5.1. Introduction

Any business institution needs an element that helps it to be competitive in the market. The
most important thing that helps a business organization to be competitive in the market is to
continuously improve its customer service. Likewise, any banking institution aims to ensure
customer satisfaction and strengthen its relationships with customers. In order to achieve this,
it is necessary to use any opportunity that can help to improve the quality of customer service.
Modern technology plays an important role in maintaining customer competitiveness in the
banking industry.

Recently, the use of modern technology in the country‘s economy is growing. The banking
industry is one of the few sectors where modern technology is increasingly utilized to
modernize its operations. The banking sector is adopting new technologies to improve service
quality, expand its market base and maximize its economic efficiency. OIB is one of the
private banks engaged in private banking services. The bank is contributed to the expansion of
modern banking services in the country. The bank is investing in modern technology to
improve its banking service to meet the demands of its customers. For example, the use of
ATM banking service is an important component of this investment. It is a technology that
allows the bank to provide efficient, accessible, flexible and affordable banking services to its
customers.

OIB is developing strategies to expand their market and offer competitive service to stay in
the market. The use of advanced information technology is useful to provide competitive
service, to improve their customer service and thereby strengthen their relationships. As the
industry continues to grow, the competition between banks is growing. The bank is required
to provide a quality service to customers to cope up with the growing competition. The
growing use of ATM banking service is a major change in this regard. At present, ATM card
users can withdraw cash and transfer money from any bank. The major challenge remains that
the bank needs to cope up with the ever-growing demands of its customers.

58
The purpose of this study was to investigate the level of OIB ATM service customers‘
satisfaction in Addis Ababa. A survey questionnaire was distributed to two hundred
customers to collect their opinion on five dimensions of ATM service quality. In addition,
unstructured interview was conducted with two senior OIB managers to explore some issues
in detail. This chapter provides a summary of the major findings of the research, the
conclusion drawn and finally, some suggestions that can improve the quality of OIB ATM
service.

5.2. Research Findings

The major findings of the study are the following:

The descriptive analysis conducted with the aim of assessing the level of OIB ATM service
quality dimensions and its effect on customer satisfaction. On the base of the finding of mean
value of all the dimensions of ATM service quality indicated in table-15, assurance is better
followed by tangibility and reliability with a mean score value of 3.37, 3.26 and 3.22
respectively. Responsiveness and empathy are below the average mean value with mean score
of 2.94 and 2.86 respectively. The mean score of overall customer satisfaction toward the
bank ATM is 3.32, which is above average mean score. This shows that respondents‘ are
marginally satisfied with the quality of services delivered by ATM of the bank. Besides, the
frequency table 16 showed that, 15.5 % of the respondents were not satisfied, 39 % were
neither satisfied nor dissatisfied and 45.5% of the respondents were satisfied.

Correlation coefficient statistics shows that all ATM service quality dimensions; reliability,
responsiveness, empathy, tangibility and assurance have a positive and significant relationship
with overall customer satisfaction with coefficient value of 0.851, 0.839 0.785, 0.765 and
0.761 respectively. Hence, ATM service quality attributes perceived by customers does have
significant influences on customer satisfaction, supporting the research model. Moreover, the
finding also indicated that there is a positive and significant relationship among independent
variables where in a relatively stronger correlation observed between empathy and
responsiveness and tangibility and reliability with coefficient value of 0.656 and 0.629
respectively. In the same way, the correlation between reliability and responsiveness,
reliability and empathy, reliability and assurance and empathy and assurance were also strong
with coefficient value of 0.606, 0.599, 0.559 and 0.507 respectively. However, the correlation

59
between tangibility and empathy, tangibility and responsiveness and tangibility and assurance
were moderate with coefficient value of 0.457, 0.437, and 0.489 respectively.

The one-way analysis of variance (ANOVA) was conducted to explore whether there was a
statistically significant mean difference between groups of background variables and reveled
that;

 A statistically significant difference was observed in the level of satisfaction among

customers of different age groups on tangibility dimension of ATM service quality.
However, no difference was observed in the level of satisfaction among other
background variables.
 A statistically significant difference was observed in the level of satisfaction among
customers of different level of education and occupation on reliability dimension of
ATM service quality. However, no significant difference was observed in the level of
satisfaction among other background variables.
 A significant difference was observed in the level of satisfaction among customers of
different age group, level of education, occupation and income on assurance
dimension of ATM service quality. However, no significant difference was observed
in level of satisfaction among other background variables.
 A statistically significant difference was observed in the level of satisfaction among
customers of different age group, level of education, occupation and monthly income
on responsiveness dimension of ATM service quality. However, no statistically
significant difference was observed in the level of satisfaction between groups of
background variables.
 A statistically significant difference was observed in the level of satisfaction among
customers of different level of age, education, monthly income and occupation on
empathy dimension of ATM service quality. However, no statistically significant
difference observed in the level of satisfaction among other background variables.

Even though, overall descriptive data revealed that, ATM users of the bank were marginally
satisfied with ATM service of the bank, the interview response indicated at that the customers
of the bank are not happy with some of ATM attributes like ATM out of service; ATM
deducts money without dispensing cash, lack of promptly response, number of ATM and
inaccessibility of ATM out of the city.

60
 5.3. Conclusion

On the one hand, the expectation of customers is changing as a result of economic and
technological changes; on the other hand the competition between banks is growing. This
changes demands that banks to pay attention to improve consumer service qualities. OIB bank
has been investing in e-banking technologies which are of great value to satisfy the needs of
its customers. No wonder that the bank has made some success in this regard over a very short
period of time. The number of ATM card users can be taken as a good example. Nonetheless,
the main issue remains to be able to provide quality services that match customers'
expectation. The question of how much the bank‘s ATM service quality satisfies its customers
expectation is a question that needs to be answered. This study has attempted to answer this
question. Thus, based on the findings of the study, the following conclusions can be made.

The study concludes that:

1. On the whole, OIB ATM customer‘s level of satisfaction was slightly positive with
mean score of 3.32, which is above average mean score 3, but the result showed that
the bank has much to do to improve its ATM service quality in the future.
2. Though the overall level of customers in all ATM service quality dimensions appears
to be close to average, their level of satisfaction in responsiveness and empathy
dimensions of ATM service quality was relatively lower than the other three
dimensions and below the average mean score. Therefore, it can reasonably be argued
that these two service quality dimensions have significantly impacted customer level
of satisfaction.
3. All the five ATM service quality dimensions significantly associate with customer
satisfaction.
4. There is a positive and significant relationship among independent variables empathy
and responsiveness, tangibility and reliability, reliability and responsiveness,
reliability and empathy, reliability and assurance and empathy and assurance.
However, correlation between tangibility and empathy, tangibility and responsiveness
and tangibility and assurance were moderate.
5. The banks performance in addressing the often problems encounters by its ATM
service customers was below the expectations of consumers.

61
It is undeniable that the expansion of ATM service over the past few years has helped OIB to
improve its customer‘s service. Owing to the structural problems of underdevelopment in
major infrastructures in the country, the bank‘s ATM banking service quality is far from
satisfactory. Although some of the problems customers experience can be beyond the capacity
of the bank to address in the immediate terms, there are a number of problems that can be
solved with the capacity of the bank and thereby improve its ATM service quality. The result
of this study has shown that a lot needs to be done to improve the quality of the bank's ATM
service. This research offers some suggestion that can help to improve the quality of OIB
ATM service quality.

5.4. Recommendations

Based on the findings and conclusions of the study, the following recommendations are
forwarded to the management of the bank.

Assurance dimension, the research finding revealed that respondents‘ were most satisfied with
privacy, security of the bank‘s ATM and advice they got about ATM usage. Even though, the
bank is performing relatively well with assurance dimension, it needs to continual improve all
assurance dimensions to be competent in the industry.

Tangibility dimension is one of the most important factors influencing customer satisfaction in
this research finding and respondents‘ were relatively satisfied next to assurance with this
dimension. But, customers are not satisfied with number of ATMs and convenience of ATM
locations. So, the bank should deploy new ATM in strategically selected areas. Furthermore,
the bank should enhance the awareness level of customers about the inter-operability of all
ATM machines in the country.

Reliability dimension is one of the most important factors influencing customer satisfaction in
this research finding. However, the customers of the banks are less satisfied with some of
reliability attributes, like ATM out of service and deduct money from the account without
actually dispensing money. So, to solve those issues the bank have to put effective ATM
management and maintenance programmes to keep ATMs in good working, and to have
power back up to avoid sudden system failure that may deter the machine from dispensing
cash.

62
Responsiveness dimension is one of the most important factors influencing customer
satisfaction in this research finding. However, the customers of the banks are less satisfied
with most of responsiveness attributes, like cash availability in ATMs, promptly replacement
and return of lost and swallowed ATM cards and employee responsiveness to ATM problems.
To overcame those problems the bank should have to put effective ATM management to
avoid ATM out of cash, to place enough human resources and also improve the capabilities,
knowledgeable, professional and equipped with soft skills i.e. communication skills and sales
skills. Simultaneously, the Bank staff should also have good service attitude, be polite,
enthusiastic to meet customer‘s expectation and to shape positive behavior and attitude in
customer service among their employees. Therefore the Bank needs to train and equip its
support employees related with ATM service in order to handle customer queries confidently
and competently, because employees‘ effectiveness and speed in handling ATM issues will
increase customer‘s confidence in the Bank.

Regarding empathy dimension customers of the bank were less satisfied in terms of the
employee‘s friendliness, ATM card application, and accessibility of bank employees to ATM
problems. To solve this problem, the bank has to give training for employees about customer
service, make card application process easier and assign permanent staff that follow and
respond to customer‘s problem.

The last, but not the list, the bank needs to constantly improves service quality to enhance
customer satisfaction.

5.5. Recommendation for Future Research

ATM banking services have become one of the most popular channels for accessing banking
products/services behind branch banking. In spite of it numerous advantages there have been
some challenges which hinders it optimum usage both to the customers and the bank
themselves. The challenges associated with ATM service are so large that a single study could
not discover all. Again, due to limited resources and time this study could only sample oromia
International Bank s.c even though the study could have covered a wide setting.

In view of the above, the researcher recommends that funds be made available for the study to
be replicated in the other banks since the findings of the current study indicated that there are
varied challenges as well as advantages with ATM services. Recommendations from such a

63
study would lead to a much better administration and patronage of electronic banking product
for economic growth and development.

64
 Reference
Abraham H.(2012).Challenges and Opportunities of Adapting electronic banking in Ethiopia.

Al-Hawari, M. and Ward, T. (2006).The impact of automated service quality on financial

performance and the mediating role of customer retention.Journal of Financial Service
Marketing. 10(3), pp. 228-43.

Anderson, C and Zeithaml, C P (1984). ―Stage of the Product Life Cycle, Business Strategy,
and Business Performance,‖ Academy of Management Journal, 27 (March), 5-24.

Anderson, E W, Fornell, C and Lehmann, D R (1994). ―Customer Satisfaction, Market Share

and Profitability: Findings from Sweden,‖ Journal of Marketing, 58(3), 53-66.
Anyanwaokoro, M. (1999) Theory and Policy of Money and Banking, Enugu, Nigeria:
Hossana Publications.

Ayo, C. K.; Adewoye, J. O. & Oni, A. A. (2010): The state of e-banking implementation in
Nigeria, a post consolidation review, Journal of emerging trends in economics and
management science (1): 37-45

Babakus, E and Boller, G W (1992).―An Empirical Assessment of the Servqual Scale,‖

Journal of Business Research, 24(3), 253-68.

Balogun, O.J., Ajiboye, F.A. &Dunsin, A.T. (2013).An Investigative Study on Factors
Influencing the Customer Satisfaction with E-Banking in Nigeria.International Journal of
Academic Research in Economics and Management Sciences, 2(6) Pp. 64-73.

Banker, R. D. and Kauffman, R. J. (1988). Strategic contributions of information technology:

An empirical study of ATM networks, proceedings of the ninth International Conference for
Information Systems, Minneapolis, MW.

Banker, R., Bardhan, S., Lin, H., & Chang.(2006). Plant Information Systems, Manufacturing
Capabilities and Plant Performance. MIS Quarterly.

Bitner, M. J.; Hubbert, A. R. 1994.Encounter satisfaction versus over satisfaction versus

quality. In the service quality: new directions in theory and practice, in R. T. Rust, R. L.
Oliver(Eds). Thousand Oaks: Sage Publication, 79–84 p.

65
Boulding, W; Kalra, A, Staelin, R and Zeithaml, V A (1993). ―A Dynamic Process Model of
Service Quality: From Expectations to Behavioral Intentions,‖ Journal of Marketing
Research, 30(February), 7-27.

Bryman, A. & Bell, E. (2007).Research Designs. In: Business Research Methods. New York.
Oxford University Press. P. 44-7

Burnham, B. (1996). The Internet‘s Impact on Retail Banking: Booz-Allen Hamilton, pp. 1-10.

Buzzell, R D and Gale, B T (1987). The PIMS Principles, New York: The Free Press.

Carmines, Edward G., and Richard A. Zeller (1998) Reliability and validity assessment,
Newbury Park, CA: Sage Publications

Charles Mwatsika. Impact of ATM Banking Performance on Customer Satisfaction with the Bank
in Malawi. International Journal of Business and Economics Research.Vol.5, No. 1, 2016.

Cheng, T. (2006). Adoption of internet banking: An empirical study in Hong Kong. Decision
Support Systems.

Cohen, J.W. (1988). Statistical Power Analysis for behavioral science.(2nd edn). Hillsdale,
NJ: Lawerance Erlbaum Associations

Crane, D.B and Bodie, Z. 1996, From Follows Function: The Transformation of Banking,
Harvard Business Review, Vol. 74 (2): 109-117

Cronin, J.J. and Taylor, S.A. (1992).Measuring service quality: A re-examination and
extension. Journal of Marketing, 56, July, pp. 55-68

Crosby, P B (1984). Paper presented to the ―Bureau de Commerce,‖ Montreal, Canada

(Unpublished), November

Dabholkar, P. A., Shepherd, C. D. and Thorpe, D. I. (2000), ―A comprehensive framework for

service quality: an Investigation of critical conceptual and measurement issues through a
longitudinal study‖, Journal of Retailing, Vol. 76 No. 2, pp. 131-139.

Daniel, E. (1999). Provision of electronic banking in the UK and the Republic of Ireland.
International Journal of Bank Marketing, 17(2), 72-82

66
Dzogbenuku RK. Banking innovation in Ghana: Insight of students‘ adoption and diffusion. J.
Internet Bank. Commer.2013; 18(3).

Edvardsson, B.; Thomasson, B.; Ovretveit, J. 1994. Quality of service– Making it really work.
1st ed. Berkshire: McGraw-Hill Book Company Europe.

Eiglier, P and Langeard, E (1987).Servuction, Le Marketing des Services, Paris:McGraw-Hill.

Ethswich S.C financial statement and Audit report 2017

George, D., & Mallery, P. (2003). SPSS for Windows step by step: A simple guide and
reference. 11.0 update (4th ed.).

Fenuga OJ (2010). The effect of electronic payment on customer service delivery.

International Journal of Economic Development Research and Investment.

Fishbein, M. and Ajzen, I. (1975).Belief, attitude, intention and behaviour: An introduction to

theory and research. Addison-Wesley, Reading, Massachusetts.

Fornell, C. (1992). A National Customer Satisfaction Barometer: The Swedish Experience.

Journal of Marketing, 56 (January), 6-21

Gardachew, W 2010, ` Electronic -banking in Ethiopia: practices, opportunities and

Challenges‘, Journal of internet Banking and commerce,15(2):2-9

Garvin, D A (1983). ―Quality on the Line,‖ Harvard Business Review, 61(September-

October), 65-73.

Glaser, P. F. (1988). Using technology for competitive advantage: the ATM experience of
Citicorp in managing innovation cases from services industries. Guide, B. R. and Quinn, J. B.
(eds) National Academy Press, Washington DC pp 108–114.

George, D., & Mallery, P. (2003). SPSS for Windows step by step: A simple guide and
reference. 11.0 update (4th ed.). Boston: Allyn& Bacon.

Gezahegn Bacha (2015). Assessment of customer satisfaction with ATM banking: Empirical
evidence from Selected Commercial Banks in Ethiopia.

Halstead, D., David H., and Sandra L.S. (1994).Multisource effects on the satisfaction
formation process. Journal of the Academy of Marketing Science, 22 (spring): 114-129.
67
Howells, P. (2008). The Economics of Money, Banking and Finance. Pearson Education
Limited.

Hudson, S.; Hudson, P.; Miller, G. A. 2004. The measurement of service quality in the tour
operating sector: a methodological comparison, Journal of Travel Research 42(3): 305–312.

Juan and Gupta (2004). Measuring Service Quality: SERVQUAL Vs. SERVPERF Scales
Vikalpa• Volume 29 • No 2 • April - June 2004

Johnston, R. (1997).Identifying the Critical Determinant of Service Quality in Retail Banking:

Importance and Effect. International Journal of bank marketing, Vol.15(No.4), pp. 111-116.

Juran, J M (1988).Juran on Planning for Quality. New York: The Free Press.

Klingebiel Daniela (2002). Electronic Finance. A New Approach to Financial Sector

Development. World Bank Discussion Paper No. 431.Washington D.C.

Kotter Philp (2003) Marketing Management, eleventh edition.

Kotler, P and Armstrong, G (2005) “Principles of Marketing” (Eleventh edn), p13, Prentice
Hall, New Delhi, India

Kotler, Ph.; Wong, V.; Saunders, J.; Armstrong, G. 2005.Principles of marketing. 4th ed.
Prentice Hal

Kotler, P and Keller, K, L (2006) ―Marketing Management‖ (twelve edn), pp144-146,

Prentice Hall, New Delhi, India

Kumbhar V.M. (2011). Factors affecting customer satisfaction: Some evidence from Indian
banks, Management research and practice.

Laderman, F. S. (1990). The public policy implications of state laws pertaining to Automated
Teller Machines.Economic Review (Federal Reserve Bank of San Francisco pp. 43–58.

Lemma Belay (2017) The Effect of ATM Service Quality on Customer Satisfaction:
Evidences from Customers of Ethiopian Commercial Banks in Debremarkos Town

68
Lewis, R.C. and Booms, B.H. (1983).The marketing aspects of service quality.Emerging
perspectives in service marketing, In Berry, L.L., Shostack, G. and Upah, G. (eds.) American
Marketing Association.Chicago, IL pp. 99-107.

Mishra R. and J.Kiranamai. (2009). E-banking: A case of India. Icfai University, Journal of
publication Administration.Vol.5, No.1, pp.55-65.

Mohammed-Aminu, S., &Arhin, E. (2011).Using ATMs as Workload Relievers for Ghanaian

Bank Tellers: The Customer Behavioural Challenge. Journal of Economics and Behavioural
Studies, 3 (1), 13-21.

Mols, N.P. (1998).The behavioral consequence of PC banking. International Journal of bank

marketing 16(5), pp.195-201.

Normann, R (1984). Service Management. New York: Wiley.

Parasuraman, A. 1985. A conceptual model of service quality and its implications for future
research, Journal of Marketing 49: 41–50.

Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1988). SERVQUAL: A multiple-item scale
for measuring consumer perceptions of service quality. Journal of Retailing, spring, pp. 12-40

Pham, N. Th.; Nguyen, H. Ph. 2007. SERVQUAL versus SERVPERF– a comparative study
in Vietnamese supermarket, Science and Technology Development 10(8): 1–30.

Philipos Lamore Bambore (2013). Customer satisfaction and electronic banking service on
some selected banks of Ethiopia.

Phillips, L W, Chang, D R and Buzzell, R D (1983). ―Product Quality, Cost Position and
Business Performance: A Test of Some Key Hypothesis,‖ Journal of Marketing, 47 (Spring),
26-43.
Phong Nham, Chi Phan(2015).The Impact of service quality on customer satisfaction of
automated teller machine service: case study of a private commercial joint stock bank in
Vietnam.

R.K.Uppal,.and RimpiJantana.(2007).E-banking in India: challenges and opportunities,pp.266

Rasiah, R.( 2010) Industrialization in the second-tier NIE, in R. Rasiah; D.J. Schmidt
(eds):The new political economy of Southeast Asia (Cheltenham, Edward Elgar), pp. 44–102

69
Reimann,R. C., Filzmoser,P., Garrett, R. G., & Dutter, R.(2008). Statistical Data Analysis
Explained: Applied Environmental Statistics. John Wiley & Sons, Ltd.

Rose, Peter S., (1999) ―Commercial Bank Management‖(4th Ed), Irwin/McGraw- Hill,
Boston, USA.
Rust, R T and Oliver, R L (1994). Service Quality — New Directions in Theory and Practice,
New York: Sage Publications

Singer, J. David (1990) "Variables, indicators, and data: the measurement problem in macro
political research." In Singer and Paul F. Diehl, eds. Measuring the correlates of war. Ann
Arbor: University of Michigan Press, pp. 3-28.

Shaw, J (1978). The Quality - Productivity Connection, New York: Van Nostrand

Shittu Olorunsegun. (2010).The impacts of electronic banking in Nigeria banking system.

Sureshchandar G.S., Rajendran C, and Anantharaman R.N.; 2002, ―the relationship between
service quality and customer satisfaction – a factor specific approach‖; Journal of Services
Marketing; 16(4), 363 – 379

Tirhas G/tsadkan, Fasil Damtew, Addis Beyene (2017); Assessment of Customer Satisfaction
on Automated Teller Machine in Adigrat, Ethiopia.

Tse, David K. and Peter, C. Wilton; 1988, ―Models of Consumer Satisfaction: An Extension‖;
Journal of Marketing Research; 25 204-212.

United Nations Conference on Trade and Development (UNCTAD) (2000), E-Commerce and
Development Report 2002 (New York & Geneva: United Nations).

Zhou, L. 2004. A dimension-specific analysis of performance only measurement of service

quality and satisfaction in China's retail banking, Journal of Services Marketing 18(7).

70
Annex
Annex 1 Questionnaire for ATM users

QUESTIONNAIRES FORM OF STUDY SURVEY

ADDIS ABABA UNIVERSITY COLLEGE OF BUSINESS & ECONOMICS

DEPARTMENT OF MANAGEMENT, EMBA PROGRAM

Dear Respondent,

This study will undertake to understand the Impact of E-Banking Service via ATM service on
Customers Satisfaction in the Banking Industry in Ethiopia case of Oromia International Bank
customers who are currently using ATMs of the bank in Addis Ababa city as Partial
Fulfillment of the Requirements for the Award of the Degree of Executive Masters of
Business Administration of Addis Ababa University.
The questions will ask about general information about you, performance of ATM, the
problems you experiences while using the service, your views regarding the compliant
response about ATMs and your general satisfaction level towards ATMs service of OIB.

The information that you provide will help to understand the status of ATM service
customer‘s satisfaction in the country by systematically examining the level of OIB ATM
service customer‘s satisfaction in Addis Ababa; the problems customers experience during
ATM services uses; and the factors contributing ATM service problems. The questions will
take few minutes to complete.

Here I kindly request you to attempt all the questions in the questionnaire to meet the aim of
the study. Whatever information is provided will be treated with utmost confidentiality and
strictly will be used for academic purpose only. There is no need to write your name.

Thank you for your participation

Best regards,

Habte Ashenafi,

EMBA student at Addis Ababa University college of Business and Economic

ii
Questionnaire for ATM users

I. Part 1. Demographic information

Please put right mark (√) in front of your choice box that express yourself.
.(እ ባ ክ ዎትን ለ ተጠቀ ሱትጥያ ቄ ዎቸዎችመል ስ የ ሚስ ማማዎትን አ ን ዱላ ይራይት(√)
ምል ክ ትያ ድር ጉ ባ ቸው፡ ፡ )
1. Gender(ጾ ታ)
Male (ወን ድ) Female (ሴት)
2. Age(እ ድሜ)

18 - 25years (አ መት)  26 - 30 years (አ መት)  31 – 40 years (አ መት)

41 – 50 years (አ መት) 51 – 60 years  above (ከ ) 60 years (አ መትበ ላ ይ)

3. Education (የ ትምህር ትደረ ጃ)
Illiterate (ያ ል ተማረ ) High School (የ ሁለ ተኛ ደ ረ ጃየ ጠና ቀ ቀ ) Diploma
(ዲýሎማ)  Degree (ዲግሪ )Masters Degree (ማስ ተር ስ )
Others (please specify)(ሌላ ካ ለ ይጥቀሱ) ____________.
4. Marital Status (የ ጋቻሁኔ ታ)
Married ( የ ገ ባ ) Un married(ያ ላ ገ ባ )
5. Profession ( ሙ ያ)
Govt Employee (የ መን ግስ ትተቀ ጣሪ ) Private Employee (የ ግል ድር ጅትተቀ ጣሪ ) 
Business (ነ ጋ ዴ) Self Employed ( በ ራሱሰ ራየ ሚተዳ ደ ር )
Student(ተማሪ ) House Wife (ቤትእ መቤት)
6. Monthly Income (ወራዊገ ቢ)
Below (ከ በ ታች) 1,500 1,501-3,000 3001-5,000
5001-10,000 above 10,000 
II. Part 2.General question
1. How long you have been the customer of OIB?
የ ኦ ሮሚያኢንተር ና ሽና ልባን ክደን በኛከሆኑ ምን ያክልጊ ዜሆኖት?
Less than 1 year (አ መት)  1-2 yrs (አ መት)  2-3 yrs (አ መት) 4-5
yrs(አ መት)  above 5 years (ከ 5 አ መትበ ላ ይ)
2. How long you have been using OIB ATM service?
የ ኦ ሮሚያኢንተር ና ሽና ልባን ክኤቲኤምአ ገ ልግሎትተጠቃሚከ ሆኑ ምን ያ ክ ል ጊ ዜሆኖት?
Less than 1 year ( ከ አ ን ድዓ መትበ ታች)  above one year( ከ አ ን ድዓ መትበ ላ ይ) 
3. How frequently do you use OIB ATM service?
(በየ ምን የ ክልጊ ዜውሰጥነ ውየ ባን ኩንኤቲኤምየ ሚጠቀሙ ት?)
Every day (በ የ ቀ ኑ )
Every week (በ እ የ ሳ ምን ቱ)
Every two or three weeks ( በ ሁለ ትሳ ምነ ትወይምበ ሶ ሰ ትሳ ምን ትጊ ዜ)
Every month (በ እ የ ወሩ )
Every two or three month (በ እ የ ሁለ ትወሩ ወይምበ የ ሶ ስ ትወሩ ) 

iii
4. How often you use the following ATM services?
ከታችየ ተዘ ረ ዘ ሩትንየ ኤቲኤምአ ገ ልግሎቶችበየ ምን ያህልጊ ዜይጠቀማሉ?
 Cash withdrawal(ገ ን ዘ ብወጪማድር ግ) – Regularly (በ የ ጊ ዜው)
Sometimes(አ ላ ፎአ ል ፎ) Rarely(እ ን ብዛ ምአ ል ጠቀ ምም) Never
(እ ስ ካ ሁን ተጠቅሜአ ለ ውቅም)

 Fund Transfer(ከ ሂ ሳ ብወደ ሂ ሳ ብብር ማስ ተላ ለ ፍ) –Regularly (በ የ ጊ ዜው)

Sometimes(አ ላ ፎአ ል ፎ) Rarely(እ ን ብዛ ምአ ል ጠቀ ምም)
Never (እ ስ ካ ሁን ተጠቅሜአ ለ ውቅም)

 Balance enquiries(ባ ላ ን ስ መጠየ ቂ ያ )–Regularly (በ የ ጊ ዜው)

Sometimes(አ ላ ፎአ ል ፎ) Rarely(እ ን ብዛ ምአ ል ጠቀ ምም)
Never (እ ስ ካ ሁን ተጠቅሜአ ለ ውቅም)
 Mini statement(ሚኒ እ ስ ቴትመን ትማውጣት)– Regularly (በ የ ጊ ዜው)
Sometimes(አ ላ ፎአ ል ፎ)
Rarely(እ ን ብዛ ምአ ል ጠቀምም) Never (እ ስ ካ ሁን ተጠቅሜአ ለ ውቅም)

iv
 III. How do you rate OIB’s ATM service on the basis of the following
items?ከታችበተጠቀትዝር ዝር የ ኤቲኤምመመዘ ኛመሰረ ትየ ኦ ሮሚያኢን ተር ና ሽና ልባን ክ
ኤቲኤምአ ገ ልግሎትእ ን ዴትያዩ ታል? Please put right mark (√) in front of the item
your rate on choice box that
express.(እ ባክዎትን ለ ሚሰጡትወጤትከመመዘ ኛመስፈረ ቱፈትለ ፈትራይትያድር ጉ.)

(በጣምእ ስማማ
(በጣም91አ ልስ
Very disagree

(እ ስማማለ ሁኝ
(አ ልስማማም)

(መካከለ ኛ)
Disagree

Strongly
Neutral
ማማም)

ለ ሁኝ)
Agree

agree
S.N

ATM Service Quality Attribute

)
1 The bank have sufficient number of ATMs per ATM
station.(በ ቂ የ ሆነ የ ኤቲኤምማሽ ኖችበ እ የ ስ ቴሽ ኑ ይገ ኛ ሉ)
2 ATM machines are placed at convenient locations
የ ኤቲኤምማሽ ኖችበ አ መችቦ ታዎችይገ ኛ ሉ፡ ፡
3 Corporate Brand Appearance On ATMs induced me
የ ኤቲኤምማሽ ኖችአ ገ ል ግሎትየ ሚሰ ጡበ ትቦ ታምል ክ ቶችለ
ደ ን በ ኞችየ ሚታዩ ና ቸው፡ ፡
4 ATM machines provides me readable Slips.
(የ ኤቲኤምማሽ ኖችየ ሚነ በ ብደ ረ ሰ ኝ ወይምስ ቴትመን ትይሰ
ጣሉ፡ ፡ )
5 ATM machines issues clean Notes
የ ኤቲኤምማሽ ኖችን ጹህ የ ብር ኖቶችይከ ፋል ሉ፡ ፡
6 ATM Stations areas and ATMs are Clean
ኤቲኤምማሽ ኖችን ጽህ እ ና አ ከ ባ ቢያ ቸውየ ጸ ዳ ነ ው፡ ፡
7 ATM provide me with wide range of services
ኤቲኤምማሽ ኖችየ ተመላ ና ዘ ር ፈብዙአ ገ ል ግሎቶችይሰ ጡል
8 ATM Transactions are accurate.
ኤቲኤምማሽ ኖችአ ገ ል ግሎቶችን በ ትክ ክ ል ይፈጽማሉ
(ሂ ሳ ብን በ ትክ ክ ል ቀ ን ሶ ገ ን ዘ ብመክ ፈል )፡ ፡
9 The Speed of ATMs are good
የ ኤቲኤምማሽ ኖችፍጥነ ትጥሩ ነ ው፡ ፡
10 ATMs will not be out of order
የ ኤቲኤምማሽ ኖችከ አ ገ ል ግሎትውጭአ ይሆኑ ም፡ ፡
11 ATM Systems are easily usability
የ ኤቲኤምማሽ ኖችበ ቀላ ሉመጠቀ ምይቻላ ል ፡ ፡
12 ATMs are easily accessed.
የ ኤቲኤምማሽ ኖችለ አ ገ ል ግሎትበ ቀ ላ ሉማግኘ ትይቻላ ል ::
13 Sufficient cash are availability in ATMs
በ እ የ ኤቲኤምማሽ ኖችውስ ጥአ ገ ል ግሎትለ ማግኘ ትበ ቂ ገ ን
ዘ ብይኖራል ፡ ፡
14 Lost ATM cards were quick replaced

v
 የ ኤቲኤምካ ር ድዎቢጠፋበ ፍጥነ ትይተካ ሎታል ፡ ፡

(በጣምእ ስማማ
(በጣምአ ልስማ
Very disagree

(እ ስማማለ ሁኝ
(አ ልስማማም)

(መካከለ ኛ)
Disagree

Strongly
Neutral

ለ ሁኝ)
Agree

agree
ማም)
S.N

ATM Service Quality Attribute

)
15 Less waiting time at ATMs
ከ ኤቲኤምማሽ ኖችአ ገ ል ግሎትለ ማግኝ ትየ ሚወስ ደ ውጊ ዜአ
ጭር ነ ው፡ ፡
16 Swallowed ATM cards were returned quickly
በ ኤቲኤምማሽ ኖችተይዘ ውየ ሚቀ ሩ ካ ር ዶቸን በ ቀላ ሉመል ሶ
ማግኘ ትይቻላ ል ፡ ፡
17 Employee respond promptly with ATM problems
የ ባ ን ኩሰ ራተኞችበ ኤቲኤምአ ገ ል ግሎትላ ይለ ሚከ ሰ ትችግ
ር በ ፍጥነ ትመፍትሄ ይሰ ጣሉ፡ ፡
18 Employee are effective in solving ATM problems
የ ባ ን ኩሰ ራተኞችከ ኤቲኤምጋ ር ተያ ይዞ ለ ሚፈጠር ችግር መ
ፍትሄ በ መስ ጠትውጤታማና ቸው፡ ፡
19 Privacy at ATMs are good,
በ ኤቲኤምማሽ ኖችበ ምጠቀምበ ትጊ ዜበ ቂነ ጻ ነ ትአ ለ ፡ ፡
20 The bank provides sufficient advice about ATM Usage
and Security.
ባ ን ኩስ ለ ኤቲኤምማሽ ኖችአ ጠቃቀ ምበ ቂየ ሆነ ምክ ር ና መደ
ረ ግስ ላ ለ በ ትጥን ቃቄሰ ቶኛ ል ፡ ፡
21 There is sufficient security at ATM stations
በ ቂ የ ሆነ ጥበ ቃበ ኤቲኤምማሽ ኖችአ ከ ባ ቢአ ለ ፡ ፡
22 The employees are friendly in dealing with customers
የ ባ ን ኩሰ ራተኞችተግባ ቢና ከ ደ ን በ ኞችጋ ር ጥሩ ግን ኙነ ት
አ ላ ቸው፡ ፡
23 ATM Fees are fair(free)
የ ኤቲኤምማሽ ኖችየ አ ገ ል ግሎትክ ፍያ ተመጣጣኝ ወይምነ ጻ
ነ ው፡ ፡
24 ATM card application process were easy
የ ኤቲኤምካ ር ድአ ገ ል ግሎትጥያ ቄ ዎችን በ ቀ ላ ል ለ ማከ ና ወ
ን ይቻላ ል ፡ ፡
25 Employee of the bank are easily accessibility to Solve
ATMIssues.የ ባ ን ኩሰ ራተኞችን ከ ኤቲኤምአ ገ ል ግሎትጋ ር
ተያ ያ ዘ ለ ሚገ ጥመኝ ችግር በ ማን ኛ ውምጊ ዜመግኘ ትእ ችላ ለ
ሁኝ

vi
IV. General Customer feelings about OIB ATM Service ( አ ጠቃላ ይመረ ጃስለ
ደን በኛውእ ር ካታ)
Please put right mark (√) for response of your feeling about the question
provided.(እ ባ ክ ዎትን ለ ተጠቀ ሱትጥያ ቄ ዎቸዎችመል ስ የ ሚስ ማማዎትን አ ን ዱላ ይራይት (√)
ምል ክ ትያ ድር ጉ ባ ቸው፡ ፡ )

1. OIB‘s ATM service is providing me banking service satisfaction up to my expectation?

ኦ ሮሚያ ኢን ተር ና ሽ ና ል ባ ን ክ በ ሚሰ ጠውየ ኤቲኤምካ ር ድአ ገ ል ግሎትእ ኔ በ ምጠብቀ ውደ ረ ጃእ ር ካ
ታእ ስ ገ ኝ ቶል ኛ ል ፡ ፡
Very disagreeበ ጣምአ ል ስ ማማም Disagree Agree አ ል ስ ማማም
Neutral (አ ይታወቅም/መካ ከ ለ ኛ )  Agree (እ ስ ማመለ ሁኝ )
Strongly Agree (በ ጣምእ ስ ማመለ ሁኝ ) 
2. How do you rate your overall satisfaction with OIB ATM service?
በ አ ጠቃለ ይኦ ሮሚያ ኢን ተር ና ሽ ና ል ባ ን ክ በ ሚሰ ጠውየ ኤቲኤምካ ር ድአ ገ ል ግሎትእ ር ካ ታዎትእ ን
ዴትይገ ል ጽታል ?

Very dissatisfied (እ ጅግአ ል ረ ካ ሁም) 

Dissatisfied (አ ል ረ ካ ሁም) 

Neutral (አ ይታወቅም/መካ ከ ለ ኛ ) 

Satisfied (ረ ክ ቻለ ሁኝ ) 

Very satisfied (እ ጅግረ ክ ቻለ ሁኝ )

V. Part 4
Open ended question (other challenges and possible suggestion)

1. What are the three most frequently problem you face in using OIB‘s ATM service?
(Please rank from 1 up to 3 according to their frequency.)
የ ባ ን ኩን ኤቲኤምማሽ ኖችበ ሚጠቀ ሙበ ትጊ ዜበ ተደ ጋ ጋ ሚከ ሚያ ጋ ጥሞትችግሮትውስ ትሶ ስ
ቱን ዋና ዋና ችግሮቸን ይጥቀ ሱ? እ ባ ክ ዎትን ችግሮችበ ቅደ መበ ድግሞሹመጠን ተከ ተል 1
እ ስ ከ 3 ያ ስ ቀ ምጡ?
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------

vii
 2. What do you think needs to be done to improve the service you get through the ATM?
ባ ን ኩምን ቢያ ደ ር ግየ ኤቲኤምማሽ ኖችየ አ ገ ል ግሎትማሻ ሻ ል ወይምየ በ ለ ጠጥሩ ማድረ ግ ያ
ለ ባ ቸውን ዝር ዝር ነ ገ ሮችይጥቀ ሱ
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------

Thank you very much

እ ና መሰ ግና ለ ን ፡ ፡

Annex 2- Interview questions for e-banking department director.

INTERVIEW QUESTIONS FOR SURVEY STUDY

ADDIS ABABA UNIVERSITY COLLEGE OF BUSINESS & ECONOMICS

DEPARTMENT OF MANAGEMENT, EMBA PROGRAM

1. What are the challenges/problems you face while providing ATM service in Addis
Ababa?
2. What are the factors contributing to OIB ATM service problems in Addis Ababa?
3. Does the bank think ATM service has given more satisfaction to customers than
ordinary banking and does it reduced the frequency of branch visits?
4. What is the reason for persistent complaints from customers as regards ATM service
in Addis Ababa?
5. What are the possible solutions to ATM service challenges in Addis Ababa?

viii
Annex 3- ATM Service quality attributes statistics

Std. Quality
ATM Service Attributes Mean Deviation N Dimension
The bank has sufficient number of ATMs per ATM station. 2.32 1 200 Tangible
ATM machines are placed at convenient locations 2.71 1.041 200 Tangible
Corporate Brand Appearance on ATMs induced me 3.39 1.011 200 Tangible
ATM machines provide me readable Slips. 3.69 1.121 200 Tangible
ATM machines issues clean Notes 3.73 0.987 200 Tangible
ATM Stations areas and ATMs are Clean 3.74 0.882 200 Tangible
ATM provide me with wide range of services 3.12 1.158 200 Reliability
ATM Transactions are accurate. 2.99 1.02 200 Reliability
The Speed of ATMs are good 3.84 1.106 200 Reliability
ATMs will not be out of order 2.22 1.199 200 Reliability
ATM Systems are easily usability 3.83 0.975 200 Reliability
ATMs are easily accessed. 3.33 1.261 200 Reliability
Sufficient cash are availability in ATMs 2.77 0.986 200 Responsiveness
Lost ATM cards were quick replaced 2.66 1.048 200 Responsiveness
Less waiting time at ATMs 3.44 0.121 200 Responsiveness
Swallowed ATM cards were returned quickly 2.87 1.072 200 Responsiveness
Employee respond promptly with ATM problems 2.88 1.092 200 Responsiveness
Employee are effective in solving ATM problems 3.04 1.059 200 Responsiveness
Privacy at ATMs are good 3.5 0.94 200 Assurance
The bank provides sufficient advice about ATM Usage and
Security. 3.14 1.256 200 Assurance
There is sufficient security at ATM stations 3.49 1.272 200 Assurance
The employees are friendly in dealing with customers 2.71 0.897 200 Empathy
ATM Fees are fair(free) 3.72 1.188 200 Empathy
ATM card application process were easy 2.67 1.118 200 Empathy
Employees of the bank are easily accessibility to Solve 200 Empathy

ix
ATM Issues. 2.36 1.283