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1.0 INTRODUCTION
Automated Teller Machine (ATM) is a self-service machine that dispenses cash and performs
some other human teller functions. It is one of the technological feats actualised in the developed
world, which gradually gained acceptance in most developing countries, like Nigeria. In 1989, the
National Cash Register (NCR) installed the first Automated Teller Machine (ATM) for Societe
Generale Bank Nigeria (SGBN), and that was the first time an ATM was introduced in Nigeria.
Agboola (2006) reports that only one bank had ATM in Nigeria in 1998. However, with the
reforms of 2004 in the banking sector, which heralded intense competition among banks, there
was a surge in the use of ATM, despite the presence of some intractable challenges like, illiteracy,
irregular power supply, network failure, insecurity, machine breakdown, long queue, card
retraction, among others. Wole and Louisa (2009) posit that the deployment of ATM by banks and
its use by bank customers is gaining ground and has burgeoned in recent times. Fasan (2007)
further asserts that the growth in the use of ATM is as a result of the consolidation of banks, which
made it possible for more banks to deploy ATMs or at least become part of the shared networks.
The growth in the use of ATMs in Nigeria demands that efforts be intensified to ensure customer
satisfaction, which in turn will enhance profitability. Corroborating, Sabir, Ghafoor, Akhtar,
Hafeez and Rehman (2014) assert that today’s businesses compete for customers, and customer
satisfaction is becoming a key performance indicator and an essential element of business strategy.
Further, Devlin and Dong (1994) note that in an increasingly competitive environment, service
quality is critical to corporate success. In their study, they have linked the notion of service quality
to customer satisfaction. Ultimately, it is customer satisfaction that leads to market share and
profits. PITT, Watson and Kavan (1995) assert that service quality is an essential tool in the
measurement of customer satisfaction.
To operationalise the service quality construct, Zeithaml, Parasuraman and Berry propounded the
ServQual model (Parasuraman, Berry, & Zeithaml, 1988). ServQual model also known as
the RATER model, stands for the five service factors it measures, namely: reliability, assurance,
tangibles, empathy and responsiveness. This model, which was based on the disconfirmation
paradigm, means that service quality is understood as the extent to which consumers’ pre-
consumption expectations of quality are confirmed or disconfirmed by their actual perception of
the service experience (Wikipedia). Cronin, J and Taylor, S. expunged the expectation aspect of
the ServQual model, lamenting that the model lacks validity, and should be replaced with the
ServPerf model (Cronin and Taylor, 1992).
Using the RATER model, many authors have tried to examine the extent to which service quality
variables (reliability, assurance, tangible, empathy and responsiveness) correlate with customer
satisfaction. According to Parasuraman et al. (1988), the relative weight that customers seem to
give to each quality dimension can be determined. The authors reveal that one of the outstanding
results that have been reported in the earlier studies of the relative importance is that customers
are entirely consistent in both their direct rankings of the importance of the service quality
attributes. In this important study, reliability was found to be the most important, and empathy the
least important across a seemingly vast array of service types. Zeithaml et al. (1990) report that
tangibles have been consistently unimportant. Mwatsika (2014) shows the result of his empirical
study which ranked reliability the essential dimension followed by responsiveness, empathy,
assurance and tangibles. Regrettably, tangibles and empathy have not so much been projected
concerning ATM studies (Berry, Zeithaml and Parasuraman, 1985). To this end, this study shall
be wading into this critical issue to make resounding recommendations that will reposition the
banking subsector in this highly innovative world.
A tour to most ATM points in the South East region of Nigeria would reveal an insufficient number
of ATMs and seats, inadequate shelter, the absence of customer care staff, among others.
Corroborating, Adebowale (2017) revealed that Leadership findings showed that bank customers
spend an average 50 minutes to 1 hour on queues to perform transactions through the automated
machines on weekdays in the cities where most of the banks are located. The situation is even
worse at weekends and festive periods when between 2-3 hours are spent in the rain or under the
Sun to make a simple cash withdrawal/transfer or other minor electronic transactions. It is a
common site to find long lines of people waiting to carry out different transactions daily. He further
recalled that at the last count, deployment of ATMs by commercial banks in the country was in
deficit of 72.33 per cent, with about 17,000 units in circulation. Regrettably, he lamented that most
of the ATM galleries across Nigeria are indeed centres of frustration, unending nightmare, pain
and delays. Like a thunderbolt, Nigerians groan under the harsh effect of the poorly managed
machines. The scenario above does not match the status of an average customer, who should be
treated like a king, hence the need to project these two service quality dimensions (tangibles and
empathy) in achieving customer satisfaction.
tangibles and empathy will be correlated with repeat use and referral, which are the two variables
selected in this study to show how customers express their satisfaction in their use of ATMs.
Service quality as seen in figure 2.1 is the independent variable, which is represented with tangible
and empathy. Customer Satisfaction, on the other hand, is the dependent variable, which is
represented with repeat use and referral. The first hypothesis is obtained by relating tangibles with
repeat use, while the second hypothesis is obtained by relating tangible with a referral. Similarly,
the third hypothesis is obtained by relating empathy with repeat use, while the fourth hypothesis
is obtained by relating empathy and referral.
SERVICE QUALITY CUSTOMER SATISFACTION
(Independent Variable) (Dependent Variable)
H01
Tangibles Repeat Use
H02
Kotler (2003) defines service as any act or performance that one party can offer to another that is
mostly intangible and does not result in the ownership of anything. He stresses that the production
of service may or may not be tied to a physical product.
Anyanwu (2013), in corroborating this assertion, opines that services would include:
a. intangible benefits offered for sale independently (insurance, legal service);
b. intangible activities that must go with tangible goods (house rentals, transportation
service); and
c. intangible activities purchased jointly with products (credit, training).
The outstanding feature of service, here, is its intangibility. Apart from services being intangible,
they are also heterogeneous, perishable and inseparable.
(A) Service Quality
Jiang, Klein, Chen and Tesch (2003), define Service Quality as the comparison between what the
customers feel should be offered (expectations) and what is delivered (perceptions). Parasuraman
et al. (1988), define Service Quality as the global overarching judgment or attitude relating to the
overall excellence or superiority of the service (conceptual aspect). These authors, in trying to
view service quality from a measurement perspective, define it as the degree of discrepancy
between customers’ normative expectations for the service and their perceptions of the service
performance. Lewis and Booms (1983) support the latter definition when they define service
quality as how well the service level delivered matches the expectations of the customer.
Customer satisfaction is a key performance indicator within the business and is often part of a
Balanced Scorecard. In a competitive market place where business competes for customers,
customer satisfaction is seen as a critical differentiator and increasingly has become an essential
element of business strategy (Farris, 2010).
RATER Model
The RATER model, created by Valarie Zeithaml, A. Parasuraman and Leonard Berry in
Parasuraman, Berry, & Zeithaml (1988) is a simple method of measuring customer expectations
of a firm’s service quality. This model was initially branded ServQual Model with ten dimensions
to measure service quality. After carrying out several tests, these authors concluded that there were
overlaps within the ten dimensions of the ServQual Model and this culminated into its reduction
to five dimensions, which they branded the RATER model.
The model emphasises five dimensions that customers generally consider important when they
seek quality services. The model focuses on the difference between customer experiences and
customer expectations. RATER is an acronym for five factors: Reliability, Assurance, Tangibles,
Empathy and Responsiveness. Markovic and Raspor (2010) explain the five factors below:
The two dimensions of service quality under study are tangibles and empathy, and they are
explained thus:
a) Tangibles
This attribute has to do with the machine and its components vis a viz customers’ ease of operation.
ATM user would appreciate ATMs that:
their keypads are easy to press
have touch screens that can be easily manipulated
rarely break down
have menu options that correspond with menu keys
can accept deposits amidst other functions
are not worn out and outdated
b) Empathy
This has to do with feeling the heart beats of customers; knowing what they pass through in the
course of using ATMs and being willing to offer personalised services to each ATM user as part
of customer relationship marketing strategy. It just means to put oneself in the place of others to
feel what they feel. ATM users would always appreciate that:
ATM displayed language is easy to understand;
Bank customer care staff offer customised services to each ATM card user who needs help;
Customer care staff ensure that ATM users are well seated while they wait for their turn to
From every indication, these items are as much important as other dimensions of service quality
that constitute the RATER model. Corroborating, Khan (2013) asserts that there is a general
agreement that ServQual items (Reliability, Assurance, Tangibles, Empathy and Responsiveness)
are reliable predictors of overall service quality. Contrary to the view of Khan (2013), Ahmed,
Nawaz, Usman, Shaukat and Iqbal (2010) posit that all the five dimensions of RATER do not
positively correlate with customer satisfaction, as there is a negative relationship between empathy
and customer satisfaction. This shall be verified in this study.
3.0 METHODOLOGY
The researcher adopted the descriptive research design. The questionnaire designed for ATM users
is made up of Five Point Likert Scale comprising 37 positive statements that cut across the RATER
model. The questionnaire was divided into two major parts – Performance and Customer
Satisfaction. Responses were analysed using SPSS 23. Correlation analysis was used to determine
the significance of the correlation among the variables. This study is domiciled in two banks: First
Bank of Nigeria Plc. (Aba Main Branch, Arochukwu Branch and Umuahia Branch) and Union
Bank Nigeria. Plc. (Aba Factory Road Branch, Arochukwu Branch and Umuahia Library Avenue
Branch). The six branches of the two banks as specified above cover the three senatorial districts
(Abia North, Abia Central and Abia South) of Abia State. The sampling elements comprise of
customers of banks who are users of First Bank and Union Bank ATMs located in the three
senatorial districts of Abia. The population of ATM users in Abia is not known. Hence the
proportion method was used to obtain a sample size of five hundred and three (503) persons
selected using the convenience sampling technique. The Cronbach’s alpha was used to test the
reliability of the instrument used, and a value of 0.830 was obtained. This shows a high degree of
internal consistency in the measuring instrument used.
The scores of the dependent variables, Referral (Y1) and Repeat use (Y2) are obtained as follows:
Referral (Y1) = CS1 + CS2 + CS3
Repeat Use (Y2) = CS4 + CS5 + CS6 + CS7
The descriptive statistical analysis of the dependent and independent variables is presented in table
4.2 below in this section and the descriptive statistics considered are the mean, standard deviation,
skewness and kurtosis of the study variables: Independent variables (Tangibles(X1), Empathy
(X2),and the dependent variables (Referral (Y1) and Repeat Use (Y2).
Table 4.2: Mean, Standard Deviation, Skewness and Kurtosis of X1, X2, Y1, Y2
Mean Standard Deviation Skewness Kurtosis
Tangibles (X1) 3.67 0.830 -0.496 0.226
Empathy (X2) 3.46 0.929 -0.153 -0.556
Referral (Y1) 3.83 0.928 -0.883 0.706
Repeat Use (Y2) 3.78 0.882 -0.811 0.773
Source: Analysis of Field Survey Data (2018)
Discussion of Results and Findings of Descriptive Statistics of Study Variables
The result of Table 4.2 above shows that in this study, Tangibles (X1) has a mean score of 3.67
(above an expected mean score of 3.00) with a standard deviation score of 0.830 (a relatively low
standard deviation). Also, it has a skewness score of -0.496 (indicating a very low negative
departure from the normal distribution assumed value of 0) and kurtosis score of 0.226 (showing
an approximately normal peak for the distribution curve). Empathy (X2) has a mean score of 3.46
(above an expected mean score of 3.00) with a standard deviation score of 0.929 (a relatively low
standard deviation), a skewness score of -0.153 (indicating a very low negative departure from the
normal distribution assumed value of 0) and kurtosis score of -0.556 (showing approximately
normal peak for the distribution curve). Referral (Y1) has a mean score of 3.83 (above an expected
mean score of 3.00) with a standard deviation score of 0.928 (a very low standard deviation), and
a skewness score of -0.883 (indicating a very low negative departure from the normal distribution
assumed value of 0) and kurtosis score of 0.706 (showing approximately normal peak for the
distribution curve). Repeat Use (Y2) has a mean score of 3.78 (above an expected mean score of
3.00) with a standard deviation score of 0.882 (a very low standard deviation), and a skewness
score of -0.811 (indicating a very low negative departure from the normal distribution assumed
value of 0) and kurtosis score of 0.773 (showing approximately normal peak for the distribution
curve).
Each of the independent and dependent variables has a mean score that is higher than each expected
mean score; their standard deviations are low and approximately equal indicating a constant
variance (homoscedasticity) assumption required by the regression analysis and the t-test. The
skewness and kurtosis values that are approximately 0 indicate that the variables are approximately
normally distributed.
4.3 Correlation Analysis
The correlation matrix shown in Table 4.3 below is the Pearson Correlation Coefficients between
the pairs of these variables: Tangibles and Empathy vis-a-viz Referral and Repeat Use. The
correlation coefficients show the degree of association (correlation) between the pair of the study
variables with their corresponding p-values enclosed in brackets. The statistical decision is taken
using the p-value (the correlation is significant if the p-value is less than 0.05. Otherwise, it is
not significant).
Table 4.3: Correlation Matrix of ATM Users Study Variables (n = 503) with associated p-
values in bracket
The degree of correlation between Repeat-use and Tangible is 0.369 with a p-value of 0.000 which
indicates a significant correlation between Repeat-use and Tangible as its p-value is less than 0.05.
The degree of correlation between Repeat-use and Empathy is 0.350 with a p-value of 0.000 which
indicates a significant correlation between Repeat-use and Empathy as its p-value is less than 0.05;
Each of them is significant at 0.01 level as shown in the SPSS output in the appendix.
Hypothesis 1
H01: There is no significant correlation between Tangible and Repeat-Use.
Since the correlation coefficient between Repeat-Use and Tangible is 0.369 with a p-value of 0.000
which is less than 0.05, we reject the null hypothesis 1, and that indicates there is a significant
correlation between Repeat-Use and Tangibles.
Hypothesis 2
H02: There is no significant correlation between Tangible and Referral.
Since the correlation coefficient between Referrals and Tangible is 0.385 with a p-value of 0.000
which is less than 0.05, we reject the null hypothesis 2, and that indicates there is a significant
correlation between Referral and Tangible.
Hypothesis 3
H03: There is no significant correlation between Empathy and Repeat-Use.
Since the correlation coefficient between Repeat-Use and Empathy is 0.350 with a p-value of 0.000
which is less than 0.05, we reject the null hypothesis 3, and that indicates there is a significant
correlation between Repeat-Use and Empathy.
Hypothesis 4
H04: There is no significant correlation between Empathy and Referral.
Since the correlation coefficient between Referral and Empathy is 0.354 with a p-value of 0.000
which is less than 0.05, we reject the null hypothesis 4, and that indicates there is a significant
correlation between Referral and Empathy.
Further, the study reveals that 58.3% of the study population can use ATMs without assistance
while 41.7% cannot use ATMs without assistance. This is a high risk, given that security details
of ATM users can be compromised as these illiterate users seek assistance from other users. This
buttresses the need to embark on an intensive promotion of education on e-banking and the use of
ATMs among Nigerian populace. It further stresses the immediate need of giving individualised
care to these customers who cannot make use of ATMs on their own. This will ensure their
satisfaction.
Since repeat use and referral are all outcomes of customer satisfaction, one can invariably deduce
the facts that tangibles correlate with customer satisfaction. This is in tandem with the outcome of
the study done by Jamal and Naser (2002). In the same vein, empathy was found to have a
significant correlation with customer satisfaction. This is consistent with the study of Norazah and
Norbayah (2013). This implies that customers are delighted with individualised attention given to
them in the use of ATMs. Surprisingly, Sudesh (2007) revealed that poor service quality in public
sector banks is mainly because of deficiencies intangibility, lack of responsiveness and empathy,
but private sector banks, on the other hand, were found to be more reformed in this respect. This
makes it expedient for both private and public banks to step up their levels of care, individualised
attention to customers, quality of facilities used and the time taken to respond to customers’
requests.
6.0 CONCLUSION
Nigerians have come to embrace ATMs in this technologically evolving dispensation. Hence
today’s ATM users do not just look out for ATMs that directly dispense cash or offer other
traditional services, but those that can readily accept deposits and even do other transactions. They
prefer ATMs whose keypads are easy to press, touch screens are easy to manipulate, and displayed
language is readable.
7.0 RECOMMENDATIONS
Having established the fact that there is a significant correlation between these two service quality
dimensions, tangibles and empathy, and customer satisfaction dimensions (referral and repeat use),
the following recommendations are made:
i. Banks in Nigeria should ensure that ATM points are made comfortable for users as they
wait to make use of ATMs. Seats, lights, water dispensers should be made available and
ii. They should ensure that ATMs have soft buttons, high screen resolution, good background
iii. They should also ensure that customer care staff who are courteous, attractive, neat, smart,
honest, are assigned to various ATM points. These bank staff should be ready to offer help
to any ATM user who needs assistance in his ATM usage without compromising the ATM
user’s identification numbers (PIN), knowing that almost half of the study population
iv. Bureaucracy associated with some ATM error reversals, especially dispensing errors
v. Strict multiple security layers should be put in place to reduce ATM fraud to the barest
minimum. This includes the use of bio-data in addition to the use of personal identification
numbers.
vi. Alternate channels should be opened up for people who, for any reason, do not want to use
ATMs.
vii. ATMs should be regularly maintained to avert regular breakdowns, especially at critical
seasons.
viii. The number of ATMs in Nigeria should increase to reduce the queues at ATM points,
especially in rural communities, and these machines should meet global standards.
ix. Effective sensitisation programmes should be carried out regularly to educate ATM users
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35 SMS alert charge for a transaction does not exceed #2 (bulk SMS cost)
36 There are no charges on ATM transactions
37 Using other banks’ ATMs up to three times in a month attracts a charge
SN Customer Satisfaction Variables SD D U A SA
1 I refer friends to ATM points when they have urgent need for cash
2 I refer people to ATM points when I see them queue before cash tellers
3 I refer friends to ATM points where there are no long queues
4 I keep using ATMs because I am satisfied with its service quality
5 I keep using ATMs because I have no better alternative
6 I use ATMs whenever I am in dire need of cash
7 I am generally satisfied with the quality of service of ATMs
APPENDIX 2
Reliability Coefficient of Performance
Reliability Statistics
Cronbach's Alpha N of Items
0.803 37
Scale Statistics
Mean Variance Std. Deviation N of Items
120.35 317.608 17.822 37