THE EFFECT OF AUTOMATED TELLER MACHINE SERVICES QUALITY ON

CUSTOMER SATISFACTION: EXPERIENCE FROM SOME SELECTED CBE IN

ADAMA

By:BemnetYemane

A Thesis Submitted to Unity University in the Partial Fulfillment ofthe Requirements for
Master Degree in Business Administration

UNITY UNIVERSITY

ADAMA CAMPAS

July, 2021
Adama, Ethiopia

I
 Unity University
Department Of Management
Masters of Business Administration
This is to certify that the thesis prepared entitled " The Effect Of Automated Teller Machine
Services Quality On Customer Satisfaction: Experience From Some Selected CBE In
Adama” which is partial fulfillment of the requirements for Degree of Masters in Masters of
Business Administration, complies with the regulations of the University and meets the accepted
standards with respect to originality and quality.

Approved by Board of Examiners:

Advisor Signature Date
____________________ ____________ ____________
Internal Examiner Signature Date
____________________ ____________ ____________
External Examiner Signature Date
____________________ ____________ ____________
Graduate Program Coordinator Signature Date
____________________ ____________ ____________

I
THE EFFECT OF AUTOMATED TELLER MACHINE SERVICES QUALITY ON
CUSTOMER SATISFACTION: EXPERIENCE FROM SOME SELECTED CBE IN
ADAMA

A Thesis Submitted To Unity University in the Partial Fulfillment of the Requirements for
Master Degree in Business Administration

By:

BemnetYemane

Advisor:
BogaleAlemu(PhD)

July, 2021
Adama, Ethiopia

II
 Abstract
ATMs introduced with the view to automate the operation of the banks and create competitive
advantage in the banking industry. The main concern of this study is to assess the effect of
automated teller machine services quality on customer satisfaction: experience from some
selected CBE in Adama. Now a day, banks are striving to develop alternative service channels
due to technological changes, to fulfill the customer desire, to gain competitive advantage and
improve their financial service through innovation products, maximize the profitability, enhance
the market share, and achieve the customer loyalty. To achieve the research objective, using
both descriptive explanatory survey designs was applied and both primary and secondary
sources of data were used. The collected data was analyzed by using both descriptive and
inferential statistics. Primary data were collected from respondents through survey
questionnaires measured with a five-pointLikert scale and some are close ended. Convenience
sampling technique was employed to select the study participants. The study has shown that, out
of 198 ATM card users, over 90% are fairly satisfied with ATM services from their respective
bank. All ATM service quality attributes associated with technology have been perceived good
performers. The study has revealed that all service quality is significantly correlated with
customer satisfaction except three items under assurance. The result from multiple regressions
also confirms that all service quality attributes used in the study have significantly influenced
customer satisfaction. Therefore, the results designate that for banks to remain competitive
through ATM banking efforts should be exerted in providing responsive ATM services.

Keywords: Service Quality, Customer Satisfaction, and ATM Service.

 Declaration

I, the undersigned, hereby declare that the thesis work entitled “The effect of automated teller
machine services quality on customer satisfaction: experience from some selected CBE in
Adama”submitted by me for the award of Master of Art Degree in Business Administrationfrom
Unity University, is my original work and it has not been submitted or presented for the award of
any other degree or other similar titles at any other university or institution.

Declared by Confirmed by Advisor

Name BemnetYemaneName______________________
Signature_________________ Signature___________________
Date_____________________ Date_______________________
 Table of Contents
Abstract..........................................................................................................................................IV
Declaration......................................................................................................................................V
Acknowledgments.........................................................................................................................III
CHAPTER 1....................................................................................................................................1
1. INTRODUCTION....................................................................................................................1
1.1 Background of the Study..............................................................................................................1
1.2 Statement of the Problem...........................................................................................................2
1.3 Research Questions.....................................................................................................................4
1.4 Objective the Study.....................................................................................................................5
1.4.1 General Objective................................................................................................................5
1.4.2 Specific Objectives...............................................................................................................5
1.5 Research Hypothesis....................................................................................................................5
1.6 Significance of the Study..............................................................................................................6
1.7 Scope of the Study.......................................................................................................................6
1.8 Definition of Key Terms...............................................................................................................7
1.10 Organization of the Paper............................................................................................................7
CHAPTER TWO.............................................................................................................................8
2 REVIEW OF RELATED LITERATURE...............................................................................8
2.1 Theoretical Review......................................................................................................................8
2.1.1 The History of ATM Service in Ethiopia................................................................................9
2.1.2 The Concept of Service Quality..........................................................................................10
2.1.3 Benefits of Using ATMs......................................................................................................10
2.1.4 Benefits of ATMs to Banks.................................................................................................11
2.1.5 Benefit to Card Holders......................................................................................................11
2.1.6 Customer Satisfaction........................................................................................................12
2.1.7 ATM Service Delivery and Customer’s Satisfaction............................................................12
2.1.8 Measuring Customer Satisfaction......................................................................................14
2.1.9 The Relationship between Service Quality and Customer Satisfaction..............................14
2.2 Empirical Review........................................................................................................................17

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 2.3 Conceptual Framework..............................................................................................................20
CHAPTER THREE.......................................................................................................................22
3. REASERCH DESIGN AND METHODOLOGY......................................................................................22
3.1 Research Approach....................................................................................................................22
3.2 Research Design.........................................................................................................................22
3.3 Target Population and Sample Size............................................................................................22
3.3.1 Population..........................................................................................................................22
3.3.2 Sampling Size Determination.............................................................................................23
3.4 Data Type...................................................................................................................................23
3.5 Data gathering tools..................................................................................................................24
3.6 Methods of Data Analysis..........................................................................................................24
3.7 Reliability...................................................................................................................................24
3.8 Validity.......................................................................................................................................24
3.9 Research Model.........................................................................................................................25
3.10 Ethical Considerations...............................................................................................................25
CHAPTER FOUR.........................................................................................................................27
4. DATA PRESENTATION, ANALYSIS AND INTERPRETATION....................................27
4.1. Respondents Response Rate......................................................................................................27
4.2. Discussion for Demographic profile of respondents..................................................................27
4.2.1. Gender of the Respondent.................................................................................................28
4.2.2. Age of the Respondent......................................................................................................28
4.2.3. Marital Status of the Respondent......................................................................................29
4.2.4 Educational Qualification of the Respondent....................................................................29
4.2.5 Customer’s experience years with CBE ATM......................................................................29
4.2.6 Reliability Analysis....................................................................................................................29
4.3 Descriptive Analysis...................................................................................................................30
4.3.1 Respondents’ Perception of Reliability..............................................................................31
4.3.2 Respondents’ Perception of Assurance..............................................................................32
4.3.3 Respondents’ Perception of Empathy................................................................................32
4.3.4 Respondents’ Perception of Tangibility.............................................................................33
4.3.5 Respondents’ Perception of Responsiveness.....................................................................34

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 4.3.6 Overall Level of Service Quality for Customer Satisfaction................................................35
4.4 Correlation Analysis...................................................................................................................36
4.5 Regression Analysis....................................................................................................................37
4.6 Testing Hypothesis.....................................................................................................................39
CHAPTER FIVE...........................................................................................................................42
5 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS..................42
5.3 Summary of the Study Finding...................................................................................................42
5.2 Conclusion.................................................................................................................................43
5.3 Recommendations.....................................................................................................................43
5.4 Limitations of the Study.............................................................................................................44
5.5 Future Research.........................................................................................................................44
APPENDIX 1:...............................................................................................................................48
SURVEY QUESTIONNAIRE......................................................................................................................48
Appendix II:...................................................................................................................................51
SPSS result.............................................................................................................................................51

VII
List of Tables
Table 1: Target Population and Sample Size…………………………………………………..23
Table 2:- Response rate………………………………………………………………………..27
Table 3: Demographic Profiles of Respondente………………………………………………27
Table 4: Reliability test………………………………………………………………………..30
Table 5 Average Mean Score in Reliability Dimension………………………………………30
Table 6: Average Mean Score in Assurance Dimension………………………………………32
Table 7: Average Mean Score in Empathy Dimension………………………………………..32
Table 8: Average Mean Score in Tangibility Dimension……………………………………..33
Table 9: Average Mean Score in Responsiveness Dimension………………………………..34
Table 10: Overall level of service quality for customer satisfaction…………………………35
Table 11: Correlation Analysis……………………………………………………………….36
Table 12: Regression Model Summary……………………………………………………….37
Table 13: ANOVA……………………………………………………………………………38
Table 14: Model Analysis…………………………………………………………………….38
Table 15: Summary of Hypotheses Testing…………………………………………………..40

VIII
List of Figure

IX
 Acknowledgments

First and for most, my heartily thanks go to the almighty God, the Father and the Son and the
Holy Spirit for his graciously provision of knowledge, wisdom, inspiration and diligence
required for the successful completion of this study.

Secondly, I am very grateful to my advisor, BogaleAlemu (PhD)for his intelligent guidance,

encouragement and helpful advices during the whole process of research writing. Next, my
gratitude is extended to my beloved Parents and siblings I have no words to express my gratitude
for their unreserved support.

Finally, I would like to thank my friends who made a tremendous contribution in making this
project successful.
 CHAPTER 1
1. INTRODUCTION
1.1 Background of the Study

Today customers need any service including banking to be ease, reliable and faster to satisfy
their demand. Hilland Alexander (2003), has defined customer satisfaction as a measure of how
organization’s total products perform in relation to a set of customer requirements, even though
surely customers’ view of organization’s performance will be a perception, customer satisfaction
is up to the customers’ mind and it may or may not conform with the reality of the situation. A
more general definition of customers’ satisfaction is given by Kottler (2003); he explains as a
function of perceived performance and expectations. In this regard, if the performances fall short
of expectation the customer is dissatisfied. If the performance matches the expectation the
customer is satisfied, when the performance exceeds the expectation the customer is highly
delighted.

As Adelowo (2010) has noted Automated Teller Machine (ATM) is a computerized

telecommunications device that provides financial services to the customers with access to
financial transactions in a public space without the need for a human clerk or bank teller. It
combines a computer terminal, record keeping system and cash vault in one unit, permitting
customers to enter the banks record keeping system with a plastic card containing a Personal
Identification Number (PIN) or by punching a specific code into the computer terminal linked to
the bank’s computerized records 24-hours a day (Rose,1999).

As far as customer satisfaction concerned with regard to e-banking products, ATM plays a
paramount contribution as they make banking transactions easy to the customers’
(Premalatha&Sundaram, 2012). Today customers of any service including banking are interested
to the ease, reliable and faster service. They want autonomy in transacting and so that they prefer
self service delivery system (Khan, 2010).

Faraz (2005) stated that customer satisfaction is the situation when customer expectations have
been fulfilled to the fullest capacity when using the product or service. Fulfilling customer
expectation consequently brings about strong loyalty to the product or services of a company.

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Automated teller machine was first introduced in Ethiopia in 2001, with the Commercial Bank of
Ethiopia (CBE) being the pioneers of this service to the banking sector (Gardachew, 2010). This
was done so as to enable customers have a 24-hour access to their money and hence improve
customer satisfaction. Cash machines are relatively new to Ethiopia, but their number is growing
quickly, with banks eager to ease access for their customers. A fair distribution of ATMs in areas
convenient to the customers does have an effect on satisfaction of customers due the convenience
of bringing banking closer to the customers (www.atmgurus.com). However, despite the Bank’s
effort to improve access for its customers by increasing the number of machines, network failure,
due to service breakdown from the country’s sole telecommunications service provider,
ethiotelecoms, and internal network problems, are the challenges faced by commercial banks in
successful service delivery and distribution of ATM throughout the country (Gezahegn, 2015).

Currently active ATM card holders reached more than 8 million (https://combanketh.et,
Accessed 12/4/21).Today, more than ever before, CBE aggressively expanded its presence in all
directions of the country. To improve its service, retain & attract customers, CBE has introduced
innovative products like automatic teller machine, mobile banking, internet banking and other
improved banking facilities among others, all in the interest of enhancing customers comfort.
Along with the above background, this study is set out to assess the effect of automated teller
machine services quality on customer satisfaction: experience from some selected CBE in
Adama, to see determinants of customer loyalty in the case of commercial bank of Ethiopia as
explanatory study and to provide suggestions to the organizations as how they can create loyal
customer in order to achieve the organizational goals.

1.2 Statement of the Problem

Banks are in the process of moving to a more competitive financial atmosphere, with a wide
variety of financial products/services. Commercial bank of Ethiopia (CBE) is the largest bank
&its customers made it so, without them the bank will end to exist. It is important to understand
the customer need and test their preference to satisfy them. There are more than 27.5 million
account holders in CBE out of this 450,560 are found in Adama District (from those only 8
million customers are using ATM service in CBE and 131,345 in Adama District). In addition to
this, from the total number of 9.6 million customers only 8.2 million customers are active users
and 1.4 million are inactive users. (CBE, ATM Banking Status Report, February 20th 2021).

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Automated teller machine (ATM) banking is the second popular access channel to banking
services behind branch banking in Ethiopia which offers competitive advantage in the
homogenous market of retail banking products and services (CBE, ATM Banking Status Report,
February, 20th2021).

Automated teller machine (ATM) is an innovative service delivery mode that offers diversified
financial services like cash withdrawal, funds transfer, cash deposits, payment of utility and
credit card bills, cheque book requests and other financial enquiries (Muhammad, 2010). The
concept of automated teller machine (ATM) has been quite old and has been developing
throughout the world. Undoubtedly, a fair number of theoretical and empirical researches have
been made worldwide, because of increase in scale of ATMs and consequently to convert the
economy into a cashless one (Pohwa and Saxean, 2010).

Aborampah (2010) noted that in Ghana, ATM is commonly used by customers of various banks
for cash withdrawal and account balance enquiry. The other functions of the ATMs such as funds
transfer, cheque-book requests and payment of utility bills among others which are collectively
aimed at increasing customers’ satisfaction are not fully utilized. This inability on the part of
customers to exploit these opportunities provided by the ATM is mainly due to reasons such as
inadequate knowledge about the functions of the ATMs apart from cash withdrawals and balance
enquiry, inability of some banks to render diversified ATM services, among others. However, it
should be noted that ATM services offered to clients differ among banks (Islam et al, 2007).

In bringing up the ATM technology, banks portrayed the use of ATMs to be more superior in the
delivery of service as compared to the use of cashiers. Looking at the many queues that
characterize the premises of several banks at sometimes, it may be inferred that the quality of
service delivery through the use of these ATMs may be greatly affected and hence the need to
look at the effectiveness of this technology. There are also some instances when customers
would prefer to queue up in the bank even when the ATMs are operational and no customers are
in sight using the facility. People do not believe that they can go and collect many without
talking to anybody; hence, instead of using ATMs, they prefer to go to bank premises to get the
service (Nazeret.com). Cash machines are relatively new to Ethiopia, but their number is
growing quickly, with banks eager to ease access for their customers. However, despite the

3
bank’s effort to improve access for its customers by increasing the number of machines, ATM
users are still feeling the brunt of the consequence of unreliable service Fortune (Vol 14. No
700).

There are a number of researches conducted on measuring customer satisfaction in banking

industry and challenges of ATM usage. For instance, Adelowo S. (2010) has tried to show
challenges of automated teller machine (ATM) usage and fraud occurrences in selected Nigerian
commercial banks. GetachewWorku (2010)has also conducted a study on the assessment of
electronic banking practices, opportunities and challengesin Ethiopia. Moreover,
GezahegnBalcha (2015)has attempted to assess ATM banking and customer’s satisfaction in
Ethiopian banks case of Addis Ababa city. In line with this, a study conducted by Gezahegn
(2015) has tried to associate the satisfaction of ATM services users with the service charge
deducted while withdrawal is requested.

Considering the above mentioned studies conducted on measuring customer satisfaction in

banking industry and challenges of ATM usage, the researcher has found both conceptual and
geographical gaps. On the one hand, the researcher has failed to finda study that tries to see
promoting ATM users satisfaction as a workable strategy on creating loyal customer. On the
other hand, the researcher didn’t find any researcher conducted at Adama.

To fill the above listed research gaps, this study is set out to assess the effect of automated teller
machine services quality on customer satisfaction: experience from some selected CBE in
Adama, to see determinants of customer loyalty in the case of commercial bank of Ethiopia as
explanatory study and to provide suggestions to the organizations as how they can create loyal
customer in order to achieve the organizational goals.

1.3 Research Questions

This study has tried to address the following research questions:
1. Does reliability influence customer satisfaction toward ATM banking?
2. Does assuranceinfluence customer satisfaction toward ATM banking?
3. Does empathyinfluence customer satisfaction toward ATM banking?
4. Does tangibilityinfluence customer satisfaction toward ATM banking?
5. Does responsivenessinfluence customer satisfaction toward ATM banking?

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 1.4 Objective the Study

1.4.1 General Objective

The overall objective ofthe study was to identify the effect of automated teller machine services
quality on customer satisfaction: experience from some selected CBE in Adama.

1.4.2 Specific Objectives

Specifically this study is set out to:

1. To examine the effect of reliability on customer satisfaction toward ATM banking

2. To assess the effect of assurance on customer satisfactiontoward ATM banking
3. To investigate the impact of empathy on customer satisfaction toward ATM banking
4. To assess the impact of tangibility on customer satisfaction toward ATM banking
5. To determine the impact of responsiveness on customer satisfaction toward ATM
banking

1.5 Research Hypothesis

The researcher pointed out the following hypothesis that indicates the positive or negative
relationship of overall satisfaction of customers towards electronic banking, with different
components of service quality.

H0: Reliability has no significant impact on customer Satisfaction towards ATM banking.
H1: Reliability has positive significant impact on customer Satisfaction towards ATM banking.
H0: Assurance has no significant impact on customer satisfaction towards ATM banking.
H1: Assurance has a positive significant impact on customer satisfaction towards ATM banking.
H0: Empathy has no significant impact on customer satisfaction towards electronic banking.
H1: Empathy has a positive significant impact on customer satisfaction towards electronic
banking.
H0: Tangibility has no significant impact on customer satisfaction towards ATM banking.
H1: Tangibility has a positive significant impact on customer satisfaction towards ATM banking.
H0: Responsiveness has no significant impact on customer satisfaction towards ATM banking.

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H1: Responsiveness has a positive significant impact on customer satisfaction towards ATM
banking.

1.6 Significance of the Study

The study has tried to assess the ATM service on customer satisfaction and finds a solution for
the identified problems. Findings from this study was assist management of the banks to know
the problems associated with ATM service and to facilitate the customer with quality service
because the efficiency of banks relies on customer satisfaction, Banks was formulating strategy
and policy in terms of future investment and also customers were benefit in terms of improved
service and reduced time spent at the banks hence, resulting in customer satisfaction and
customer confidence in the banking sector.

1.7 Scope of the Study

The scope of this study is discussed in three dimensions (i.e. Theoretically, Geographically, and
methodologically).

Theoretical Scope: this study was designed the effect of Automated teller machine services
and user satisfaction with reference to commercial Banks of Ethiopian in Adama while after all
banks’ ATMs interoperable. Satisfaction is defined strictly in term of pleasure derived by users
in relation to ATM services. Therefore, this study was limits to the assessment of the customers’
satisfaction on ATM banking service but concerning: ATM Service Quality regarding to
Tangibility, Responsiveness, Empathy, Assurance and Reliability.

Geographical Scope: The study was confined to assessment of the customers’ satisfaction on
ATMs’ service on commercial Banks of Ethiopian in Adama town as case study area which has
large concentration of ATMs and focusing on those banks with reasonable number of card holder
and to fairly represent the card holder population in the city.

Methodological Scope: The study has usedboth descriptive and explanatory survey design and
in the course of researching both primary and secondary data was used. With regarding to the
secondary sources various publications, books, and journals articles regarding the subject matter
were included. Population of the study were active ATM card users in Adama town from each
respective commercial banks of Ethiopia and to achieve the research objectives, well designed

6
five point Likert scale questionnaire was used to gather data from sample respondents selected
on convenience sampling basis.

1.8 Definition of Key Terms

ATM:-an electronic telecommunications device that enables customers of financial institutions
to perform financial transactions, such as cash withdrawals, deposits, transfer funds, or obtaining
account information, at any time and without the need for direct interaction with bank staff.

Customer:-The people who are using Automated Teller Machine (ATM) service in CBE.

Customer Satisfaction: It is a measure of how products and services supplied by a company

meet or surpass customer expectation. Customer satisfaction is defined as the number of
customers, or percentage of total customers, whose reported experience with a firm, its products,
or its services (ratings) exceeds specified satisfaction goals.

Customer Perception: is the subjective assessment of actual service received or experienced

and whether they are satisfied with the quality of the service (Zeithmal and Bitner, 1996).

1.10 Organization of the Paper

This paper has five chapters with different sections and sub sections. The first chapter holds the
introductory part of the paper and it contains background of the study, statement of problem,
basic research questions, research objectives, research hypotheses, scope of the study, and
significance of the research. The second chapter focuses on the theoretical, empirical and
conceptual literature review regarding ATM service and customer’s satisfaction in different
countries experience. The third chapter discuses research methodology regarding research design
and approach, target population/study participants, sampling design/procedure, source of data
and method of data collection, data collection procedure, data analysis. The fourth chapter
focuses on results and discussions. Finally, the last and fifth chapter deals about major finding of
the study, conclusion and recommendation of the study.

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 CHAPTER TWO
2 REVIEW OF RELATED LITERATURE
2.1 Theoretical Review
The ATM is an innovative service delivery mode that offers diversified financial services like
cash withdrawal, funds transfer, cash deposits, payment of utility and credit card bills, cheque
book requests, and other financial enquiries (khan, 2010).

The ATM card helps the customer to be identified by a plastic ATM card with a magnetic stripe
or a plastic smartcard with a chip. The security is provided by the customer entering a personal
identification number (PIN). As a result of this, the number of bank customers preferring to use
self service delivery systems is on the increase. This preference is attributed to increased
autonomy in executing the transactions (Meena, 2015). Jane (2000) also noted that the customer
is identified by inserting a plastic ATM card with a magnetic strip or a plastic smart card with a
chip that cont0ains a unique card number and some security information such as the expiration
date, and the ATM’s are conveniently placed in public places with the aim of enabling customers
to transact without the help of a teller of banking officer.

An automated teller machine (ATM), also known as a Cash Machine it is a computerized

telecommunications device that provides the clients of a financial institution with access to
financial transactions in a public space without the need for a cashier, human clerk or bank teller.
On most modern ATMs, the customer is identified by inserting a plastic ATM card with a
magnetic stripe or a plastic smart card with a chip that contains a unique card number and some
security information such as an expiration date. Authentication is provided by the customer
entering a personal identification number (Cronin, 1997). Most ATMs are connected to interbank
networks, enabling people to withdraw and deposit money from machines not belonging to the
bank where they have their account or in the country where their accounts are held thus enabling
cash withdrawals in local currency and they are often identified by signs above them indicating
the name of the bank owning them.

ATM services or Automated Teller Machine is known as primary banking services that have
been affecting modern banking activities today. Hailey (1975) defines ATM as machine of which
it will reduce the operating cost for banks in the context of the customers can carry some basic
banking demands by themselves or without going to transaction office of the banks. Another
8
definition from ATM services is found from the study of Guile and Quinn (1988) whether an
ATM services is known as electronic telecommunication between the banks and their customers
to perform financial transactions.

Moutinho (1992) as cited in Pahwa and Saxena (2011) stated that ATM is the abbreviation of
automated teller machine which acts as a teller in a bank who takes and gives money over the
counter and it was the first well known machines to provide electronic access to customers. With
the appearance of automated teller machine, banks are able to serve customers outside the
banking hall because ATMs are placed inside or near the banks and also outside the banks such
as shopping malls, restaurant, airports or any places that people may gather. In another article
Mcandrew (2003) talked about the various utilities of ATMs which has given worldwide
popularity. The utilities include withdrawal of cash as per convenience of the customers than
during the banking hours at branches. Besides providing off time and off shore services, there is
reduction of cost of servicing.

Weiner (1999) pointed out that the total number of ATM transaction has more than doubled over
the last ten years and is estimated to reach near 11 billion and total number of ATM terminals in
United States has tripled over last ten years. This shows that ATM cards have become most
popular non cash instruments in USA and its popularity has been explosively increasing
throughout the world. Investment opportunities, reduction in costs, satisfaction of customers and
competitiveness are motives to install and add new ATM to the existing network. With
appearance of ATMs, some limitation of time and geographic location has been resolved. And it
also resulted in speed of transactions and saved time for customers.

2.1.1 The History of ATM Service in Ethiopia

CBE is the pioneer in introducing ATM service for local users in 2001 with its fleet of eight
ATMs located in Addis Ababa. An automated teller machine or ATM is a computerized
telecommunications device that provides a financial institution’s customers a method of financial
transactions in a public space without the need for a human clerk or bank teller. Reliable is a visa
branded debit card issued by CBE to facilitate the exchange of funds without paper or hard copy.
It is either domestic or international. The domestic card is valid only in Ethiopia while the
international card is used to make international transactions. Security is provided by the customer

9
entering a personal identification number (PIN). Using an ATM, customers can access their bank
accounts in order to make cash withdrawals (credit card cash advances) and check their account
balances.

2.1.2 The Concept of Service Quality

Service is a patch up activity to fulfill some one’s need in the market. Service is something,
which can be experienced but cannot be touched or seen (Zeithaml et al, 2006). A service is any
activity or benefit that one party can offer to another which is essentially intangible and does not
result in the ownership of anything. On the other hand, different meaning could be devoted to the
word quality under different circumstances. It has been defined in a different way by various
scholars based on their perceptions. Some of the prominent definitions include "Quality is
predictability" (Elsaghier and Nathan, 2013), “conformance to specification or requirements”
(Ibojo, 2015 and Ibojo et al, 2013), “fitness for use” (Mahmud, 2015) and "customer's opinion"
(Kursunluoglu, 2014). These initial efforts in defining quality originated largely from the
manufacturing sector.

A solid foundation in defining and measuring service quality was emanated in the mid-eighties
by Gronroos (1984) and Parasuraman et al (1985). Defining service quality is difficult as
compared to product quality due to some features unique to services including intangibility,
inseparability, heterogeneity and portability (Kursunluoglu, 2014 and Parasuraman et al, 1988
and 199, Shanka, 2012 and Meron, 2015). In presence of these limitations, Parasuraman come up
with a comprehensive way of defining service quality using SERVQUAL Model (Parasuraman
et al, 1988, 1990, 1991, 1994 and 1997).

2.1.3 Benefits of Using ATMs

Tague (2010) observed that a plastic Automatic Teller Machine card linked to your bank account
makes financial transactions a breeze by eliminating the waste of writing cheques or the dangers
of carrying large sums of cash. The debit cards benefit both the card holders and the banks. Some
of the benefits of ATM technology are bank decongestion, reduced cost of transactions for both
customers and banks. This has drastically reduced banking time. The ability of ATM card holder

10
to make withdrawal at any point in time and anywhere close to him or her is one of the greatest
benefits of ATM technology. This has reduced the agony of one running out of cash.
Another nice opportunity provided by ATM to users is the flexibility to move around with
minimal cash and thereby reduce incidence of theft. ATM technology when properly used was
making the building of cashless society possible. ATM card has assisted travelers in obtaining
cheaper exchange rate. Foreign ATM machines offer users access to the wholesale exchange
rate, which is often less expensive than paying service fees when exchanging cash or travelers
cheques in foreign bank or currency exchange office (Odachi, GebrielNwabounu, 2011).

2.1.4 Benefits of ATMs to Banks

ATMs reduce queues in banking halls
ATMs save banks costs of hiring tellers by automating many transactions
ATMs have become the customers’ most popular and most used interaction with the bank
and an important Customer Relations Management (CRM) and customer retention tool.
Each off-premise & branded ATM becomes an advertising and marketing tool by putting
the banks’ signage in front of thousands of additional potential banking customers in
traditionally non-bank locations
Branded off-premise ATMs extend the banks visibility to current customers, providing
visible reassurance of their banks reach beyond the branch
ATMs enable banks to re-design branches into more sophisticated customer services and
sales outlets
ATMs have enabled some banks and non-bank financial institutions to develop
successful business models
ATMs reject unfit banknotes, helping maintain banknote standards
ATMs create extended service hours provided by banks beyond traditional 9-5 banking
hours

2.1.5 Benefit to Card Holders

According to Olga (2003): ATMs allow citizens to draw cash outside of banking hours,
enabling retail cash purchases around the clock.

11
 ATMs save cardholders transport costs and time by bringing self-service banking
intoconvenient, non-branch locations near to where they live, work and shop in a variety
of locations such as shopping malls, supermarkets, convenience stores, railway stations,
hotels, airports, petrol/gas stations, post offices, university campuses, restaurants and
bars, etc., creating time-saving convenience for modern citizens
ATMs provide cardholders travelling outside their country with a reassuringly familiar,
uniform and comprehensible interface for obtaining cash
ATMs allow for easy payment of utility bills and other functions like topping up air-time
on cell/mobile phones
ATMs can help cardholders monitor their bank accounts outside of bank hours through
balance enquiries
ATM debit cards use debit rather than credit teaching financial self-discipline as opposed
to credit card payments which can, and do, get citizens into debt.

2.1.6 Customer Satisfaction

Customer satisfaction has been defined by many authors. Oliver (1980) defined customer
satisfaction as the product of the accumulated experience of a customer’s purchase and
consumption. Porter and Miller, (1985) defined customer satisfaction as a post consumption
evaluation that meets or exceeds expectations. Customer satisfaction, in a Competitive
marketplace where businesses compete for customers, customer satisfaction is seen as a key
differentiator and increasingly has become a key element of business strategy. Customer
satisfaction ratings can have powerful effects in organizations. They focus employees on the
importance of fulfilling customers‟ expectations. Furthermore, when these ratings dip, they warn
of problems that can affect sales and profitability. These metrics quantify an important dynamic.
When a brand has loyal customers, it gains positive word-of-mouth marketing, which is both free
and highly effective.

2.1.7 ATM Service Delivery and Customer’s Satisfaction

The service delivery in the world has been changed significantly by technology. This is
supported by Humphrey and Hancook (1997), views that the role of technology in today’s
international financial community has changed significantly. ATMs have made banking services
easy for bank customers. According to Hoq and Amin (2010), customer satisfaction is the most

12
important driver of commercial banks, since higher customer satisfaction leads to a lower
customer intention to switch banks. Thus, technology is one of the powerful instruments in
providing faster, reliable and more efficient services to customers. Shifting the service from the
traditional way of banking to the modern banking, Furthermore, it is also known that many of the
banks have started to adopt a sort of e-banking services including ATM, either to cope with
thecompetition or serve the customers in an efficient and effective given that many of the banks
have started to adopt the ATM banking service.

According to Komal (2009) the study establishes that ATM services enhance operations and
customer satisfaction in terms of flexibility of time, add value in terms of speedy handling of
voluminous transactions which traditional services were unable to handle efficiently and
expediently. The machine can enable customers to deposit and withdraw cash at more convenient
time and places than during banking hours at branch (Muhammad, 2010). Lovelock (1996) stated
that the ATM technology customizes service offerings, reduces waiting time for customers,
serves as an alternative channel for service delivery and provides vital information needed by
customers in the shortest possible time. The ATM consists of three very important parts, namely
the hardware, software (the running program) and the communication modules for the
transaction processing to be completed. In order for a bank to have an uninterrupted ATM
service operation, it must have a very efficient internet service provider, reliable electric power
supply from both the national grid and stand by generators and modern ATM hardware and
software.

Brownlie and Moutinho (1989) recommended that some consumers have positive attitudes
towards Automated Teller Machines based on dominant perceptions of
convenience/accessibility/ease of use. Reichheld and Sasser (1990) have recognized the benefits
that customer satisfaction delivers to a bank. For instance, the longer a customer stays with a
bank the more utility the customer generates. This is a result of a number of factors relating to
the time the customer spends with a bank. Patrico et al, (2003) noted that effective service
delivery is a new or significantly improved service concept that is taken into practice. Banks
without usage of technology in the banking sector cannot provide customers with a satisfactory
service. Kumbhar (2011) stated that effectiveness of service provision has a significant
relationship with overall customer satisfaction. Effective service delivery is positively related to

13
customer satisfaction in that, when a customer perceives that the delivery mode of the
transactions that the bank is supposed to offer is quite good, the more the customers will be
satisfied with the bank services.

2.1.8 Measuring Customer Satisfaction

Customer satisfaction has been described by organizations as a critical factor in this success.
Measuring satisfaction is generally linked to the so-called confirmation/disconfirmation process
that comes about when customers believe that their expectations have been met (Simpson, 2006).
Similarly, the expectations and perceptions of customers and the actual experiences of the
customer, which in turn produces a level of perceived quality that is influenced by expectations
(Lau et al, 2013). Satisfaction can be determined by subjective (e.g. customer needs, emotions)
and objective factors (e.g. product and service features). Service quality and customer
satisfaction are distinct concepts, although they are closely related. Various researches have been
done to measure customer satisfaction in service industry (Munusamy et al, 2010).

The search done by Chidambaram&Ramachandran (2012) found that “cleanliness, security,

value for money and courtesy of staff determine customer satisfaction”. Simpson (2006),
Revealed that cleanliness and comfort, convenience of location, prompt service, safety and
security, and friendliness of employees are key determinants of customer satisfaction. A study
conducted by Lau et al (2013) claimed that the vital factors are the behavior of employees,
cleanliness and timeliness. On the other hand, the study by Nathan and ElSaghier (2013)
concluded that staff quality, property qualities, and value are the top three factors that determine
customers’ satisfaction.

In general, satisfaction is a person’s feelings of pleasure or disappointment that result from

comparing a product’s or service’s perceived performance or outcome to the expectation (Lau et
al, 2013 and Ibojo, 2015). If the performance falls short of expectations, the customer is
dissatisfied. If the performance matches the expectations the customer is satisfied. If the
performance exceeds expectations, the customer is highly satisfied and delighted (Elsaghier and
Nathan, 2013 and Ibojo et al, 2013).

14
 2.1.9 The Relationship between Service Quality and Customer Satisfaction
In marketing term, customer satisfaction is described as a measure on how product or services
supplied by organization meet customers’ expectation (Kottler and Keller, 2012). This is one of
the important keys to ensure business is successful because customers’ satisfaction will
determine the market growth of the organization in the future. Satisfaction is measured through
the level of product quality, quality of service provided, location where the product or service is
purchased, and price of the product or service (Shanka, 2012 and Sintayehu, 2015).

Saghier (2013) stated that quality whether it is satisfying or exceeding customers’ needs and
expectation depends on the customers who use the services and judge the quality of the product
or services provided. According to Cronin and Taylor (1992) satisfaction super ordinate to
quality-that quality is one of the service dimensions factored in to customer satisfaction
judgment.

Satisfaction can be associated with feelings of acceptance, happiness, relief, excitement, and
delight (Sintaheyu, 2015 and Navaratnaseelana and Elangkumaran, 2014). Most research
confirms that the confirmation or disconfirmation of pre-consumption expectations is the
essential determinant of satisfaction (Cronnin and Taylor, 1992 and Meron, 2015). This means
that customers have a certain predicted product performance in mind prior to consumption.
During consumption, customers experience the product or service. Kottler and Keller (2012)
stated that satisfaction is the post purchase evaluation of products or services taking into
consideration the expectations. Researchers are divided over the antecedents of service quality
and satisfaction. Whilst some believe service quality leads to satisfaction, others think otherwise
(Kottler and Keller, 2012).

The studies of Sulieman (2011) suggest service quality leads to customer satisfaction. To achieve
a high level of customer satisfaction, most researchers suggest that a high level of service quality
should be delivered by the service provider as service quality is normally considered an
antecedent of customer satisfaction (Beliyu, 2012; Ibojo et al, 2013 and Ibojo, 2015). As service
quality improves, the probability of customer satisfaction increases (Munusamy et al, 2010).
Quality was only one of many dimensions on which satisfaction was based; satisfaction was also
one potential influence on future quality (Mahmoud, 2015; Shanka, 2012 and Meron, 2015).

15
Service quality is an important tool to measure customer satisfaction (Saghier, 2013). Empirical
studies show that the quality of service offered is related to overall satisfaction of the customer
(Kheng et al, 2010 and Murugiah&Akgam, 2015). Saghier (2013) stated that reliability,
tangibility and empathy positively related with customer satisfaction. Sulieman (2011) found that
reliability, tangibility, responsiveness and assurance have significant and positive relationship
with customer satisfaction. Meanwhile empathy was found to have a significant and negative
effect on customer satisfaction. Moreover, the result of Ravichandran et al (2010) indicates
responsiveness is the only significant dimension of service quality that affects the satisfaction of
customers positively.

Based the above literature, the detail discussion of the five service quality dimensions are
discussed below:

2.1.9.1 Reliability

Reliability refers to the ability to deliver expected standard at all time, how the organization
handle customer services problem, performing right services for the first time, providing services
within promised time and maintaining error free record (Meron, 2015 and Shanka, 2012). Meron
(2015) and Mahmud (2015) stated that reliability contains the accurate order of fulfillment,
accurate record, accurate quote, accurate billing, and accurate calculation of commissions which
keep the service promising to the customer.

According to Kursunluoglu (2014), there are the two important factors that give effects to the
banking service; consistency and dependability. First, consistency refers to uniformity or
compatibility between things or parts. This means that the quality is always the same, doing
things in the same way and having the same standards. Kursunluoglu (2014) recommend that
service quality should include consistency of service output around an ideal target value
determined by customers. Banks need to address the changing needs in predictable and
consistent manner. Second, dependability refers to the assurance of providing services as
expected.

16
 2.1.9.1.1 Assurance

The assurance dimension in SERVQUAL refers to the knowledge and courtesy of employees
and their ability to inspire trust and confidence (Parasuraman et al., 1988). When we take
decision for banking variety then friends, service quality, family impact, banks reliability and
company image stood very important and major factors for customers of banks (Shanka, 2012).
Employees characteristics similar to their capability, equal of respect in the direction of
customers and competence in the banking measures of procedures for operation (Mahmud,
2015).

2.1.9.1.2 Empathy
Parasuraman et al. (1985) defined empathy as a caring and individual attention that the firm
provides to its clients. It contains giving individual attention to employees who understand the
needs of their customers and cure search of private sector banks, provide individual attention and
easy operation time; give personal attention, and understand the specific needs of customers.
Fitzsimmons and Fitzsimmons (2001 cited in Mahmud, 2015) suggest that empathy contains
approachability, sensitivity, and efforts to understand customer needs. Parasuraman et al. (1985
and 1988) defined empathy as the ability to make customers feel happy to comeback, especially
by staff contacts. Additionally, the SERVQUAL model indicates that satisfaction is related to the
size and direction of disconfirmation of a person’s experience when he/she faces his/her initial
expectations (Parasuraman et al, 1985).

2.1.9.1.3 Tangibles

The tangibles involve the firms’ representatives, physical facilities, materials, and equipment as
well as communication materials (Meron, 2015). Furthermore, Physical environmental
conditions appeared as a clear evidence of them care and attention paid for the details offered by
the service provider (Mahmud, 2015). More specifically, Parasuraman et al. (1985) define the
tangibility appearance of physical facilities, equipment, personnel, and written materials.

2.1.9.1.4 Responsiveness
Responsiveness is defined as the ability to respond to customer requirements timely and flexibly.
Banks have to adopt technology to deliver their services and at same time reduce cost due to
creation of value added services for customers (Mahmud, 2015 and Meron, 2015). It is crucial

17
for banks to better understand the changing customers’ needs and adopt the latest information
technology system in order to compete more effectively with global organizations (Meron, 2015
and Shanka, 2012).

2.2 Empirical Review

Kibrom (2010) conducted a research on Customer Satisfaction and Service Loyalty in Wegagen
bank, Mekelle branch using a sample size of 200 respondents’. The main objective of the study
was to assess customer satisfaction and service loyalty. He found that Customer satisfaction
instigates service loyalty significantly as can be evidenced from the regression output. The
results also demonstrate the importance of improving the quality of service delivery, which in
turn enhances customer satisfaction and service loyalty. It gave implications for differentiated
marketing strategies according to the perceived value for customer satisfaction and service
loyalty. As to the overall level of satisfaction of customers, majority of the customers (84%) are
satisfied with the service delivery. Regarding whether or not dissatisfied customers intend to
switch to other banks, the result revealed indicates a weak relationship in between customer
satisfaction andswitching intentions. Finally, he recommended that the bank should improve the
service delivery in a way that boosts customers’ satisfaction and service loyalty.

Ibojo (2015) conducted a study on Impact of Customer Satisfaction on Customer Retention: A

Case Study of a Reputable Bank in Oyo, Oyo State. Nigeria. The objective of study was to
examine the impact of customer satisfaction on customer retention. The objectives were: to
determine the relationship between customer satisfaction and customer retention, and to examine
the impact of customer satisfaction on customer retention. Survey research design was adopted
for this study. Primary and secondary sources of data were used. The primary data includes a
structured questionnaire used to elicit information from the target respondents who were
customers of the reputable bank in Oyo while the secondary data encompass the use of related
materials, journals and periodicals. ANOVA and t-statistics were used to test the hypothesis
while regression analysis was used to analyze the data. The findings show the R2 -value of 0.717
which reveals that customer satisfaction independently accounts for 71.7% of the variation in
customer retention. The f-statistics of 41.173 reveals that the model is statistically significant at
0.05 significant levels. It was concluded that the effective satisfaction of customers will give

18
room for customer retention. Moreover, there is a significant relationship between customer
satisfaction and customer retention.

Gabriel et al (2015) conducted their study on entitled” impact of the ATM technology in
delivering service quality in the banking industry in Ghana case of GCB bank LTD” To achieve
the study objective descriptive survey research design was used. The study was focus on
customers and staff of GCB Bank Ltd in ten branches in Greater Accra Region. The purposive
sampling technique was used to 272 customers and staff from 10 branches, both close ended and
open ended questionnaire was developed and distributed and collected from sampled
respondents. To draw a meaningful, valid and reliable conclusion, and make relevant
recommendations, descriptive and statistical analysis in the form of tables was drawn based on
percentages.

The results of the study generally indicated that three top-most challenges customers are faced
with at the ATM were identified in the study and these included,” accounts being debited without
dispensing”, followed by “ATM being sited at an obscured area”,and“the ATM not dispensing
the denomination required” by customers ranked third. These show that the ATM service has
contributed positively to the provision of banking services in GCB Bank Ltd. and the Ghanaian
Banking industry as a whole. Finally, the study recommends the management of GCB to take
immediate steps to address challenges before it becomes too late and lose customers to
competitors and develop new user friendly, competitive systems and applications that will enable
customers harness the full benefit of the ATM.

KanikVerma (2014) conduct comparative study on’’ analyzing the satisfaction level of
customers of Union Bank of India and Yes Bank based on various aspects related to ATMs”. In
the study, data related to various aspects of ATMs services like location of ATMs, processing
time, availability of cash, quality of notes, ATMs grievances settlement, safety & security,
sufficient numbers of ATMs etc. was collected from 40 ATMs users of Union Bank of India and
Yes Bank through convenient sampling, and the data were analyzed by using statistical technique
and tools like Descriptive Statistics, Percentage Method, and Ranking Method. The findings
reveal that ATM services of public sector bank are providing more satisfactory services as
compared to public sector bank in this study. Therefore, private sector banks should concentrate
their attention on ATM services quality to improve customer satisfaction. Majority of the

19
respondents in both the banks dissatisfied with the ATM Grievance settlement and sufficient
number of ATMs in city, working conditions, cash availability, quality of notes. The study
suggested that bank administration should concentrate on proper mechanism on Grievances
settlement; besides that, customers’ data is increasing day by day correspondingly the number of
ATMs should be increased, so it leads to customers’ satisfaction.

Abebe (2013) conducted exploratory study on entitled” ATM service quality and customers’
satisfaction in Ethiopian banks”, Zemen, Dashen, and Commercial Bank of Ethiopia in Addis
Ababa were study’s target population from them 150 respondents were selected through quota
sampling method . Study results shown that majority of the customers are satisfied with ATM
banking service regarding accuracy and ease of use. But some of the customers felt that ATM
service of their banks have to be improved for their utmost satisfaction regarding convenience
and responsiveness.

Ephreame (2016) conducted his masters’ thesis on “assessment of ATM Banking service and
satisfaction of customers in Ethiopian private Banks case of PSS member banks”. The study used
descriptive research design and the target population of the study was six PSS member private
banks in Addis Ababa city. The questionnaire was distributed to 369 and collected data from
respondents they are selected conveniently. The study identified that majority of the respondents
agree that the number of ATMs across distance is fair, and the ATMs have user friendly system
environment to handle transactions and get services. The study finding result shows that majority
of the customers are dissatisfied with the automated teller machine services and they don’t
recommend others to use the ATM service.

2.3 Conceptual Framework

Research literature suggests that service quality is a more specific judgment which can lead to a
broad evaluation of customer satisfaction (Oliver, 1993; Parasuraman et al, 1985, 1988, 2005;
Cronin and Taylor, 1994). Service Quality is an antecedent of customer satisfaction (Anderson
and Sullivan, 1993; Anderson and Fornell, 1994) and precursor in the measurement of customer
satisfaction. The higher level of perceived service quality results in increased customer
satisfaction. When perceived service quality is less than expected service quality customer will
be dissatisfied (Jain and Gupta, 2004).

20
The below conceptual frame work helps for the study to assess customers’ satisfaction with
ATM banking in selected commercial bank of Ethiopia by providing a clear picture for assessing
Customers’ perceived service quality of ATM banking through the measurement of their
perceptions of performance of ATM SQ attributes in each of the five dimensions (Tangibles,
responsiveness, reliability, assurance, and empathy).

Figure 1: Conceptual Framework of the Study

Independent Variables Dependent Variable

Reliability

Assurance

Empathy Customer
Satisfaction

Tangibles

Responsivenes
s

Source: Own survey, 2021

21
22
 CHAPTER THREE

3. REASERCH DESIGN AND METHODOLOGY

3.1 Research Approach

Due to time and cost management and covid 19 epidemic diseases the study applies a
quantitative approach only as a systematic and structured, was aim at obtained information from
respondents. Results was obtained from such an approach are easily quantifiable and has a
potentially high degree of accuracy.

3.2 Research Design

According to Kothari, C. (2004), a research design is the arrangement of conditions for

collection and analysis of data in a manner that aims to combine relevance to the research
purpose with economy in procedure. In fact, research design is the conceptual structure within
which research is conducted; it constitutes the blueprint for the collection, measurement, and
analysis of data.

The researcher has employed both descriptive and explanatory research design. One the one
hand, descriptive research design help the researcher to look into the phenomenon understudy or
a process in its natural contexts in order to get its overall picture instead of taking one or some of
its aspects and manipulating it in a simulated or an artificial setting. This method also used for
the reason that it describes the existing facts and practice of different organizations, as well as, it
is economically efficient. On the other hand, explanatory research design helps the researcher to
explain the phenomena an understudy has occurred and to predict its future occurrences.
Moreover, it is also helpful to specify the nature and direction of the relationships between or
among variables understudied (Abiy, et al., 2009).

3.3 Target Population and Sample Size

3.3.1 Population
The target population is the entire population in the study area 44,496 users of ATM service and
theprimary focuses of the study is the selected four branches ATM service users of commercial
bank of Ethiopia in Adama town including branch employees.

23
3.3.2 Sampling Size Determination
As Kothari (2004) has argued, sample size must be determined in a way of assuring the true
representativeness of the general population with reasonable confident level and small sampling
error. From the commercial banks ofAdama town the four branches were purposively selected
then, we select ATM users of the four branches. The sample size of the study was determined by
with the help of Yamane (1967)statistical formula for sample determination.

N 44,496
n= 2 = = 198 ATM users
1+ N e 1+ 44,496∗0.072
Where,
 n –designates the sample size the research uses
 N-Designates the total number of customers in the target population
 e-Designates maximum variability or margin of error 7 % (0.07)
 1-Designate the probability of the event occurring
Table 1: Target Population and Sample Size

SN Branch Target population Sample size Percent

1. Adama main 14,023 62 31.31%
2. Adama 13,539 60 30.30%
3. Abageda 8,729 39 19.69%
4. Gendegara 8,205 37 18.68%
5. Total 44,496 198 100%
Source: Own Computation Survey, 2021

The study target populations were selected with the help of convenience sampling technique in
which the researcher choosing members of population to participate in the study. The target
population is selected through convenience sampling considering easy access to data, cost
effectiveness and easy manageability of the study and the sample size of this study is 198ATM
user and officers working in the branch.

3.4 Data Type

In order to achieve its objectives, the researcher used both primary and secondary data. The
primary data were collected through administering survey questionnaire from ATM users. The
survey questionnaire was developed with including both close and open ended items. The closes

24
ended items were measured with a 5 point Likert scale. To gather the primary from the target
respondent questioner was used.

The secondary data were collected through reviewing different published and unpublished
literatures (Books, Articles, Reports of the companies, archives, and etc).

3.5 Data gathering tools

To gather the primary data, survey questionnaire was distributed to the target respondents. The
questionnaires are structured with close and open ended type. Accordingly, 5 point likert scale
items are prepared for respondents because it is helpful to choose one option from the given
scaling the best align with their views

3.6 Methods of Data Analysis

Simply collecting data does not give meaning in itself. Hence, it has to be filtered, coded, and
analyzed to give complete meaning. Along with this, after the data were collected from the field
it is entered, filtered, coded, and analyzed with the help of the statistical package for social
sciences (SPSS) version 20. Both descriptive and inferential statistics were used to present and
analyze the collected data. From descriptive statistics frequency, mean, SD, percentage were
computed, while from inferential statistics correlation and regression.

3.7 Reliability
The researcher has tried to ensure the reliability of the study by using a standardized
questionnaire that is considered valid. Hence, the method and measurement techniques are high
quality and targeted to measure what is intended to know. Besides, the study samples were
determined from clearly defined population. Hence, it guarantee representativeness and helpful
to produce valid generalizable results.

3.8 Validity

To assure the validity of the study, the survey instrument was piloted with 20 respondents and
the reliability was checked to estimate the internal consistency/reliability.

On the other hand, the validity of findings or data is understood as the correctness or precision of
research findings (Creswell, 2013). In relation to the validity of the quantitative data, standard

25
measurements and instruments was used to maintain validity of measurements. In addition, the
pilot study was used to improve the quality of the questions; formats, arrangements, scales and
the language used thereby enhance the validity of the data.

In order to ascertain validity of the instrument, the initial version of the questionnaire was
translated into the local language (Amharic).

3.9 Research Model

Multiple regression models were used to show the level or extent that the explanatory variable
have on dependent Variable (Customer satisfaction).

CS= α +β1H1+β2H2+β3H3+β4H4+β5H5+ε

Thus

 α (alpha) is constant,
 β (beta) is coefficient of estimate, and
 ε is the error term.

Customer Satisfaction in ATM banking is dependent variable and H1 toH5 are explanatory
variable independent variables Where;

 CS= Customer Satisfaction

 H1= Reliability
 H2= Assurance
 H3= Empathy
 H4=Tangibility
 H5= Responsiveness

3.10 Ethical Considerations

As Creswell (2009) argued in the progress of research, researchers need to respect the
participants and the sites for research. Accordingly, support letter was obtained from
UnityUniversity department of Management for the companies; permission was sought from
eachof the four selected branches before the study was conducted.
26
Purpose of the study and issue of confidentiality was briefly explained by the researcher and
trained data collectors for the study participants. Assuring them that their response will not be
used to harm them and there is no need to write their name or any identification on the
questionnaire has helped to obtain their consent. In addition, they were informed that they can
withdraw from the study at any point of time if they felt unpleasant. Informed verbal consents
were obtained from the study participants and oral agreement was reached.

To have the participants consent, the researcher/data collectors have encouraged them to give
honest response. The researcher/data collectors conducted the study in open places to avoid
disturbances. The data was conducted at places where the participants had preferred. Generally
the data was collected in a way that did not harm the participants’ wellbeing and privacy.

27
 CHAPTER FOUR

4. DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.1. Respondents Response Rate

Table 2:- Response rate

Respondents Targeted Obtained Percent

Customers 198 186 93.93%
Source: Own Computation survey, 2021

Response rate is the proportion of questionnaires that were returned and filled during the study in
relation to total number of questionnaires expected to be filled. A total of 198 questionnaires
were administered and data were collected from ATM user customers in grade three and four
branches of Adama District. From the 198 questionnaires distributed only 186 (93.93%) have
been collected and analyzed using descriptive statistics.

4.2. Discussion for Demographic profile of respondents

Demographic profile indicates the characteristics of the population based on their sex, age,
marital status, educational level and level of employment. It is essential in any research study
because these demographic and background characteristics are later used in report to draw
comparisons among respondents. To find out general background of the customer’s satisfaction
with the use of ATM service provided by Adama CBE branches, the respondents were asked
their background information (see table 3 below).

Table 3: Demographic Profiles of Respondents

No Tittle Description Frequency Percent

1. Gender Male 97 52.15
Female 89 47.85
Total 186 100
4. Age Under 20 15 8.06
21-30 45 24.19
31-40 57 30.64
41-50 42 22.58
Above 50 27 14.52
Total 186 100

28
 10. Marital status Single 69 37.10
Married 93 50.00
Divorced 24 12.90
Total 186 100
14. Educational Illiterate 11 5.91
secondary school and less 33 17.74
background
Certificate 41 22.04
Diploma and Degree 83 44.62
Masters and Above 18 9.67
Total 186 100
20. How long have you Less than 1 years 17 9.13
1-5 years 45 24.19
been with CBE
6-10 years 75 40.32
ATM used? More than ten years ago 49 26.34
Total 186 100
Source: Own Computation survey, 2021

4.2.1. Gender of the Respondent

As indicated on Table 3above from the total of 186 respondents, 97 (52.15%) were male and 89
(47.85%) of the respondents were female. Therefore, we can conclude that during the study
period more of the respondents were males than female participants in using the ATM service.

4.2.2. Age of the Respondent

As it shown on Table 3 aboveout of the total 186 respondents, 15(8.06%) respondents are aged
under 20 years, 45 (24.19%) respondents are aged between 21-30 years, 57 (30.64%) of the
respondents are aged between 31-40, 42 (22.58%) are aged between 41-50, and finally 27
(14.52%) of the respondents are aged above 50 years. Hence, from the data we can understand
that majority of the respondents fall in the working age group which is age “between” 31-40. To
this end, we can say that most of ATM users are from working class population.

4.2.3. Marital Status of the Respondent

As it shown on Table 3 above from the total of 186 respondents, 69 (37.10%) respondents are
single, 93 (50.0%) respondents are married and 24 (12.9%) of the respondents are separated from
their marriage. Hence, the data confirmed that majority of the respondents are single and
married.

29
 4.2.4 Educational Qualification of the Respondent
The study also sought to understand the academic qualifications of the respondents in the
sample; it is presented in Table 3 above. This would help us to see the effect of education on the
ATM user. From the total of 186 respondents, 11(5.91%) are illiterate, 33 (17.74%) attend
secondary school and less, 41 (22.04%) have TEVT certificate, 83(44.62%) have Diploma and
Degree and finally 18(9.67 %) are Masters Holdersand above. Hence, this confirms that most of
the ATM service users are those who have Diploma and Degree.

4.2.5 Customer’s experience years with CBE ATM

With regard to customer’s experience in using ATM service, about 17 (9.13%) have an
experience of Less than 1 years; 45 (24.19%) have an experience of from 1-5 years; 75 (40.32%)
have an experience of 6-10 years and 49 (26.34%) have more than ten years’ experience. From
this we can understand that most of the ATM users have an experience of 6-10 years. The longer
the users experience in using the ATM service serves to evaluate better how effective and
efficient is the ATMservice of CBE.

4.2.6 Reliability Analysis

This quality criterion of the research refers to the consistency of a measure of a concept. This
quality criterion 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 is unacceptable.

Table 2: Reliability test

Variables Cronbach's Alpha N of Items

Reliability .977 7
Assurance .986 3
Empathy .984 5
Tangibility .990 6

30
 Responsiveness .988 5
Source: own computation survey, 2021

As indicated in the table 4, the Cronbach’s alpha values for all the variables considered are
greater than 0.7 and this indicates the items in each of the domains are well understood by the
respondents. Thus, the items have internal reliability and consistency to process the data for
further analysis.

4.3 Descriptive Analysis

Descriptive statistics are used to describe the basic features of the data in a study. They provide
simple summaries about the sample and the measures (Mann, 1995). In this section, respondents
were asked to indicate their agreement/disagreement with each item on a five-point Likert scale
ranging from 1 for “very poor” to 5 for “very good”. The respondents were requested to indicate
their perception on the variables (See table 4 below).

Table 5: Average Mean Score in Reliability Dimension

Descriptive Statistics Reliability

No N Minim Maxim Sum Mean Std.
um um Deviation
1. 1 ATMs not out of 186 1 5 749 4.03 1.098
Order
2. Cash availability in 186 1 5 784 4.22 .957
ATMs
3. ATM card delivery 186 1 5 694 3.73 1.187
System
4. ATM serves 24 186 1 5 799 4.30 .909
hours of a day
5. User friendliness 186 1 5 686 3.69 1.311
of ATM system
6. Speed of ATM 186 1 5 508 2.73 1.415
Operation
7. Accuracy of 186 1 5 676 3.63 1.309
Transaction by
ATMs
Average 186 1 5 699 3.76 1.17
Source: Own Computation Survey, 2021

31
The scores of very poor represent a variable which had a mean score 0 to 1.8 on the continuous
Likert scale; (0≤ very poor<1.8) and poor have been taken to represent a variable which had a
mean score of 1.81 to 2.6 on the continuous Likert scale ;( 1.8≤ poor<2.6). The scores of
undecided have been taken to represent a variable with a mean score of 2.61 to 3.4 on the
continuous Likert scale: (2.61 ≤ undecided<3.4). The mean from score of good 3.41 to 4.2, on
the continuous Likertscale ;(3.41≤ good<4.2) and very good have been taken to represent a
variable which had a mean score of 4.21 to 5.0 on a continuous Likert scale; (3.5≤ very
good<5.0). A standard deviation of >0.7 implies a significant difference on the impact of the
variable among respondents. Data for examining the items were obtained through questionnaires
administered to sample of 186 CBE ATM users in Adama city under study.

4.3.1 Respondents’ Perception of Reliability

The overall mean for the customer perception on ATM based on its reliability is presented in
Table 5 above. The score with the maximum possible score being 5 and the actual average mean
score is greater than half 3.76 with a standard deviation of 1.17, which Linkert scale shows
“Good”. This implies that the ATM service is Reliable for customers. The results of specific
items in the reliability dimension shows that service recipients convince their satisfaction.

Specifically, description of perception of Reliability on ATM service has seven items stated with
mean score. The highest score mean from the dimension of reliability ATM service; ATM serves
24 hours of a daymean 4.30,Cash availability in ATMsmean 4.22, ATMs not out of order mean
4.03, ATM card delivery system and Speed of ATM operationmean 2.73, User friendliness of
ATM system mean 3.69, Accuracy of Transaction by ATMsmean 3.63. Each item display to
what extent does customers are getting advantage from the ATM service depends on reliability.

4.3.2 Respondents’ Perception of Assurance

Table 6: Average Mean Score in Assurance Dimension

Descriptive Statistics Assurance

No N Minim Maxim Sum Mean Std.
um um Deviation
1. Privacy when 186 1 5 596 2.41 1.15
using
ATMs

32
 2. Security at 186 1 5 588 2.52 1.12
ATMs
3. Advise on ATM 186 1 5 580 2.67 1.01
usage and
security
Average 186 1 5 588 2.53 1.09

Source: Own Computation Survey, 2021

The table 6aboveshow that overallaverage mean score (2.53) for all variables in this dimension
are generally Poor. This Poor shows that respondents are unsatisfiedwith CBE ATM service with
concerned to assurance.

Regarding the assurance dimension, the figuredepicts that the highest mean score is (2.67) which
Advise on ATM usage and security. The findings reveal that customers are satisfied by the
Security at ATMs with a mean score of (2.52) and Advise on ATM usage and security with a
mean score of (2.41). Therefore, the above data tell us thatthe assurance of CBE ATM service
low.

4.3.3 Respondents’ Perception of Empathy

Table 7: Average Mean Score in Empathy Dimension

Descriptive StatisticsEmpathy
No N Mini Maxim Sum Mean Std.
mum um Deviation
1. Accessibility of 186 1 5 561 3.74 1.469
employee tosolve
ATM problem
2. Easy access to 186 1 5 700 3.92 1.277
ATMs
3. Fees charged 186 1 5 673 3.85 1.359
4. Convenient 186 1 5 500 3.69 1.399
location
5. The number of 186 1 5 660 3.79 1.452
ATMs across
distance
Average 186 1 5 619 3.79 1.391
Source: Own Computation Survey, 2021

33
In table 7above it is shown that overall empathy score for all variables are generally good.
Accordingly, respondents are satisfied with CBE ATMs service with regard of empathy. See
table 7 above Average Mean Score in Empathy Dimension.

Regarding empathy, one question is showing the lowest mean score is 3.69 and 3.74 for
convenient location of ATMs and Accessibility of employee to solve ATM problem respectively,
this means that customer response is good, hence most of the ATM machines are in
convenientarea. It also shows that customer’saccessibility of employee to solve ATM problems
was almost the same in different areas. However, the score regarding the factors that “Easy
access to ATMs, Fees charged, and the number of ATMs across distance”, shows mean score of
3.92, 3.85 and 3.79, respectively.

4.3.4 Respondents’ Perception of Tangibility

Table 8: Average Mean Score in Tangibility Dimension

Descriptive Statistics Tangibility

No N Minim Maxim Sum Mean Std.
um um Deviation
1. CBE has up-to 186 1 5 630 3.39 1.387
date equipment
and technology
for ATM service
2. Cleanness of 186 1 5 712 3.83 1.236
ATMs and ATM
Stations
3. Number of 186 1 5 643 3.46 1.320
ATMs
per station
4. Appearance of 186 1 5 613 3.30 1.377
Corporate
branding
on ATMs
5. Issuing of clean 186 1 5 714 3.84 1.206
or new notes
6. Issuing of 186 1 5 684 3.68 1.381
readable slips
Average 186 1 5 666 3.58 1.317
Source: Own Computation Survey, 2021

According to the survey, average customers are comfortable with “issuing of clean or new notes,
Cleanness of ATMs and ATM stations and issuing of readable slips” of the ATM service. It is

34
used to be reported to have the highest mean score in this regardissuing of clean or new notes
(3.84), Cleanness of ATMs (3.83) and ATM stations and issuing of readable slips (3.64)
respectively in average dimensions. Hence, the data has indicated that respondents’ overall mean
score for all variables in tangibility dimensions are averagely positive. This shows that
respondents are satisfied with CBE ATMs provider regarding the tangibility of ATMs.In the
other side customers are no longer satisfied with appearance of corporate branding on
ATMs;rather they need to have up-to-date equipment and Number of ATMs per station.

4.3.5 Respondents’ Perception of Responsiveness

Table 9: Average Mean Score in Responsiveness Dimension

Descriptive Statistics Responsiveness

No N Minim Maxim Sum Mean Std.
um um Deviation
1. Quick 186 1 5 536 2.88 1.428
replacement
of lost cards
2. Bank employees 186 1 5 596 3.20 1.467
Friendliness
3. Easy process of 186 1 5 704 3.78 1.402
applying for
ATM cards
4. Returning fast 186 1 5 573 3.08 1.474
swallowed cards
5. Employee speed 186 1 5 589 3.17 1.488
in responding to
ATM problems

Average 186 1 5 592 3.22 1.452

Source: Own Computation Survey, 2021

For responsiveness, as shown in Table 9, the overall mean scores for the respondents’
satisfactions of ATM service satisfaction are undecided. This undecided shows that respondents
are neither satisfied nor unsatisfied with CBE ATMs service with regards to responsiveness.

35
The highest mean score from the dimension of responsiveness was easy process of applying for
ATM cards mean score (3.78), this show customers are satisfied by the easy process of applying
for ATM cards. In the other side “Bank employee’s friendliness, employee speed in responding
to ATM problems, returning fast swallowed cards and Quick replacement of lost cards” have
mean score of 3.20, 3.17, 3.08 and 2.88 respectively.

4.3.6 Overall Level of Service Quality for Customer Satisfaction

Table 10: Overall level of service quality for customer satisfaction

Overall Satisfaction
No Linkert Scale Frequency Percen Valid Cumulative
t Percent Percent
1. Strongly Dissatisfied 27 14.5 14.5 14.5
2. Dissatisfied 27 14.5 14.5 29.0
3. 27 14.5 14.5 43.5
neutr
al
4. Satisfied 53 28.5 28.5 72.0
5. Strongly satisfied 52 28.0 28.0 100.0
Total 186 100.0 100.0
Source: Own Computation Survey, 2021

As indicated in the table 9 above, 53(28.50%) of the respondents are satisfied, 52 (28%) are
Strongly satisfied, and the rest one all the three Linkert scale are the same percent, which are
Strongly Dissatisfied, Dissatisfied and Neutral27 (14.5% %) with the service quality dimensions
for customer satisfaction in Commercial Bank of Ethiopia in Adama branch. This shows majority
of the respondents are satisfied with the service of the bank.

4.4 Correlation Analysis

The Measures of correlation (here designated in general as r) have the representative of being
dimensionless and scaled to lie in the range −1 ≤ r ≤ 1 When there is no correlation between two
variables, r = 0. When one variable increases as the second increases, r is positive. When they
vary in opposite directions, r is negative. Correlation is also significant at the p < 0.01 level (2-
tailed), 0 < r < 0.1 = little or no relationship, 0.1< r < 0.5= weakly related, 0.5 < r < 0.9 =
strongly related.

Table 11: Correlation Analysis

36
 Correlations
Reliability Assurance Empathy Tangi Responsiveness
bility
Reliability Pearson 1 - - - -
Correlation
Sig. (2-tailed) - - - -
N 186 - - -
**
Assurance Pearson .914 1 - - -
Correlation
Sig. (2-tailed) .000 - - -
N 186 186 - - -
** **
Empathy Pearson .925 .967 1 - -
Correlation
Sig. (2-tailed) .000 .000 - -
N 186 186 186 - -
** **
Tangibility Pearson .954 .935 .957** 1 -
Correlation
Sig. (2-tailed) .000 .000 .000 -
N 186 186 186 186 -
** **
Responsive Pearson .911 .963 .980** .949** 1
ness Correlation
Sig. (2-tailed) .000 .000 .000 .000
N 186 186 186 186 186
**. Correlation is significant at the 0.01 level (2-tailed).
Source: Own Computation Survey, 2021

In table 11above, the five dimensions of service quality which serves as antecedent to overall
service quality shows different correlation coefficients. The highest correlation is between
Empathy (.980) and customer satisfaction followed by the correlation between tangibility (.968),
responsiveness (.965), Assurance (.952) and reliability (.940). This indicates there is strongly,
positive and significant relationship between tangibility, empathy, reliability, responsiveness and
assurance, and customer satisfaction. Although all these correlations show highly positive and
strong relationships, it shows that the strengths of the relationships vary. Thus, the service
quality dimensions vary in the degree to which they determine customer satisfaction.

4.5 Regression Analysis

Regression analysis is a statistical process for estimating the relationship among variables. It
includes many techniques for modeling and analyzing several variables when the focus is on the
relationship between a dependent variable and one or more independent variables.

37
Table 12: Regression Model Summary

Model R R Adjusted Std. Error Change Statistics

Square R Square of the R F df1 df2

Estimate Square Change Sig. F

Change Change
a
.986 .973 .972 .235 .973 1282.027 5 180 .000
a. Predictors: (Constant), Tangibility, Assurance, Reliability, Responsiveness, Empathy
b. Dependent Variable: customer satisfaction

Source: Compiled by author from SPPSS version 20, 2021

Table 12 used to investigate the relationship between service quality dimensions (independent
variables) and customer satisfaction (dependent variable). As per the regression result, the
adjusted R square of .972 indicates 97.2% of the variation in the dependent variable i.e. customer
satisfaction is explained by this five predictors (tangibles, reliability, assurance, empathy and
responsiveness); while only2.8% customer satisfaction is influenced by other variables outside
the variable under study.

Table 13: ANOVA

ANOVAs
Model Sum of df Mean Square F Sig.
Squares
1 Regression 354.978 5 70.996 1282.027 .000b

Residual 9.968 180 .055

Total 364.946 185
a. Dependent Variable: Customer satisfaction
b. Predictors: (Constant), Tangibility, Assurance, Reliability, Responsiveness, Empathy.
Source: Compiled by author from SPPSS version 20, 2021

Table 13 shows the ANOVA test of the model which confirms customer satisfaction as a
function of service quality dimension used by the researcher. The result shows that the set of
predictors is statistically significant at predicting customer satisfaction at 0.01 level of

38
significance. The results further support the research model, which shows service quality as an
antecedent of customer satisfaction.
Table 14: Model Analysis

Model Unstandardized Standardiz t Sig. Co linearity

Coefficients ed Statistics
Coefficien
ts
B Std. Beta Toler VIF
Error ance
1 (Constant) -.005 .058 -.081 .935
Reliability .119 .046 .108 2.565 .011 .085 11.77
1
Assurance -.021 .053 -.020 -.392 .695 .057 17.59
3
Empathy .601 .071 .624 8.495 .000 .028 35.58
5
Tangibility .272 .057 .264 4.765 .000 .050 20.17
3
Responsive .022 .063 .024 .358 .721 .034 29.02
ness 1
a. Dependent Variable: Customer satisfaction

Source: Compiled by author from SPPSS version 20, 2021

As per multiple regression coefficients result (Table 14), customer satisfaction is

positivelyinfluenced by all service quality dimension. The table further helps us to assess the
effect of each predictor had on customer satisfaction. For example, in the B column for reliability
the value .282 means that for every one-unit increase in the response to this question, satisfaction
increases by .272 units. From the above table tangible(.297) had the highest influence followed
by reliability (.282). But responsiveness (.125) had the least influence on customer satisfaction
compared to the other dimensions. By using the B coefficients for all significant predictor, we
can create a prediction equation to use for overall customer satisfaction.

39
Service quality dimensions (tangibility p<0.01, reliability p<0.01, responsiveness p<0.01, and
empathy; p<0.05) have positive and significant effects on customer satisfaction. On the other
hand, assurance has a negative and statistically insignificant influence on customer satisfaction.

The multiple regression equation was in the below form.

CS= α +β1H1+β2H2+β3H3+β4H4+β5H5+ε

CS = -.005 +.119H1-.021H2 +.601H3+.272H4+.022H5

4.6 Testing Hypothesis

Hypothesis testing is based on standardized coefficients beta and P-value to test whether the
hypotheses are rejected or not. The table 15below showed the summarized results of the
hypotheses tested against the p values in the previous tables.

Table 15: Summary of Hypotheses Testing

customer satisfaction (Model) R2 β

Reliability- Customer Satisfaction .108**
Assurance- Customer Satisfaction -.020
Empathy- Customer Satisfaction .624**
Tangibility- Customer Satisfaction 97.3% .264**
Responsiveness- Customer Satisfaction .024*
Note: ** p<0.01; *p<0.05

Source: Own Computation Survey, 2021

Table 15depicted that Customer Satisfaction is individually and co-jointly predicted by

Tangibility (β=0.264, p<0.01), Reliability (β=0.264 p<0.01), Responsiveness (β=0.024, p<0.05),
Empathy (β=0.624, p<0.01), and Assurance (β=-0.020, p>0.05; statistically insignificant). These
variables together explain 97.3% of the variance on Customer Satisfaction.

Hypothesis 0 (null hypothesis): Reliability has no significant impact on customer Satisfaction

towards ATM banking.

Hypothesis 1 (research hypothesis): Reliability has positive significant impact on customer

Satisfaction towards ATM banking.

40
Table 15 showed that the standardized coefficient beta and p value of reliability were positive
and significant (β= 0.108, p < 0.01). Thus, it is accepted that, Reliability has positive significant
impact on customer Satisfaction towards ATM banking.

Hypothesis 0 (null hypothesis): Assurance has no significant impact on customer satisfaction

towards ATM banking.

Hypothesis 1 (research hypothesis): Assurance has a positive significant impact on customer

satisfaction towards ATM banking.

As shown in table 15, p-value is not significant (p > 0.05), and the beta value of assurance was
negative (β = -0.020). Therefore, this hypothesis is rejected.

Hypothesis 0 (null hypothesis): Empathy has no significant impact on customer satisfaction

towards electronic banking.

Hypothesis 1 (research hypothesis): Empathy has a positive significant impact on customer

satisfaction towards electronic banking.

Similarly, on table 15 also indicated that, the standardized beta and p - value of empathy were
positive (β = 0.624), and significant at 99% confidence level (P < 0.01). As a result, it was
accepted that Empathy has a positive significant impact on customer satisfaction towards ATM
banking.

Hypothesis 0 (null hypothesis): Tangibility has no significant impact on customer satisfaction

towards ATM banking.

Hypothesis 1 (research hypothesis):Tangibility has a positive significant impact on customer

satisfaction towards ATM banking.

Table 15, revealed that tangibility has a positive and significant effect on customer satisfaction
with a beta value (β = 0.264), at 99% confidence level (p < 0.01). Therefore, it was accepted that,
Tangibility has a positive significant impact on customer satisfaction towards ATM banking.

Hypothesis 0 (null hypothesis): Responsiveness has no significant impact on customer

satisfaction towards ATM banking.

41
Hypothesis 1 (research hypothesis):Responsiveness has a positive significant impact on
customer satisfaction towards ATM banking.

Table 15 also indicated that, responsiveness has a positive and significant effect on customer
satisfaction with a beta value (β = 0.024), with (p < 0.05). Therefore, Responsiveness has no a
positive significant impact on customer satisfaction towards ATM banking

42
 CHAPTER FIVE
5 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.3 Summary of the Study Finding

From the 198 questionnaires distributed only 186 (93.93%) have been collected and analyzed
using the descriptive statistics.

Demographic characteristics of respondent from the total of 186 respondents, 97 (52.15%) were
male and 89 (47.85%) of the respondents were female. In this regard malesare more ATM user
than female.According to Age respondents, the majority of the respondents fall in the working
age group which is 31-40 age group, 57 (30.64%).From the total of 186 respondents, 69
(37.10%) respondents are single, 93 (50.0%) respondents are married and 24 (12.9%) of the
respondents are separated from their marriage. Hence, it confirmed the majority of the
respondents are single and married. Depending on educational background 83(44.62%) have
Diploma and Degree. This is the highest rate from others; this confirmed that most of the users of
ATM service have more educational qualification which is Diploma and Degree.
Customer’sexperience in using the bank ATM service 75 (40.32%) has an experience of 6-10
years. This is the highest rate from the others.

Customer satisfaction yield Cronbach’s alpha (α) =.996. Variables considered are greater than
0.7 and this indicates the items in each of the domains are well understood by the respondents.
Depending on reliability average mean score is greater than half 3.76 with a standard deviation
of 1.17, which Linkert scale shows “Good”. This implies that the ATM service Reliable for
customers.

Descriptive statistics of respondent perception of dependent variable was discussed as follow.

Overall averages mean score of assurance is (2.53) for all variables in this dimension are
generally poor. This Poor shows that respondents are unsatisfied with CBE ATM service with
concerned to assurance.Overall empathy score for all variables in this dimension are generally
Good, mean score 3.79. This shows that respondents are satisfied with CBE ATMs service with
regard of empathy. Mean score (3.58) for all variables in tangibility dimensions arepositive. This

43
shows that respondents are satisfied with CBE ATMs provider with involved to tangibility of
ATMs.The overall mean scores (3.22) for the respondents’ satisfactions of ATM service
satisfaction are undecided. This shows that respondents are neither satisfied nor dissatisfied with
CBE ATMs service with regard of responsiveness.

As per the regression result, the adjusted R square of .972 indicates 97.2% of the variation in the
dependent variable i.e. customer satisfaction is explained by this five predictors (tangibles,
reliability, assurance, empathy and responsiveness); while only 2.8% customer satisfaction is
influenced by other variables outside the variable under study.

Finally, the hypothesis result shows that, except hypothesis two all are accepted, which is
assurance is negative impact on customer’s satisfaction, so it was rejected and tangibles,
reliability, empathy and responsiveness are having positive significant impact on customer
Satisfaction towards ATM banking.

5.2 Conclusion

This study confirms most of the respondents are fairly satisfied with bank ATM services. Unlike
assurance, the tangibility, responsiveness, empathy and reliability are positively and significantly
related with customer satisfaction. In the other side customer satisfaction was negatively affected
by assurance.

Most attributes perceived low in performance are related to personnel and management decision
making. Competition in banking industry is getting tough, and to create competitive advantage
and customer satisfaction only through ATM technology cannot bring the intended result, as it
were in the early introduction of ATM to the market. Hence, banks to create competitive
advantage and achieve more customer satisfaction needs to improve supporting service and
managerial decision, working on those areas identified by the researcher as a weakness in ATM
banking.

44
 5.3 Recommendations
Based on major findings, the study has suggested the following recommendations to be taken by
concerned parties at different level.

In the side of the institution, Banks ought to have its own ATM technicians in order to assuredly
give service and maintain machines immediately.

Bank should consider having staff specifically assigned to carry out routine checks with the
customers so as to improve on their response to queries as this one area of concern.Moreover, the
management of bank should ensure that officers in charge of ATMs should always made enough
cash available so as to enable the machine dispense cash to customers whenever need arises.
Besides, the bank management should increase the ATM machine access in every of their
branches and some selected areas like hospital, shop and hotels. Ethiopian commercial banks
should give training to employees how to treat the customers and how to solve the ATM banking
service problems. Along with this, quality of notes is should negatively affecting quality of
service provided to customer through ATMs. The quality of notes needs to be improved to avoid
note jams in the ATMs.

On the Ethio Telecom,there is a need to improve on the communication link by the banks
negotiating with EthioTelecom to avoid interruptions which results in communication break
between the ATM and main server resulting failure to process the transaction accurately.

To this end, all banks should work hard to create awareness to the importance and convenience it
brings for them, among the public at largeto increase ATM card holders and also should adopt a
holistic strategy to promote ATM usage atthe branch.

5.4 Limitations of the Study

This study was limited in different aspects. On the one hand, due to the nature of the topic under
studied the researcher has failed to employ mixed research approach. Hence, the study was
quantitatively captured. On the other hand, due to time and financial constraints the study has
failed to investigate the research problem and to measure change or stability over time.

45
 5.5 Future Research

The researcher assessed customer satisfaction on ATM banking focusing only in Adama selected
Banks. Hence, it will be necessary to replicate this study on a sample different in demographic
characteristics such as having low levels of education and indifferent regions of the country, for
comparison of the study results. This also would help in developing ATM banking as strategic
access channel for bank products and services.

46
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49
 APPENDIX 1:
SURVEY QUESTIONNAIRE
Unity University
School of Graduate Studies MBA
Questionnaire for Customers of CBE ATM user
Part I: Inquiry for ATM user

Dear respondents,
This questionnaire is prepared for research purpose entitled “assessment of customer satisfaction
towards automated teller machine services quality: experience from some selected CBE in
Adama”. You are expected to give accurate data to make proper analysis. Your participation is
completely voluntary. I would be indebted if you co-operate with me in filling the questionnaire.
This questionnaire contains two sections and three (3) pages that were expected to take
approximately 20 to 30 minutes to complete. You are kindly requested to respond to the
questions based on the instructions under each section. No need to write your name in the
questionnaire. Since the questionnaire is being used for academic purpose, the information
gathered will remain strictly confidential. If you have any enquiry you can reach the student
researcher via the following address:
For further information, please contact BemnetYemaneby the following address: Tel:
0910201288

Part II: General Instructions

I. Please provide your responses by marking a tick (√) in the relevant boxes.
II. To the questions with alternatives that do not match to your response, please write
your appropriate response on the space provided
III. Do not write your name on the questionnaire.

50
Part III: Respondent Profile
Please put a ‟ √ ‟ mark in the appropriate space to indicate your answer

No Tittle Description Mark ‟ √ ‟

21. Gender Male
Female
23. Age Under 20
21-30
31-40
41-50
Above 50
28. Marital status Singe
Married
Divorced
31. Educational Illiterate
General secondary school or less
background
Certificate
Diploma and Degree
Masters and Above
36. How long have you Less than 1 years
1-5 years
been with CBE ATM
6-10 years
used? More than ten years ago

Part IV: Questionnaires for respondents

Please respond by putting a ‟ √ ‟ mark in the box that indicates your extent of agreement
ordisagreement with each statement. The value of each answer will be weighted as follows: VP
=1, P =2, U =3, G =4 and VG =5. Where
 VP = Very Poor
 P= Poor,
 U=Undecided,
 G= Good
 VG = Very Good
Reliability VP P U G VG
37. ATMs not out of order
38. Cash availability in ATMs
39. ATM card delivery system
40. ATM serves 24 hours of a day
41. User friendliness of ATM system

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42. Speed of ATM operation
43. Accuracy of Transaction by ATMs
Assurance VP P U G VG
44. Privacy when using ATMs
45. Security at ATMs
46. Advise on ATM usage and security
Empathy VP P U G VG
47. Accessibility of employee to solve ATM problem
48. Easy access to ATMs
49. Fees charged
50. Convenient location
51. The number of ATMs across distance
Tangible VP P U G VG
52. Accessibility of wide range of services
53. Cleanness of ATMs and ATM stations
54. Number of ATMs per station
55. Appearance of corporate branding on ATMs
56. Issuing of clean or new notes
57. Issuing of readable slips
Responsiveness VP P U G VG
58. Quick replacement of lost cards
59. Bank employees friendliness
60. Easy process of applying for ATM cards
61. Returning fast swallowed cards
62. Employee speed in responding to ATM problems

52
Appendix II:
SPSS result
No Tittle Description Frequency Percent
63. Gender Male 97 52.15
Female 89 47.85
Total 186 100
66. Age Under 20 15 8.06
21-30 45 24.19
31-40 57 30.64
41-50 42 22.58
Above 50 27 14.52
Total 186 100
72. Marital status Single 69 37.10
Married 93 50.00
Divorced 24 12.90
Total 186 100
76. Educational Illiterate 11 5.91
secondary school and less 33 17.74
background
Certificate 41 22.04
Diploma and Degree 83 44.62
Masters and Above 18 9.67
Total 186 100
82. How long have you Less than 1 years 17 9.13
1-5 years 45 24.19
been with CBE
6-10 years 75 40.32
ATM used? More than ten years ago 49 26.34
Total 186 100

Descriptive Statistics
N Minim Maxim Sum Mean Std.
um um Deviation
1.ATMs not out of 186 1 5 749 4.03 1.098
order
2.Cash availability in 186 1 5 784 4.22 .957
ATMs
3.ATM card delivery 186 1 5 694 3.73 1.187
system
4.ATM serves 24 186 1 5 799 4.30 .909

53
hours of a day
5.User friendliness of 186 1 5 686 3.69 1.311
ATM system
6.Speed of ATM 186 1 5 508 2.73 1.415
operation
7.Accuracy of 186 1 5 676 3.63 1.309
Transaction by
ATMs
1.Privacy when using 186 1 5 596 3.20 1.265
ATMs
2.Security at ATMs 186 1 5 588 3.16 1.378
3.Advise on ATM 186 1 5 580 3.12 1.424
usage and security
1.Accessibility of 186 1 5 561 3.02 1.469
employee to solve
ATM problem
2.Easy access to 186 1 5 700 3.76 1.277
ATMs
3.Fees charged 186 1 5 673 3.62 1.359
4.Convenient 186 1 5 500 2.69 1.399
location
5.The number of 186 1 5 660 3.55 1.452
ATMs across
distance
1.Accessibility of 186 1 5 630 3.39 1.387
wide range of
services
2.Cleanness of 186 1 5 712 3.83 1.236
ATMs and ATM
stations
3.Number of ATMs 186 1 5 643 3.46 1.320
per station
4.Appearance of 186 1 5 613 3.30 1.377
corporate branding
on ATMs
5.Issuing of clean or 186 1 5 714 3.84 1.206

54
new notes
6.Issuing of readable 186 1 5 684 3.68 1.381
slips
1.Quick replacement 186 1 5 536 2.88 1.428
of lost cards
2.Bank employees 186 1 5 596 3.20 1.467
friendliness
3.Easy process of 186 1 5 704 3.78 1.402
applying for ATM
cards
4.Returning fast 186 1 5 573 3.08 1.474
swallowed cards
5.Employee speed in 186 1 5 589 3.17 1.488
responding to ATM
problems
Valid N (listwise) 186
Correlations
Realibi Assuran Empath Tangib Responsive
lity ce y ility ness
Realibility Pearson 1 .914** .925** .954** .911**
Correlation
Sig. (2-tailed) .000 .000 .000 .000
N 186 186 186 186 186
Assurance Pearson .914** 1 .967** .935** .963**
Correlation
Sig. (2-tailed) .000 .000 .000 .000
N 186 186 186 186 186
Emphathy Pearson .925** .967** 1 .957** .980**
Correlation
Sig. (2-tailed) .000 .000 .000 .000
N 186 186 186 186 186
Tagebility Pearson .954** .935** .957** 1 .949**
Correlation
Sig. (2-tailed) .000 .000 .000 .000
N 186 186 186 186 186
Responsivene Pearson .911** .963** .980** .949** 1
ss Correlation
Sig. (2-tailed) .000 .000 .000 .000
N 186 186 186 186 186

55
**. Correlation is significant at the 0.01 level (2-tailed).

Overall satisfaction
Frequency Percent Valid Percent Cumulative
Percent
Valid Very poor 27 14.5 14.5 14.5

Poor 27 14.5 14.5 29.0

Undecided 27 14.5 14.5 43.5

Good 53 28.5 28.5 72.0

Very Good 52 28.0 28.0 100.0

Total 186 100.0 100.0

Model Summary
M R R Adjuste Std. Change Statistics
od Squa dR Error of R F df1 df2 Sig. F

el re Square the Square Cha Change

Estimat Change nge

e
1 . .973 .972 .235 .973 1282 5 180 .000
986 .027
a

a. Predictors: (Constant), Tangibility, Assurance, Realibility, Responsiveness, Empathy

ANOVAa
Model Sum of df Mean F Sig.

56
 Squares Square
1 Regression 354.978 5 70.996 1282.02 .000b
7
Residual 9.968 180 .055
Total 364.946 185
a. Dependent Variable: Overall satisfaction
b. Predictors: (Constant), Tangibility, Assurance, Reliability, Responsiveness, Empathy

Coefficientsa
Model Unstandardize Standar t Sig. Collinearity
d Coefficients dized Statistics
Coeffici
ents
B Std. Beta Toler VIF
Error ance
1 (Constant) -.005 .058 -.081 .935
Reliability .119 .046 .108 2.565 .011 .085 11.771
Assurance -.021 .053 -.020 -.392 .695 .057 17.593
Empathy .601 .071 .624 8.495 .000 .028 35.585
Tangibility .272 .057 .264 4.765 .000 .050 20.173
Responsiv .022 .063 .024 .358 .721 .034 29.021
eness
a. Dependent Variable: Overall satisfaction

57