ASSESSMENT OF THE CHALLENGES AND BENEFITS OF ATM BANKING SERVICE (THE CASE OF COMMERCIAL BANK OF ETHIOPIA)

Abstract

Despite the growth of ATM banking users worldwide, commercial bank of Ethiopia customers continue to conduct most of their banking transactions using traditional methods. The general objective of the study is to examine ATM-banking service in the Commercial Bank of Ethiopia with respect to the challenges which restrict customers from taking advantage of ATM-banking system and expected benefits derived from the system. From the general objective four specific issues were explored such as to assess the current statues of CBE with regard to ATM banking technology, to asses customers attitude towards ATM banking, to assess the major challenges of ATM banking and to assess the benefits realized from the technology. To acquire the intended information the researcher used different data collection instruments. The major source of primary data for conducting this paper are ATM banking customers of selected three CBE branches located in Addis Ababa administration zone via questionnaires that were both objective and close ended in nature. And CBE management information system department used as a main source of secondary data. The secondary data was mainly used to assess and see the status of ATM banking service in CBE whereas the primary data was used to address the challenge and benefits of ATM- banking technologies from the customer’s perspective. The target population of the study was 18,300 active ATM-banking customers from three branches; from this number 156 samples were used. Convenience sampling technique was used for data collection. The collected data was analysed by using descriptive method of data analysis such as tables, charts, graphs, percentages and mean. With regard to validity and reliability test the researcher provide supporting evidence that a measuring instrument does in fact measure what it appears to measure. Preparing questionnaires to customer of CBE will be a way of maintaining validity. The Cronbach’s alpha was 0.826 closer to cronbach’s alpha coefficient value of 1.0 which is high and showing strong internal consistency among the measuring items. Based on the finding the challenges for the adoption of ATM banking include lack of awareness in the society, poor telecommunication infrastructure, frequent power interruption, machine break down and being out of service, lower limit of cash withdrawal, debit of balance from account with no cash payment and some other challenges are stated. Among the different benefits, cost saving, time saving, 24/7 service, conveniences, ease of use, availability of ATM machines, trend of organizations paying of salary through bank etc. are listed by their rank from the most to the least opportunity. Based on the finding of the study the recommendations listed were the bank should have use diesel generators to avoid minimize power interruption, the Bank should work with Ethio-telecom to resolve service interruptions and minimize the brunt of the consequences of unreliable internet services or the bank management should provide an additional telecommunication network to the branch so that it can rely on that network when the present network goes offline. also should have to create awareness about the technology, should have to redesign and upgrade their ATM machines to avoid challenges faced by customers because of TM machines, the bank should have take fast response and corrective action to customers dispute because on today’s strong computation among banks the customer need no to waste time,