Factors influencing customer demand for automated teller machine services in Nairobi: the case of Standard Chatered and Barclays Banks of Kenya
Mwangi, Peter Kihara
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This study aimed at establishing the factors influencing individual customer demand for ATM services in Standard and Barclays banks in Nairobi. The driving force for this study was that since the introduction of the first ATM in Kenya by Standard Chartered Bank 1989, Kenyans, have witnessed proliferation of these facilities in the same and other major commercial banks in this country such as Barclays, Kenya Commercial bank and National bank. After only 9 years since the introduction for the first ATM, there are over 74 ATMS in place today and plans are there to install more. This rapid growth is a pointer that the demand for quality ATM customer services is a major issue among Kenya bank customers. In order to carry out study, a sample of 10 branches of Standard and Barclay’s banks in Nairobi with an ATM facility were selected. Interviews and questionnaires were used to capture both quantitative and qualitative data. The target was to administer questionnaires to 6 respondents per selected branch so as to get a sample of 60 respondents in total. In the final analysis, the researcher managed to get 47 respondents. The response rate was 78.3 percent. Data was analyzed using the SPSS computer programme. Factor analysis and descriptive statistics were used to discuss the results. The findings of this study indicated that the most important factor influencing ATM service demand according to customers is convenience of 24-hour banking followed by time taken to make a withdrawal and banks ATM advertising. Other important factors are age, income, ATM problems, sex, education, occupation and prestige. From the management point of view, the most important factor is ATM advertising followed by occupation and time taken to make a withdrawal. Other factors include sex, education, age, income, and convenience of 24-hour banking, ATM problems and prestige. On the other hand the most common ATM problems experienced by ATM users are ATM location problems (ATMs located in insecure places), insufficient cash in most popular ATM centres, Card retention by ATM cash machines and Faulty ATMs. PIN insecurity, phantom withdrawals (withdrawals which the ATM records but the customer denies) and problem of ATM fraudsters were considered minor. By and large, the study revealed that 61.7 percent of all ATM users were at least statisfied with the operations and services offered by ATM facilities while 66 percent of the customers felt that ATMs are very reliable and offer them quality customer services since they work more often than not. This may explain why majority of the ATM users (66 percent) use the facility at least once a week. Major recommendations that came out of the study are that; 1. 1 Bank management should ensure that their ATMs offer efficient 24 - hour services at all times without breaking down or running out of cash. Standby generators should be installed in all branches with an ATM to cushion against power failures. 2. Banks management should develop an efficient customers service programme to ensure minimized and fair queuing system and speedy and accurate services. 3. Management should offer quick solutions to customer complaints such as ATM problems on the other hand, security should be provided at all times especially in ATMs which are located in hidden insecure places at night or during the weekends. 4. The bank should increase ATM advertising and promotional campaigns in order to attract more customers. 5. Finally the banks should explore the possibility of operating a shared ATM network in Kenya also locating their ATMs away from banking locations like air ports, super markets, and other busy points so that customers can access their accounts wherever they are.
- MST-Commerce