An Assessment of Customers’ Satisfaction on ATM Service

Delivery with Reference to Dashen Bank

Yalew Gorfu
Lecturer, Faculty of Business, St. Mary’s University College. P.O.Box
18490, Addis Ababa, Ethiopia

Abstract
In the 1990s and in the beginning of the twenty-first century, there has been a
growing interest in understanding the main service quality dimensions that
customers use in evaluating the service quality level, which in turn determines their
level of satisfaction. This paper examines the level of customer satisfaction in ATM
service delivery with reference to Dashen Bank. The paper, using primary and
secondary sources of data, has shown that ATM service customers in the case
company use different service quality dimensions (attributes). Service quality is
usually defined as the degree of alignment between customers' expectations and
their perceptions of the service received. In this paper, SERVQUAL was used as
technique to measure customer satisfaction in Dashen bank ATM service delivery.
The aim is to explore the most important strength and weaknesses of Dashen bank
in ATM service delivery. The growing importance of ATM machines as another
service delivery channel by banks to their customers lead to a number of
supposition and deductions, made on the value creation of ATM service delivery
and its extent of use. In the light of this, a profound and comprehensive study was
conducted with the aim to first, determine the extent of use and satisfaction of ATM
service delivery and secondly determine the type of customer expectations on ATM
service delivery with reference to Dashen Bank.Measurement was accomplished by
the subtracting expectation from perceptions resulting in a service quality score (gap
score). Positive or zero scores would reflect ideal or adequate service quality
offered by the bank. A negative score would be indicative of a service experience
that did not meet customer expectations. Using the SERVQUAL questionnaire
provided, quantifiable reasoning to the research questions in each dimension could
be obtained so that precision, objectivity and rigor replaced hunches, experience and
intuition as a means of investigating problem areas.
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Background and Statement of the Problem
Hill and 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 the 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
Kotler (2003); he explains satisfaction as a function of perceived
performance and expectations. If the performances fall short of expectation
the customer is dissatisfied. If the performance matches the expectation the
customer is satisfied, while when the performance exceeds the expectation
the customer is highly satisfied or delighted. The growth of technology in the
delivery of services has had a dramatic effect on the nature of the core
offering. Gilbert (1997) defines this process the “revolution” that has taken
place in technological development in the past two decades.
The nature of service offered by organizations has changed over the
past two decades. This change has been influenced by the development of
storage and speed of data transfer, particularly in electronic funds transfer
known as EFTPOS. Whole new industries have emerged (Bradley, 1993),
including news retrieval services and video conferencing. At present, Dashen
Bank is involving itself in issuing locally used Debit cards. The cards
currently issued are all VISA branded payment cards and the service is
available in the selected existing locations at Dembel City Center, Sheraton
Addis, Hilton Hotel, Dashen Tana Area Bank, Dashen main Area Bank,
Dashen Management Area Bank, Admas Pavilion Building, Dashen Piaza
Area Bank, Wabe Shebele Hotel, and Dashen Awassa Area Bank. Although,
there is a remarkable program in the expansion of ATM service delivery,
there are observable problems in meeting customer expectations, so this
research ahs been conducted with the aim to find out problems and forward

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possible suggestions, that would enable the company to provide efficient and
effective ATM service delivery.
When customers evaluate the quality of the service they receive from
a banking institution, they use different criteria, likely to differ in their
importance. While several criteria are important, only a few are most
important. These determinant attributes are the ones that will define service
quality from the consumer’s perspective (Loudon and Della Bitta, 1988).
However, many established models of service quality have tended to focus
on expectations and marginalize the issue of degree importance. One of the
most widely used model to measure perceived service quality was developed
by Parasuraman et al. (1985; 1988). This conceptual model indicated that
customers’ perception of service quality is influenced by a series of
(expectations-performance) gaps, hindering the delivery of high service
quality. This disconfirmation-based model has been the object of some major
criticisms, including ambiguity in the definition of expectations and its
applicability to a variety of industries (Teas, 1993, 1994; Cronin and Taylor,
1992, 1994). Another weakness of this model is that for it to function
correctly, expectations must remain constant, but some scholars, as Carman
(1990), argue that expectations change with familiarity with the service.
Finally, the framework does not explicitly consider the relative importance
of different attributes of service (although it may be that expectations serve
as some kind of proxy for importance – at least in terms of decisions
regarding the management of service quality).
Dashen Bank has made a ground breaking effort in introduction and
expansion of payment card service in Ethiopia. However, noting this
praiseworthy accomplishment is not to mean the service is flawless. There
are a number of problems observed in its operations as described below.
Currently, there exist several different types of ATM machine terminals that
are employed by merchants worldwide. Each type of terminal is capable and
supposed to make life easier for the merchant and the customer. Goods and
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services can now be purchased with just the swipe of a card. Lines move
faster as merchants achieve an even higher level of customer satisfaction.
Plus merchants can have the credit card funds attributed to their own bank
account in forty-eight hours or less. This saves the merchant from extra trips
to the bank and the hassle of filling out countless deposit slips. Merchants
have a variety of credit card processing terminals to choose from, so they can
find the perfect solution to meet their business needs.
The Bank Point pin pad is the smallest credit card terminal as it fits
right into the customer’s hand. This ensures an extra source of security when
customers or merchants are typing in debit and credit information. Last but
not least a personal computer can be used as a credit card terminal with the
right compatible software. This software enables the merchant to run online
and offline credit card transactions. This option is best for merchants who
have their own websites or mail-order catalogs or small internet service
providers. The other is related to ATM (Automated Teller Machines). This
service provides for withdrawal of cash using VISA card without the need to
fill out withdrawal forms, writing checks or waiting in line for personnel of
the bank to process the transaction. However, these machines are not
available everywhere, VISA card holders might not be able to use this either
around their living areas or work places. In addition, the amount of cash
withdrawal that can be making using a VISA card within 24 hrs is limited to
Birr 3000. This disregards the needs of customers to make withdrawals from
their account as they wish and ignores uninvited occurrences that call for an
additional amount of cash withdrawal. To investigate the problem stated
above the following research questions were raised.

This research paper tried to find answers to the following basic research
questions7

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A. What are the specific ATM service quality dimensions (attributes) with
the highest and lowest value of customers’ expectation for ATM service
delivery;
a) Specific ATM service quality dimensions (attributes) with the
highest customer expectation value;
b) Specific ATM service quality dimensions (attributes) with the
lowest customer expectation value;
B. What are the ATM specific service quality dimensions with the highest
and lowest value of customers’ perception for ATM service delivery;
a) Specific ATM service quality dimensions (attributes) with the
highest customer perception value;
b) Specific ATM service quality dimensions (attributes) with the
lowest customer perception value;
C. What are the specific ATM service quality dimensions (attributes)
with the highest and lowest gap score value of customers’ for ATM service
delivery;
a) Specific ATM service quality dimensions (attributes) with the
largest gap score;
b) Specific ATM service quality dimensions (attributes) with the
smallest gap score;
D. Are customers satisfied with the level of ATM service coverage in
Dashen Bank?
E. What are the core ATM service quality dimensions (attributes) that
consumers use to evaluate ATM service delivery in Dashen Bank?

Research Design and Methodology

Conceptual Framework
Among other things, the level of customers’ satisfaction is recognized
as dependent on the quality of service delivered to the target market. Hence,

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customers handling require special attention to their needs and, once settled,
criterions call the organization to adapt the marketing strategy and ensure it
to be a client-oriented one. According to Kotler (2002), customer satisfaction
is a person’s feeling of pleasure or disappointment resulting from comparing
a product’s perceived product performance in relation to his\her expectation.
Moreover, Hill and Alexander (2003) defined customer satisfaction as a
measure of how organization’s total product performance in relation to a set
of customer requirements is perceived; customer satisfaction is in the
customer mind and it may or may not conform to the reality of the situation.
Venugopal and Raghu, (2004), defined a service as an activity or benefit that
one party can offer to another that is essentially intangible and does not
result in the ownership of anything, even though its final output may or may
not be tied to a physical-product.
One of the most basic concepts in marketing is the marketing-mix,
which are the elements an organization controls and that can be used to
satisfy or communicate with customers. According to Jerome McCarthy
(1960), traditional marketing-mix is composed of four P’s: product, price,
promotion, and placement. These elements appear as core design variables in
any marketing plan. However, in selling pure services additional marketing-
mix elements are required, referred to as “extended marketing-mix elements”
that include people, process, and physical evidence. However, no single
variable has a greater predictive validity with regard to customers’
satisfaction on bank service delivery, more particularly with reference to
ATM service delivery. Perspectives on bank service quality can be classified
on the basis of a conceptual framework that describes quality of ATM
service delivery. The most frequent used way to do this is to depict ATM
service delivery as a productive system, in which inputs are transferred into
outputs.

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 Input Process Output

!
"

Figure1: The Input-Process-Output Framework of Customers’ Satisfaction

on ATM Service Delivery

In the Input-Process-Output (IPO) framework, in which “Input”

refers to the entry requirement, “Process” refers to the ATM service delivery
of the case company, and “Output” refers to the level of customers’
satisfaction on ATM service delivery. According to the productivity system
view, the success of the bank service delivery system is seen as depending on
the attainment of the aspired output (Satisfaction, dissatisfaction, or delight).
This view underlines the output\outcome\impact indicator as predominant or
even the only type of quality indicator that need to be monitored. The IPO
model is popular and comprehensive in conceptualizing quality and to have
an operational understanding of quality. Basing on this model, this study
have tried to define quality of ATM service delivery from the specific
perspective of input variables like considering customers’ expectation,
company’s promises, quality of service delivered, and others as a parameter
of quality ATM service delivery. According to Kotler (1998), customer
service is to give what we promised on time and refers to every possible
value from the goods and services customer are purchasing. It is the actions

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companies can take to add value to the basic goods and services. Moreover,
Johanson (2000) pinpointed companies by doing a better job in order to
satisfy their customers’ needs and wants, and find out customer-centered
companies are committed at building customers, not just building a product.

Research Method
To collect the data needed and to address the above mentioned problems
descriptive research method were used.

Population, Sample Size, and Sampling Technique

Treating the whole ATM service users in the case company as a source
of primary data could not be possible due to resource constraints; the
population was represented by sample elements.
The Purpose of this research is to gain a better understanding of level of
customer satisfaction in ATM service delivery of Dashen bank from the
customer perspective;
For the study sample respondents were selected from the Addis Ababa
area because it was convenient for the researcher and it has taken less time to
conduct research;
To seek answer to the above mentioned research questions ATM
service users of Dashen Bank and VISA section manager were considered
with the intention of assessing satisfaction level of ATM service users in the
case company;
As a unit of study, 200 sample respondents (ATM users) were selected
by using convenience sampling technique from the specified location to
make generalization towards the total population, as per the explanation
made by Motholtre (2007) on sample size determination.

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Types of Data Used
Both primary and secondary data were used in order to make the study
complete and achieve the stated objectives:
Primary data include responses gathered from Dashen Bank ATM service
users and interview responses from VISA section manger;
Secondary data include data which helps the researcher for assessing
customers’ level of satisfaction obtained from the company’s record and
from other different books, pertaining to research under consideration.

Data Gathering Instruments

In order to collect the above mentioned types of data the following
instruments were employed:
The primary data were acquired through structured questionnaire
incorporating a total of 23 close-ended questions. This was supplemented
by collection of data through unstructured interview conducted with the
VISA section head at Dashen Bank about the delivery of service demanded
by ATM customers;
Secondary data were collected through reading secondary sources.

Data Analysis Techniques

Quantitative and qualitative data analysis techniques were used in this study.
To summarize the findings, percentages and mean value of customer
expectations and perceptions, and gap scores were computed to get the total
picture of the data collected from sample respondents.
Then, the summarized data were presented in the form of tables and
analyzed through qualitative data analysis techniques.

Data Presentation and Analysis

Out of the 200 survey questionnaires that were distributed to
respondents for this study, 180 useable questionnaires were filled and
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returned giving a response rate of 90 per cent, which was considered
satisfactory for the analysis purpose. This analysis proceeded by identifying
the relevant dimensions of service using the items generated from the focus
groups and these were then examined in more detail for purposes of
comparison between themselves and across respondents.
It is clear from the SERVQUAL results that there is a gap between
what Dashen Bank’s VISA card customers expect and what the service firm
is providing. A lot of criticism, over a number of issues, has been published
about the SERVQUAL instrument but this instrument does clearly identify,
and has identified, weaknesses in Dashen Bank’s services on which
management should further work. The research findings show that
SERVQUAL identified key service quality shortfalls and is a more than
sufficient yardstick to measure service quality in a bank. Ziethaml and
Parasuraman (2004) stated that a good listening system could incorporate
approaches to address all possible reasons for not understanding what
customers expect. Reading the customers comments and connecting it to
what the research data has revealed shows that administration and VISA card
section do not know what customers expect, so knowing what customers
expect is the first and most important step in better delivering a quality
service.
This section of the thesis is devoted to the precise presentation of the
study and briefly describes how the study was conducted. Moreover, it
presents the major findings of the study as discussed under chapter four.
According to the data collected about the general characteristics of the
respondents, male respondents with the age range of 36-45 constitute the
largest portion of the population, 63.9% and 67.8% respectively. Moreover,
with respect to the educational background and occupation of the
respondents more than half of the respondents (64.5%) do have either first
degree or second degree and above and most of the respondents indicated
that they are employed in a private firms. Finally, respondents indicated that
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(58.3%) of them earn a monthly income between 2001-5000 (in ETB),
followed by (22.2%) who earns a monthly income of 5000-10,000 (in ETB).
With respect to the data presented about mean value of customer expectation,
perception, and gap score for the tangibility service quality dimension
respondents indicated that they have the higher expectation (3.83) for the
bank’s materials, associated with the service (such as pamphlets) to be
visually appealing. However, based on their response, the highest mean
value of perception (4.08) and the highest gap score (0.56) is related to the
physical facilities in the bank to be maintained with the type of service
provided.
Looking at the mean value of expectation, perception, and gap score
for the reliability service quality dimension respondents indicated that they
do expect the bank to perform their service at the first time (4.37), but the
data pinpointed that customers had the highest perception (4.23) for the trust
worthiness to solve their problems if occurred. Out of the total reliability
specific service quality dimensions, the lack of ‘doing things right the first
time’ caused the highest dissatisfaction (-1.26). The highest mean value of
customer expectation, perception, and gap score for the specific service
quality dimension of effective ATM & card procedures includes ATMs in
the bank are easy to use (4.23), the bank has easy procedure for obtaining
ATM cards (4.18), and Dashen bank to have an extensive or easily accessible
ATM networks (-1.12). On accessibility service quality dimension the
highest mean value of customer expectation, perception, and gap score is
indicated in the ATMs in the bank to be user-friendly (4.06), to have a
sufficient number of ATMs, and ATMs to be placed at a convenient
locations (-1.10).
Physical environment features were the final specific service quality
dimension and according to the data presented in the fourth chapter, the
highest mean value of customers’ expectation and perception were recorded
in the bank to have an attractive and well designed environment (3.47), and
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yet this factor had the highest mean perception value (4.01). The lowest gap
score (0.09) that creates the lowest level of satisfaction were related to the
availability of parking lots. When we look at all the service quality
dimensions, respondents indicated that the highest and the lowest mean value
of customer expectation is related to the bank performing their service at the
first time (4.37) which is a reliability service quality dimension and the bank
replaces their ATM cards if lost or stolen (2.79) which is effective ATM &
card procedures respectively. With respect to the highest and the lowest
mean value of customer perception , respondents indicated that “I trust
Dashen bank to solve problems if occurred” (4.23) had the highest
perception mean value which is reliability service quality dimension, and
customers’ perception mean value for all the ATMs in the bank were found
the lowest (2.87).
The bank performs my service at the first time” (-1.26), which is the
reliability service quality dimension and “the bank always keeps my privacy
of transaction at ATM” (-0.20), which is related to the effective ATM & card
procedures, were found to be the largest and the lowest gap score recorded
respectively.

Conclusions
The conclusion reached as a result of data analysis and interpretation is:

The higher mean value of expectation for each service quality dimensions
(attributes) are indicated as follows:
The bank’s materials associated with the service to be visually appealing;
The bank performs my service at the first time;
ATMs in the bank are easy to use.
The three lowest mean value of customer expectation:
The bank replaces my ATM cards if lost or stolen;
I can easily park my car, and

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 The bank has clear environment.
Looking at all the variables used in evaluating ATM service quality, the
following three variables do have the highest mean value of customer
perception:
-I trust DB to solve problems if occurred’ (Reliability),
-The Bank has easy procedure for obtaining ATM cards’ (Effective ATM &
card procedures),
-Dashen Bank’s equipment is modern’ (Tangibility).
The following three variables do have the lowest mean value of customer
perception:
-All ATMs in the bank are in working order’ (Effective ATM & card
procedure),
-DB placed its ATMs at a convenient locations’ (Accessibility), and
-DB has an extensive/easily accessible ATM networks’ (Effective ATM &
card procedures).
-The following are variables with the largest mean value of gap score (P-E):
-The bank performs my service at the first time’ (Reliability),
-DB has an extensive/easily accessible ATM networks’ (Effective ATM &
card procedures),
-DB placed its ATMs at a convenient locations’ (Accessibility),
The following variables do have the smallest mean value of gap scores (P-E):
-The bank always keeps my privacy of transaction at ATM (Effective ATM
& card procedures),
-ATMs in the bank are easy to use (Effective ATM and card procedures),
-Service is delivered at the right time (Reliability).

Recommendations
The analysis from the mean value of customers’ expectation,
perception, and gap scores displays a perceptual problem, when the sample
indicates poor performance of electronic banking facilities compared with an
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ideal banking service. The major findings and conclusions made up on these
major findings of the research Dashen Bank should concentrate on its efforts
in several areas and providing appealing ATM service:
DB should identify service quality expectations with the higher
value and accordingly design strategies, as the bank’s materials
associated with the service to be visually appealing, the bank
performs my service at the first time, ATMs in the bank are easy to
use;
DB should provide statements of all transactions that have been
conducted electronically, since such visible documents create
confidence in the customers’ mind;
DB should find ways of making their electronic services more
accessible to promote the level of customers’ satisfaction;
DB should strive hard to deliver its services at the first time or
follow the fail-safe strategy, which is one of the major service
quality dimensions which hugely affect customers’ level of
satisfaction;
DB should focus on service quality dimensions with the lowest
mean value which includes All ATMs in the bank are in working
order’ (Effective ATM & card procedure), DB placed its ATMs at a
convenient locations’ (Accessibility), and DB has an
extensive/easily accessible ATM networks’ (Effective ATM & card
procedures).
DB should improve the security of ATMs by making them well lit
up at night;
DB should also provide customers with a toll free number, so that
they will be allowed to vent their discontent in the service;
DB should develop even the ATM facilities to cater the elders and
disabled.

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