IMPACT OF ATM SERVICE QUALITY ON CUSTOMER

SATISFACTION IN NEPALESE COMMERCIAL BANKS

Submitted By:

Pooja Mandal

Symbol No: 26015/19

T.U. Regd. No: 7-2-388-36-2019

A Summer Project Report Submitted to:

Faculty of Management, Tribhuvan University

In the partial fulfillment of the requirement for the degree of

Bachelor of Business Administration (BBA)

At the
KCMIT College
Faculty of Management
Tribhuvan University

Baneshwor Kathmandu
April 2024
 STUDENT DECLARATION

This is to certify that I have completed the Project entitled” Impact of ATM Service
Quality on Customer Satisfaction in Nepalese Commercial Banks” under the guidance of
Mr. Mohan Khanal in partial fulfillment of the requirement for the degree of Bachelor in
Business Administration at faculty of Management, Tribhuvan University. This is my
original work and I have not submitted it earlier elsewhere.

……………………

Pooja Mandal

KCMIT College

ii
 CERTIFICATE FROM SUPERVISOR

This is to certify that the summer project entitled “Impact of ATM service Quality on
Customer satisfaction in Nepalese Commercial Banks” is an academic work done by Ms.
Pooja Mandal submitted in the partial fulfillment of the requirement for the degree of
Bachelor in Business Administration at faculty of Management, Tribhuvan University
under my guidance and supervision. To the best of my knowledge, the information
presented by her in the summer project report has not been submitted earlier.

………………….
Signature of the supervisor
Name: Mr. Mohan Khanal
Date:

iii
 ACKNOWLEDGEMENT

The study entitled impact of ATM Service Quality on Customer Satisfaction in Nepalese
Commercial Banks has been conducted to satisfy for the partial requirement for the degree
of Bachelor in Business Administration , Tribhuvan University.

First and foremost, I offer my sincere gratitude to my supervisor, Mr. Mohan Khanal sir
for his valuable supervision and guidance in completing this study. I am ineffably indebted
this research project to achieve its present form.

Furthermore, I would also like to thank KCMIT College of providing the resources for
research work and providing library and computing support without which knowledge and
assistance of the study would have not been successful.

At last, I would also like to thank my parents, family, relatives, friends and all those who
helped me during the research work. However, I accept the sole responsibility for any
errors that might have occurred in this report.

Sincerely,

Pooja Mandal

iv
 TABLE OF CONTENTS

TITLE PAGE...................................................................................................................i
STUDENT DECLARATION...........................................................................................ii
CERTIFICATE FROM SUPERVISOR.........................................................................iii
CERTIFICATE FROM SUPERVISOR..........................................................................iv
ACKNOWLEDGEMENT................................................................................................v
TABLE OF CONTENTS................................................................................................vi
LIST OF TABLES........................................................................................................viii
LIST OF FIGURES.......................................................................................................ix
ABBREVIATIONS..........................................................................................................x
EXECUTIVE SUMMARY..............................................................................................xi
CHAPTER I : INTRODUCTION..............................................................................1
1.1 Introduction of the Study......................................................................................1
1.2 Statement of the Problem.....................................................................................2
1.3 Objectives of the study.........................................................................................3
1.4 Significance of the Study.....................................................................................3
1.5 Limitation of the Study.........................................................................................4
1.6 Literature Review.................................................................................................4
1.7 Conceptual Framework.........................................................................................6
1.8 Research Methodology.........................................................................................8
1.8.1 Research Design.............................................................................................8
1.8.2 Population and Sample..................................................................................9
1.8.3 Nature and Sources of data............................................................................9
1.8.4 Data Analysis and Tools................................................................................9
CHAPTER II : DATA PRESENTATION AND ANALYSIS................................10
2.1 Respondent Profile.............................................................................................10
2.2 Status of ATM users..........................................................................................14
2.3 Customer Feedback of ATM users in Nepalese Commercial Banks.................17
2.4 Correlation Analysis...........................................................................................22
2.5 Regression Analysis...........................................................................................23
2.6 Findings and Discussion.....................................................................................24

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 2.6.1 Findings.......................................................................................................24
2.6.2 Discussion....................................................................................................25
CHAPTER III : CONCLUSION AND ACTION IMPLICATIONS....................27
3.1 Conclusion..........................................................................................................27
3.2 Action Implications............................................................................................28
REFERENCES...........................................................................................................29
APPENDIX.................................................................................................................30

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 LIST OF TABLES

Table 2.1 Gender of the respondents............................................................................10

Table 2.2: Age of the respondents................................................................................11

Table 2.3: Academic Qualification of the respondents...............................................12

Table 2.4 : Occupation of the respondents...................................................................13

Table 2.9: Respondents frequently using ATM...........................................................16

Table 2.10 : Customer feedback towards service quality.............................................17

Table 2.12: Customer feedback towards Security features.........................................18

Table 2.13: Customer feedback towards Accessibility...............................................19

Table 2.14 : Customer feedback towards Complaints..................................................20

Table 2.15 : Customer feedback...................................................................................21

Table 2.18: Person correlation....................................................................................22

Table 2.16: Model Summary........................................................................................23

Table 2.17 : Coefficient................................................................................................23

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 LIST OF FIGURES

Figure 1.1: Conceptual Framework of the Study...........................................................6

Figure 2.1: Respondent’s gender..................................................................................11

Figure 2.2: Respondent’s age.......................................................................................12

Figure 2.3: Respondents Academic Qualification........................................................13

Figure 2.4: Respondents Occupation...........................................................................14

Figure 2.7: Respondents currently using ATM service................................................15

Figure 2.8: Respondents operating ATM comfortably................................................16

Figure 2.9: Respondents frequently using ATM..........................................................17

viii
 ABBREVIATIONS

ATM: Automated Teller Machine

A: Agree

BBA: Bachelor in Business Administration

CS: Customer Support

D: Disagree

CS: Customer Satisfaction

N: Neutral

SA: Strongly Agree

SF: Security Features

SD: Strongly Disagree

SPSS: Statistical Package for Social Science

TU: Tribhuvan University

ix
 EXECUTIVE SUMMARY

This report has been prepared as a partial requirement for the fulfillment of the
Degree of Bachelor’s in Business Administration (BBA). The main purpose of this
study is to determine the customers satisfaction towards ATM service in
Kathmandu.This includes study undertaken to know about what factors influence
the satisfaction of customers. The research has followed the descriptive research
design. 141 respondents were taken as for the study. The major source of data was
primary which was collected through questionnaire. Various statistical tools are
used to categorize, edit, code, tabulate, process, and analyze responses generated.
Data obtained were analyzed with the help of MS Excel.

x
 CHAPTER I

INTRODUCTION

1.1 Introduction of the Study

In innovative process, banks have to decide which products banks constraints wish to
sell, whether banks wish to build those products themselves, how bank should deliver,
and why banks wish to deliver those products to customers. Innovation is the skill of
in capaciting toward improvement of financial and other services. It emerges when a
new or changed product or services is announced to the market, or when a new or
changed process is used in commercial condition. Mc Andrews (2003) explains
ATMs can offer significant advantages to both bank and customers. The machines can
enable depositors to withdraw and deposit cash at more convenient times and places
than during banking hours at branches. At the same time, by automating services that
were previously completed manually, ATMs can reduce the costs of servicing some
customer demands. These potential advantage are multiplied when banks share their
ATMs with others, allowing depositors of banks to access their accounts through any
banks ATM. The decision by banks to share their ATMs is partially determined by the
terms under which different banks agree on. There are several prices that can be
charged or collected by the three main parties involved in an ATM transaction, the
cardholder or the customer, the cardholders bank, and the ATM banking transactions
made through ATM owner. Saeed et al.(2015) observed stiff competition in the
banking industry due to which the significance of customer satisfaction has grown
tremendously. The study identified five quality dimensions that play a vital role to fill
the gap between customer expectations and customer satisfaction. The variables
considered in previous researches are quality, assurance, reliability etc. In relation to
customer satisfaction whereas this research mainly considered the variables like
reasonability of fee charged, choices of ATM, post purchase behaviour, usuage of
ATM. The objectives of the research is to analyze the factor affecting customer
satisfaction from ATM services in Nepalese banking sectors. The growing awareness
among the people and the appraising development of technology has raised the needs
and expectation of the people from the bank. Customer has become the most valuable
assets for the bank and banks major objective is the satisfy them. Khan (2010) in his

1
study of Pakistani bank has stated that there is a positive and strong relationship
between ATM service quality and customer satisfaction. Bank has developed various
techniques to meet the expectation of the customers and such techniques are delivered
in the form of various product services. Other than lending, borrowing is termed as
ancillary products /services, which come under the retail banking system. Sawalqa
(2012) shows that privacy, security, cost and lack of training for users affect their
usage of ATM. The number of ATM users is increasingly growing in the modern
banking business. However, Mohammad (2010) indicates that convenience, efficient
operation, security, privacy, reliability, and responsiveness are significant dimension
of ATM service quality and that ATM service quality positively contributes towards
customer satisfaction of bank products and services. The operation and use of ATM
services in the financial sector, has contributed a lot in changing the way in which
financial services and products are being delivered to the banks clients. Thus, the
development of ATM saw the emergency of some challenges for the industry as
customers keep demanding for better service, while the financial institutions are very
busy searching for the most efficient way by which they can improve on their service
provision. Technology-intensive delivery channels, like Automated Teller Machines
(ATMs), internet banking, e-banking and mobile banking etc. have created a win-win
situation by extending greater convenience and multiple options for customers while
providing tremendous cost advantages to the banks ( Shainesh & Chaudhary, 2004).
The technological innovations have to be implemented in banks for its sustainability
and profitability. The banks should focus on customer satisfaction meeting their
expectations about the offered products and services through change and
development.

1.2 Statement of the Problem

In the present banking environment, Nepalese banks are trying to provide more and
more facilities to their customers. Technological service quality is improving to attract
and retain the customers. ATM is highly using technology in banking sectors. The
purpose of the study is to describe the level of customer satisfaction to their ATM
service in Nepalese banking sectors. Customers are satisfied or not by the ATM
services? This phenomenon is researchable in Nepal. Some of the research questions
are:

2
 i. How does the level of ATM service quality affect customer satisfaction in
commercial banks?
ii. What is the relationship between service quality and customer satisfaction?
iii. What factor of service quality does most impact of on customer satisfaction in
commercial banks?

1.3 Objectives of the study

This study has been initiated with the main objective of determining relationship
between ATM service quality and customer satisfaction. The specific objectives of
this study are as follows:
i. To assess the perception of customer regarding ATM services quality in
commercial banks in Kathmandu.
ii. To analyze the relationship between ATM service quality and customer
satisfaction of commercial banks in Kathmandu.
iii. To investigate impact of ATM quality service on customer satisfaction of
commercial banks in Kathmandu.

1.4 Significance of the Study

The emergence of new banking technology has created competitive market and
competitive market conditions, which have a critical impact upon consumer behavior.
In modern competitive environments, services are gaining increasingly importance in
the competitive formula of firms as well as countries. This study also helps to know
about the current situation of ATM service quality and customer satisfaction. This
study is expected to help the banking sector to assess the impact of ATM on customer
satisfaction and to know how they can improve their service through the use of ATM.
ATM is well-known machine to provide electronic access to customers. With advent
of Automatic Teller Machine (ATM), banks are able to serve customers outside the
banking hall. ATM is designed to perform the most important function of bank.
ATMs allow doing a number of banking transactions such as cash withdrawal from
one’s account, making balance inquiries and transferring money from one account to
another using a plastic, magnetic-stripe card and personal identification number
issued by the financial institution (Mobarek, 2007).The intense competition that
prevails in Nepalese banking industry is the fact of today. The inability to increase the

3
customer‘s base due to various reasons is not hidden to many who have been in
banking business since then. Further, this study focus on analyzing the various factors
such as identifying the factors affecting on customer satisfaction from ATM services,
understanding the factors that drives higher level of customer satisfaction and
analyzing the relationship between of customer satisfaction with fee charged, problem
faced, choice of ATM, usage of services and post purchase behavior. Hence, this
study will help banking sector on how they can improve service delivery through the
use of ATM.

1.5 Limitation of the Study

The proposed study has the following limitations;

i. The research includes few commercial banks of Nepal so large sample have
not taken .
ii. The customers who were surveyed might not truly represent the service
satisfaction level.
iii. This report is prepared in strict time bound. So, report does not cover all
theaspects of ATM customer satisfaction.
iv. There is no any exactness in the response of customers. So, it’s difficult to
traceout the accurate perception of customers.
v. Insufficient research articles and literature review to this subject matter in
Nepalese context is also one of the limitation for this research.

1.6 Literature Review

Banking industry is service oriented industry. This literature review aims to provide a
comprehensive overview of the impact of ATM service quality on customer
satisfaction in commercial banks. The research on this topic has increased in recent
years due to the increasing popularity of ATMs in the banking industry. It is
important for banks to understand the impact of ATM service quality on customer
satisfaction as it has a direct effect on the customer experience, loyalty and
profitability. The study has identified that convenience, efficient operation, security
and privacy, reliability and responsiveness positively and significantly affect
customers’ perception of ATM service quality. ATM services by the use of finger
prints of the account holder other than the use of ATM cards. This technology

4
provides extra security to the customer as without the customer biometric data,
transactions on his/her accounts via the ATM would not be possible. The study has
identified that convenience, efficient operation, security and privacy, reliability and
responsiveness positively and significantly affect customers’ perception of ATM
service quality. ATM service quality also relates to the ability of the bank staff to
provide the agreed services timely, accurately, dependably and promptly.

Dhungel and Acharyal (2011) understood a study on perception of bank customer

towards automated teller machine service quality. This study was conducted in
Chitwan.. This study was conducted by know the level of awareness of AT M services
and identify the problems and prospects regarding the use of ATM. The study reveals
that majority of the customer in Chitwan preffered ATM service but older and
uneducated generation was insecure to use it and they preffered to go for branch bank.

Similarly, Thapa (2016) explain the study examines the impact and importance of
customers satisfaction from ATM services. Service quality, security features,
accessibility, and complaints are selected as ATM services dimensions which are
independent variables. The study also indicates that there is positive relationship
between security and customer satisfaction which implies that higher the security,
higher would be the customers satisfaction. Also, ATMs allow doing a number of
banking transactions such as cash withdrawal from one’s account, making balance
inquiries and transferring money from one account to another using a plastic,
magnetic-stripe card and personal identification number issued by the financial
institution (Mobarek, 2007). Banks are increasing relying on SSTs (Self Service
Technologies) for providing services. ATM banking is one of the means to provide
self-service banking. The changing business environment offers challenges and
opportunities to the organizations.

5
1.7 Conceptual Framework

By reviewing the studies , it has been proposed a research frame work as follows to
study the " impact of ATM service Quality on customer satisfaction.

Independent Variables Dependent variables

Service quality

Security features
Customer
feedback

Accessibility

Complaints

Source: Dhungel and Acharya (2011), Thapa(2016)

Figure 1.1: Conceptual Framework of the Study

This figure shows the conceptual framework of the study. Service, Security,
Accessibility, Complaints are taken as independent variable whereas, customer
feedback is dependent variable.

1. Service quality: The quality of ATM services can have a significant impact on the
overall service quality of a commercial bank, as ATMs are one of the primary
touchpoints between customers and the banks. Some potential impacts of ATM
service quality on the overall service quality of a commercial bank include customer
satisfaction,convenience,trust and reliability and cost savings. The quality of ATM
services is an important component of the overall service quality of a commercial
bank, and banks should strive to provide high-quality ATM services to their
customers.

6
2. Security features: ATMs (Automated Teller Machines) are an important channel
for delivering banking services to customers. In summary, ensuring the security of
ATM transactions is critical for maintaining customer trust in commercial banks.
Banks can implement physical, network, transaction, and software security measures
to protect their ATMs and prevent fraud and other types of attacks.

3. Accessibility: Accessibility is an important aspect of ATM service quality in

commercial banks. It refers to the ability of customers to easily access and use ATMs
to conduct their banking transactions. In summary, accessibility is a key factor in the
quality of ATM services in commercial banks. By ensuring that their ATMs are
available, user-friendly, multilingual, efficient, and supported by technical staff,
commercial banks can provide a high-quality ATM experience for their customers.

4. Complaints: To address the complaints, commercial banks can take a number of

steps to improve their ATM service quality. For example, they can invest in regular
maintenance and upgrades of their ATMs to reduce breakdowns and improve
functionality. They can also ensure that ATMs are regularly stocked with cash and
that security measures are in place to protect customers' transactions. Additionally,
banks can provide clear signage and make ATMs easily accessible to customers, both
in terms of location and functionality. By addressing these issues, banks can improve
customer satisfaction and loyalty, and ultimately strengthen their business.

5. Customer feedback: Customer feedback is an important indicator of the impact of

ATM service quality in commercial banks. Positive feedback from customers
typically indicates that the ATM service is meeting or exceeding their expectations,
while negative feedback may indicate that improvements are needed.Overall,
customer feedback can provide valuable insights into the impact of ATM service
quality in commercial banks. Banks can use this feedback to identify areas for
improvement and to enhance the overall customer experience.

7
1.8 Research Methodology

This research was conducted generally to measure the level of customer satisfaction
and to understand the factors that cause the satisfaction. This research is a descriptive
research. Descriptive research design generally provides the information about the
phenomenon and presents the view of the participants towards the related topic. Here,
the level of satisfaction in various independent factors is measured to measure the
overall customer satisfaction in ATM service provided by the Himalayan Bank
Limited. This research measure the level of relation between the variable. This
research deals with the various factors affecting the customer satisfaction level so this
research will also provide the essential information on the factors and perception of
the customer towards thosefactors. This knowledge about the factors and customers
will help to enhance the operation of the organization. This study has employed
descriptive research designs to deal with the fundamental issues associated with
factors affecting customer satisfaction from ATM services factors in Nepalese
commercial banks. The descriptive research design has been adopted for fact finding
and searching adequate information about factor affecting customer satisfaction from
ATM services. Descriptive research is a process of accumulating facts. It describes
phenomenon as they exists. A descriptive and correlational research design has also
been adopted in this study which seeks to find relationships between independent and
dependent variables after an action or event has already occurred and allow the
prediction of future events from present knowledge. The researcher's goal is to
determine whether the independent variable affected the outcome, or dependent
variable, by comparing two or more groups of individuals. This design has been
adopted to ascertain and understand the directions, magnitudes and forms of observed
relationship between customer satisfaction and ATM services variables. The
questionnaire has been designed to assess the perception of bank customers’
satisfaction level from their ATM services.

1.8.1 Research Design

Research design is the blue print of the overall research procedure. This study follows
the descriptive research design and casual comparative research design. The study
dependent variable is customer feedback, while service quality, security features,

8
accessibility, complaints are the independent variables. This study is conducted in the
context of ATM users in Nepalese Commercial Banks.

1.8.2 Population and Sample

The target population of the study were the users of ATM of all the Nepalese
commercial banks . A sample would be a subset of this population, selected in a
manner that represents the diversity and characteristics of the entire population of
ATM users. This sample could consist of a randomly selected group of customers
from various demographics such as age, gender, occupation and frequency of ATM
usage. A sample of 141 people were taken for the study and they are ATM users of
different commercial banks. The data for the sample is collected through development
of questionnaires and distributed towards customers. Convenience sampling method is
used to collect the data for the study.

1.8.3 Nature and Sources of data

In this research, primary data is used for the study and primary data is collected from
the respondents who belongs to the customers of ATM users of different commercial
banks. This study conducts a research by using structured questionnaires for the
purpose to collect the data from the respondents. The questionnaires contain the
Likert type scale, multiple choices and yes no questions. Five points Likert scale
ranging from (5) “Strongly Agree” to (1) “Strongly Disagree” was used in the study.

1.8.4 Data Analysis and Tools

Data which is used in the study is primary data. Respondent responses are collected
through structured questionnaires. The responses received from the respondents have
been arranged in order to facilitate the descriptive analysis and analytical analysis of
the study. The data were analyzed using various methods as percentage analysis,
mean, bar graph, pie chart, correlation and regression. The calculation of data were
made by using SPSS, Ms-word and Microsoft excel.

9
 CHAPTER II

DATA PRESENTATION AND ANALYSIS

Data presentation and analysis is the most crucial factor that has to be done properly
in the course of summer project (report writing). The main purpose of this chapter is
to present the data in a systematic manner and analyze them to meet the objectives of
the report. As the sample size of this project is taken as of 141 respondents. This
chapter presents and analyses the primary data collected through structured
questionnaire from online survey. And the required information has been collected
from the customers of ATM users of Nepalese commercial Banks. All the collected
data through questionnaires methods are presented with the needed table and diagram
with the help of SPSS, Ms-excel software and Ms-word in order to make the apparent
presentation of available data. Charts like bar chart and pie charts are used for the
presentation of data in attractive way. Multiple choice questions, YES or NO question
and Likert type of questions were distributed to the respondent to get the responses
from them. This chapter shows the respondents profile, data presentation and analysis
and findings and discussion which are discussed below.

2.1 Respondent Profile

As the characteristics of respondents play significant role in expressing and giving the
responses about the problem, a set of personal characteristics namely gender, age,
education, and occupation of the 105 respondents have been examined. This sections
presents the findings about the respondents profile in terms of gender, age, education,
and occupation.

Table 2.1 Gender of the respondents

Gender Frequency Percent

Male 69 48.9

Female 72 51.1

Total 141 100.0

Note: Field Survey, 2024

10
 Gender of respondents

Male
48.90% Female
51.10%

Figure 2.1: Respondent’s gender

The Table 2.1 and Figure 2.1 found that out of 141 respondents, 69 respondents are
male which represents 48.90% of total respondents and 72 respondents are female
which represents 51.1% of total respondents.

Table 2.2: Age of the respondents

Age Frequency Percent

Above 16 2 1.4

18 17 12.1

18-24 92 65.2

Above 24 30 21.3

Total 141 100.0

Note: Field Survey, 2024

11
 Age of respondents
70.00% 65.20%
60.00%

50.00%

40.00%

30.00%
21.30%
20.00%
12.10%
10.00%
1.40%
0.00%
Above 16 18 18-24 Above 24

Figure 2.2: Respondent’s age

Sampled respondents are from different age groups. The total respondents are divided
into 4 age groups as above 16 years, 18 years, 18-24 years and above 24. Among
them 2 respondents are of above 16 years which represents 1.4% of the total
respondents, 17 are of 18 years which represents 12.1% of the total respondents, 92
are of 18-24 years which represents 65.2% of the total respondents and 30 are of
above24 years which represents 21.3% of the total respondents. Therefore, the study
found that most of the respondents are of between 18-24 years and above16 years is
lowest than other three age group.

Table 2.3: Academic Qualification of the respondents

Education Frequency Percent

Below SEE 8 5.6
Intermediate 31 21.8
Bachelor 85 59.9
Masters and above 18 12.7
Total 141 100.0
Note: Field Survey, 2024

12
 Academic Qualification of respondents
70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
Below SEE Intermediate Bachelors Master's and above

Figure 2.3: Respondents Academic Qualification

The Table 2.3 and Figure 2.3 shows the different education level hold by the
respondents who are involved in the research survey questionnaires. The study
divided the respondents academic qualification group into four classes as Below SEE,
Intermediate, Bachelor and Masters and above. Out of total respondents 8 of the
respondents are of Below SEE which represents 5.6% of total respondents, 31 of them
are of Intermediate which represents as 21.8% of total respondents, 85 of them are of
Bachelor which represents as 59.9% and 18 of them are of Masters and above which
represents as 12.7% of total respondents. Therefore, from the study found that most of
the respondents are of academic qualification up to Bachelor and the lowest
respondents have academic qualification up to below SEE.

Table 2.4 : Occupation of the respondents

Occupation Frequency Percent

Employee 42 29.6
Self-employed 4 2.8
Student 94 66.2
Others 2 1.4

Total 141 100.0

Note: Field Survey, 2024

13
 Occupation of respondents
70.00% 66.20%

60.00%

50.00%

40.00%
29.60%
30.00%

20.00%

10.00%
2.80% 1.40%
0.00%
Employee Self-employed Student Others

Figure 2.4: Respondents Occupation

The respondents who are sampled for the study are of different occupations.
Occupations are categorized into four classes as Employee, Self-employed, Student,
and Others. Out of 141 respondents 42 respondents are from employee which
represents as 29.6% of total respondents, 4 respondents out of 141 are self-employed
which represents as 2.8% of total respondents, 94 of them are from student which
represents as 66.2% of total respondents, and 2 respondents are from others which
represents as 1.4% of total respondents. Therefore, from the study found that most of
the respondents are students lowest respondents represents as others.

2.2 Status of ATM users

In this respondents details about ATM habit and the services which are getting by
them are analyzed from the data’s which are collected from the questionnaires survey.

14
 Table 2.7 : Respondents currently using mobile banking services

Currently using ATM Frequency Percent

Services
Yes 140 99.3
No 1 0.7
Total 141 100.0

Note: Field Survey, 2024

Figure 2.7: Respondents currently using ATM service

Respondents currently using ATM service

0.7

YES
NO

99.3

Table 2.7 and Figure 2.7 shows that, out of 141 respondents, 140 respondents are
currently using ATM services which represents as 99.3% of total respondents and 1
respondents are not using mobile banking services which represents as 0.7% of total
respondents.

15
 Table 2.8 : Respondents operating on ATM comfortable

Currently operating ATM Frequency Percent

Services
comfortable
Yes 141 100
No 0 0
Total 141 100.0
Note: Field Survey, 2024

Figure 2.8: Respondents operating ATM comfortably

Respondents operating ATM comfortable

YES
NO

100

Table 2.8 and Figure 2.8 shows that, out of 141 respondents, all respondents are
currently operating ATM services comfortable which represents as 100% of total
respondents and 0 respondents are not operating ATM service comfortable which
represents as 0% of total respondents.

Table 2.9: Respondents frequently using ATM

Frequently using ATM Frequency Percent

Daily 6 4.2

Weekly 47 33.1
Monthly 72 50.7
Rarely 17 12

Total 141 100.0

Note: Field Survey, 2024

16
 Respondents frequently using ATM
60
50.7
50

40
33.1
30

20
12
10 4.2
0
Daily Weekly Monthly Rarely

Figure 2.9: Respondents frequently using ATM

Table 2.9 and Figure 2.9 shows that, out of 141 respondents, 6 respondents are daily
using ATM services which represents as 4.2% of total respondents, 47 respondents
are weekly using which represents as 33.1% , 72 respondents are monthly using ATM
services which represents as 50.7% and 17 respondents are rarely using ATM services
which represents as 12% of total respondents.

2.3 Customer Feedback of ATM users in Nepalese Commercial Banks

This study follows the arithmetic average or mean to calculate the result from
available information of the respondents. Similarly, this study use SPSS and MS-
excel software to calculate Likert type questions.

Table 2.10 : Customer feedback towards service quality

Service Quality S D N A S Mean

Quality of ATM provided by my bank is very 0 1 2 11 2 3.82

good.
Transaction through ATM are very fast and time 0 0 3 10 4 3.77
savings.
ATM service provide 24/7 service. 0 2 4 92 4 3.69

ATM service of my bank is located in 1 5 5 81 1 3.53

convenient location
Total 3.71
Note: Field Survey, 2024

17
From Table 2.11 shows that out of 141 respondents 0 of them are strongly disagree, 1
respondents are disagree, 26 of them are neutral, 112 respondents are agree, 2
respondents are strongly agree to the first statement and the mean value of this
statement is 3.82. To the second statement 0 respondents are strongly disagree, 0 are
disagree, 36 are neutral, 101 are agree, 4 are strongly agree and the mean value is
3.77. To the third statement 0 respondents are strongly disagree and 2 are disagree, 43
of them are on neutral, 92 of them are agree, 4 of them are strongly agree and the
mean value is 3.69. To the fourth statement 1 respondents are strongly disagree, 5 are
disagree, 54 are neutral, 81 are agree, 1 are strongly agree and the mean value is 3.53.
Therefore, the total mean of this factor is 3.71 and overall result of the service quality
shows that most of the respondents are satisfied with the services.

Table 2.12: Customer feedback towards Security features

Security Features S D N A S Mean

I feel confident in the security measures 0 3 8 5 1 3.38

implemented by my bank.

I feel confident in the encryption and protection 0 1 8 5 1 3.39

of my personal and financial information
during transaction.

I am very satisfied with the promptness and 1 2 6 7 6 3.56

effectiveness of the bank response to
security incident.

I trust the security of the ATM machines provided 0 3 4 8 3 3.65

by the bank.

Total 3.49

Note: Field Survey, 2024

From Table 2.12 shows that out of 141 respondents 0 of them are strongly disagree, 3
respondents are disagree, 82 of them are neutral, 55 respondents are agree, 1
respondent are strongly agree to the first statement and the mean value of this
statement is 3.38. To the second statement 0 respondents are strongly disagree, 1 are
disagree, 85 are neutral, 54 are agree, 1 are strongly agree and the mean value is 3.39.
To the third statement 1 respondents are strongly disagree and 2 are disagree, 60 of
them are on neutral, 72 of them are agree, 6 of them are strongly agree and the mean

18
value is 3.56. To the fourth statement 0 respondents are strongly disagree, 3 are disagree,
47 are neutral, 88 are agree, 3 are strongly agree and the mean value is 3.65. Therefore, the
total mean of this factor is 3.49 and overall result of the security features shows that most of
the respondents are satisfied with the services.

Table 2.13: Customer feedback towards Accessibility

Accessibility S D N A S Mean

The accessibility of ATM’s in bank meets my 0 1 5 7 3 3.58

expectations.

ATM’s service provide easy access to banking 0 1 5 8 5 3.65

services.

ATM’s are readily available when I need to 0 3 5 8 5 3.58

perform banking service.

Bank branch location are conveniently accessible. 0 5 5 8 2 3.57

Total 3.61

Note: Field Survey, 2024

From Table 2.13 shows that out of 141 respondents 0 of them are strongly disagree, 1
respondents are disagree, 59 of them are neutral, 79 respondents are agree, 3
respondents are strongly agree to the first statement and the mean value of this
statement is 3.58. To the second statement 0 respondents are strongly disagree, 1 are
disagree, 52 are neutral, 84 are agree, 5 are strongly agree and the mean value is 3.65.
To the third statement 0 respondents are strongly disagree and 2 are disagree, 54 of
them are on neutral, 80 of them are agree, 3 of them are strongly agree and the mean
value is 3.58. To the fourth statement 0 respondents are strongly disagree, 5 are
disagree, 52 are neutral, 82 are agree, 2 are strongly agree and the mean value is 3.57.
Therefore, the total mean of this factor is 3.61 and overall result of the security
features shows that most of the respondents are satisfied with the services.

19
 Table 2.14 : Customer feedback towards Complaints

Complaints S D N A S Mean

I am satisfied with the availability of ATM’s in 1 9 5 7 2 3.43

convenient locations.

I am satisfied with the security measures 1 1 8 5 1 3.39

implemented at ATM’s provided by bank.

I am satisfied with the responsiveness of customer 0 3 5 8 2 3.52

service of ATM related complaints
provided by bank.

I am satisfied with the realiability of ATM’s 0 3 6 6 3 3.41

provided by bank.

Total 3.44

Note: Field Survey, 2024

From Table 2.14 shows that out of 141 respondents 1 of them are strongly disagree, 9
respondents are disagree, 53 of them are neutral, 77 respondents are agree, 2
respondents are strongly agree to the first statement and the mean value of this
statement is 3.43. To the second statement 1 respondents are strongly disagree, 1 are
disagree, 81 are neutral, 58 are agree, 1 are strongly agree and the mean value is 3.39.
To the third statement 0 respondents are strongly disagree and 3 are disagree, 56 of
them are on neutral, 81 of them are agree, 2 of them are strongly agree and the mean
value is 3.52. To the fourth statement 0 respondents are strongly disagree, 3 are
disagree, 68 are neutral, 67 are agree, 3 are strongly agree and the mean value is 3.41.
Therefore, the total mean of this factor is 3.44 and overall result of the security
features shows that most of the respondents are satisfied with the services.

20
 Table 2.15 : Customer feedback

Customer Feedback S D N A S Mean

I am satisfied with the overall quality of customer 0 1 5 8 2 3.61

service provided by the bank.

My bank responds promptly and effectively to my 0 4 6 6 1 3.48

inquries and concern.

The ATM service provided by bank is user- 2 1 5 8 2 3.59

friendly and convenient.

I would recommend my bank to others based on 1 2 4 8 4 3.66

my level of satisfaction with its service.

Total 3.58

Note: Field Survey, 2024

From Table 2.15 shows that out of 141 respondents 0 of them are strongly disagree, 1
respondents are disagree, 55 of them are neutral, 83 respondents are agree, 2
respondents are strongly agree to the first statement and the mean value of this
statement is 3.61. To the second statement 0 respondents are strongly disagree, 4 are
disagree, 67 are neutral, 69 are agree, 1 are strongly agree and the mean value is 3.48.
To the third statement 2 respondents are strongly disagree and 1 are disagree, 52 of
them are on neutral, 84 of them are agree, 2 of them are strongly agree and the mean
value is 3.59. To the fourth statement 1 respondents are strongly disagree, 2 are
disagree, 45 are neutral, 89 are agree, 4 are strongly agree and the mean value is 3.66.
Therefore, the total mean of this factor is 3.58 and overall result of the security
features shows that most of the respondents are satisfied with the services.

21
2.4 Correlation Analysis

Table 2.18: Person correlation

Variables Service Security Accessibilit Complaint Customer

Quality Features y s Feedback

Service 1 0.152 0.201* 0.122 0.306**

Quality 0.071 0.016 0.147 0.000

Security 1 0.301** 0.389** 0.326**

Features 0.000 0.000 0.000

Accessibility 1 0.256** 0.448**

0.002 0.000

Complaints 1 0.197*
0.019

Customer 1
Feedback

*. Correlation is significant at the 0.05 level (2-tailed)

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

As, shown in the table, the correlation coefficient between customer feedback and
service quality is observed to be positive (r =0.306, p>0.001) and significant
relationship between customer feedback and service quality. Similarly, the
relationship between customers feedback and security features is found to be positive
(r =0.326, p>0.001) and significant relationship between customer feedback and
security features. Likewise, the relationship between customer feedback and
accessibility is observed to be positive (r =0.448, p>0.001) and significant
relationship between customer feedback and accessibility. Also, it can be seen that
there is positive relationship between customer feedback and complaints (r =0.197,
p>0.001) and significant relationship between customer feedback and complaints. The
correlation analysis shows all the independent variables: service quality, security
features, accessibility and complaints have a positive and significant relationship with
customers feedback towards ATM service

22
2.5 Regression Analysis

Table 2.16: Model Summary

Model R R Square Adjusted R Square Std. Error F Sig.

1 0.531 0.282 0.261 0.34263 13.450 0.000

a. Predictors: (Constant), Complaints, Servicequality, Accessibility, Securityfeatures

Note: Field Survey, 2024

R square is the proportion of variation in the dependent variable is due to independent

variable. R square = 0.282, about 28.2% variation in customer feedback is due to
independent variables; service quality, security features, accessibility and complaints.
Similarly, from the above Table 2.16, illustrates that significance level is 0.000 which
is less than 0.05 (P < 0.05). It means there is a significant relation between dependent
variable (customer feedback) and the independent variable (service quality, security
features, accessibility and complaints).

Table 2.17 : Coefficient

Unstandardized Coefficients

Variables B Std. Error t Sig.

(Constant) 0.490 0.449 1.091 0.277

Service Quality 0.241 0.87 2.769 0.006
Security Features 0.184 0.080 2.306 0.023
Accessibility 0.417 0.094 4.452 0.000
Complaints 0.017 0.081 0.215 0.830

a. Dependent Variable : Customerfeedback

Note: Survey Field, 2024

As depicted in Table 2.17, Customer feedback is used as dependent variable and

service quality, security features, accessibility and complaints as independent
variables. After introducing all the variables under the study,(P < 0.05 or 5%), the
impact of service security on customer satisfaction is found to be positive and it is

23
significant. The coefficient with 0.241 of service quality shows that an increase in
service quality causes an increase in customer satisfaction. (P < 0.05 or 5%), the
impact of security features on customer feedback is found to be positive and it is
significant with the coefficient of 0.184. (P < 0.05 or 5%), the impact of accessibility
on customer feedback is found to be positive and it is significant with the coefficient
of 0.415. Similarly, (P < 0.05 or 5%), the impact of complaints on customer feedback
is found to be positive and it is insignificant with the coefficient of 0.017

2.6 Findings and Discussion

2.6.1 Findings

The association between customer feedback and ATM service has been the primary
subject of this study. In this study, customer feedback served as the dependent
variable and the independent variables were the components of ATM services
(Service quality, Security features, accessibility and Complaints). The major findings
of the study are as follows:

i. Among the 141 respondents, the majority of the respondents were female
(51.1%) and remaining (48.9%) were male respondents.

ii. Maximum age group respondents fall under the category of 18-24 years with
(85.2%) and minimum age group respondents fall under the category of above 16
with (1.4%).

iii. The maximum number of respondents has Academic qualification of bachelor

level with (59.9%) and the minimum numbers of the respondents has below SEE
level education with only (5.6%) of total respondents.

iv. As per occupation of the respondents, maximum respondents were student with
(66.2%) and minimum (1.4%) were others.

v. The majority of the respondents (99.3%) has ATM card and respondent (0.7%)
don’t have ATM card.

vi. The study found that (100%) of the respondents are comfortable operating ATM.

24
vii. The maximum number of respondents (50.7%) use ATM monthly and the
minimum number of respondents (4.2%) use ATM daily.

viii. From the study the mean value of service quality is 3.71, mean value of security
features is 3.49, mean value of accessibility is 3.61 and the mean value of
complaints is 3.44. As a result, customers are satisfied to all the services of ATM.
Also the aggregate mean score for the customer feedback is 3.58. This means,
customers have positive perception on ATM services of Nepalese Commercial
Banks.

ix. The study shows significant and positive relationship between independent
variables as: service quality, security features, accessibility, complaints and
dependent variables as: customer feedback as per correlation analysis.

x. As per the regression, model summary found that there is significant relationship
between independent variables and dependent variables. And the coefficient table
shows insignificant and positive relationship between complaints and customer
feedback. Likewise, there is significant and positive relationship between service
quality, accessibility, security features and customer feedback

2.6.2 Discussion

The major discussion of the study is that ATM service plays a vital role in
determination of customer feedback. The study reveals that the correlation coefficient
between all the independent variables (service quality, security features, accessibility
and complaints) and dependent variable of customer feedback is positively related. It
means an increase in independent variables will lead to an increase in customer
feedback.

On the other hand, findings of the regression analysis, coefficient have insignificant
and positive relationship between complaints and customer feedback. Similarly, there
is significant and positive relationship between service quality, security features
accessibility and customer feedback. And from the model summary there is
significant relationship between independent variables and dependent variables.

The present study has analyzed customers satisfaction of ATM quality. The article
concludes that decrease in complaints of the ATM can satisfy and develop customer

25
satisfaction that ultimately retains valued customers. Independent variables as:
Service quality, Security features, accessibility,complaints and dependent variables
as: customer feedback(Dhungel and Acharya (2011), Thapa(2016). Hence, the
findings of the study are supported by the researcher report.

26
 CHAPTER III

CONCLUSION AND ACTION IMPLICATIONS

3.1 Conclusion

This study examines customer feedback in ATM service. The tables above show that
when we look at different aspects of customer feedback, we find different effects on
ATM. Service Quality, Security Features, Accessibility and Complaints were found to
have positive impact on the important parts of customer Feedback. From table 2.17, it
implies that banks should focus on providing secure ATM service in order to improve
customer satisfaction. Banks should focus on improving their service quality in order
to increase customer feedback. This can be done by investing in a new technologies,
training employees and implementing best practices. And, banks should not neglect
complaints. However, they should focus on this areas less than service quality,
security features and accessibility.

From the data analysis and presentation as referred from table 2.16, the adjusted R-
squared value indicates that 28.2% of customer feedback in ATM can be attributed to
factors like service quality, security features, accessibility and complaints. The
remaining 71.8% of customer feedback is influenced by other factors that we
considered as constant in this study, but they still have an impact in overall
satisfaction.

ATM plays a crucial role in boosting bank’s profitability while also enhancing
customer relationships, increasing satisfaction and fostering loyalty. It’s a popular
choice among customers of all backgrounds. This service helps customers to save
time, costs and other expenses. Looking ahead, we can anticipate that mobile banking
will expand to both rural and urban areas, becoming an essential need for service
providers and users. ATM serves users an easy access to transactions.

27
3.2 Action Implications

The major recommendations to improve customer satisfaction towards ATM service

are explained below:

1. The bank should proactively monitor customers’ preferences with regards to the
ATM services provided by their banks and extend the services of ATM for
other various purposes beside cash withdraw and payments.

2. Bank should focus on important aspect of security and privacy as well as efficient
operation of ATMs. The bank should be aware of the fraudulent activities and
take safety measures instantly as the security and privacy issues are emerging
in the contemporary time period.

3. Similarly, the service quality of ATM services should be increased to make people
aware on the use of ATM services which can benefit both the customers in
getting the services and for the banks in rendering the services more promptly.

4. The bank should not focus only the satisfaction of ATM users but also aim at
delighting them ensures the retention.

5. Bank should develop strategies to motivate non-users through awareness, education

extending personalized services and demonstrating the functions of ATM.

6. Quick response to customers’ needs and queries about the ATM related services are
important the service standard of ATM.

7. Finally, the bank should be proactive towards the customer need and expectation
from the ATM service. The ATM service should be monitored in regular time
frame to insure the efficient operation and fewer breakdowns.

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 REFERENCES

Dhungel, A., B. Acharya, and K. Upadhyay-Dhungel.(2012) “Perception of Bank

Customers about Automated Teller Machine (ATM) Service
Quality”. Banking Journal,2(2), (23-38)

Kumbhar , Vijay. M(2011) Impact of customer satisfaction: An empirical

Investigation on ATM services.

Mwastika Charles(2016) Impact of ATM banking performance on customer

satisfaction with Bank in Malwai

File, K. M., & Prince, R. A. (1992). Positive Word‐of‐Mouth: Customer Satisfaction

and BuyerBehaviour. International Journal of Bank Marketing, 10(1), 25-
29.

Fornell, C., Johnson, M. D., Anderson, E. W., Cha, J., & Bryant, B. E. (1996). The
American customer satisfaction index: nature, purpose, and findings. Journal
of marketing, 60(4), 7-18.

Hu, H. H., Kandampully, J., & Juwaheer, T. D. (2009). Relationships and impacts of
service quality, perceived value, customer satisfaction, and image: an
empirical study. The service industries journal, 29(2), 111-125.

Banstola, A. (2007). Prospects and Challenges of E-banking in Nepal. Journal of

Nepalese Business Studies, 4(1), 96-104.

Baten, M. A., & Kamil, A. A. (2010). E-banking of economical prospects in

Bangladesh. Journal of internet Banking and Commerce, 15(2), 1-10.

Bhatta, K. P. (2011). Customer behavior and preferences: a survey report. Banking

Journal, 1(1), 63-74.

29
 APPENDIX

Survey Questionnaire

Dear Respondents,

I am Reshmi Chaudhary, a BBA student of Birendra Multiole Campus Affiliated to

Tribhuvan University (TU). In order to partially fulfill the requirement of the
Bachelor Degree, I am undertaking a research on the topic” Impact of ATM service
quality on customer satisfaction in Nepalese Commercial Banks”. So, I humbly
request you to fill the questionnaire in a way that actually reflect your concern and I
assure you that your response will be kept completely confidential. I would be
greatful if you could take a few minutes to respond to the questionnaire.

Section 1: Demographic Information

Q1: Name

Q2: Gender

Male( ) Female( )

Q3: Age

Avove 16( ) 18( ) 18-24( ) Above 24( )

Q4: Academic qualification

Below SEE ( ) Intermediate( ) Bachelor( ) Masters and above( )

Q5: Occupation

Employee( ) Self- employed( ) Student( ) Other( )

Section 2: General Question

Q1: Do you have ATM card?

YES( ) NO( )

Q2: Is operating on ATM comfortable?

YES( ) NO( )

Q3: How often do you use an ATM?

Daily( ) Weekly( ) Monthly( ) Rarely( )

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Section 3: Likert Type question

(1= Strongly Disagree, 2=Disagree, 3=Neutral, 4=Agree, 5=Strongly Agree)

Service Quality

Statements 1 2 3 4 5
1. Quality of ATM provided by my bank is
very good.
2. Transaction through ATM are very fast
and time savings.
3. ATM service provide 24/7 service.
4. ATM service of my bank is located in
convenient location.

Security Features

Statements 1 2 3 4 5
1. I feel confident in the security measures
implemented by my bank.
2. I feel confident in the encryption and
protection of my personal and financial
information during transaction.
3. I am very satisfied with the promptness
and effectiveness of the bank response to
security incident.
4. I trust the security of the ATM
machuines provided by the bank.

Accessibility

Statements 1 2 3 4 5
1. The accessibility of ATM’s in bank
meets my expectations.
2. ATM’s service provide easy access to
banking services.
3. ATM’s are readily available when I need
to perform banking service.
4. Bank branch location are conveniently
accessible.

Complaints

Statements 1 2 3 4 5
1. I am satisfied with the availability of
ATM’s in convenient locations.
2. I am satisfied with the security measures

31
 implemented at ATM’s provided by
bank.
3. I am satisfied with the responsiveness of
customer service of ATM related
complaints provided by bank.
4. I am satisfied with the realiability of
ATM’s provided by bank.

Customer Feedback

Statements 1 2 3 4 5
1. I am satisfied with the overall quality of
customer service provided by bank.
2. My bank responds promptly and
effectively to my inquiries and concern.
3. The ATM service provided by bank is
user-friendly and convenient.
4. I would recommend my bank to others
based on my level of satisfaction with its
services.

32