A Study on the Problems and Perceptions of ATM Users

with special reference to Thrissur District

___________________________________________________________________________
*Sunilraj N V
**Shaju Mathew
Abstract
The Automated Teller Machine (ATM) is one type of innovation that can
mechanically accept deposits, issue withdrawals, transfer funds between accounts, collect
bills, and make small loans. ATM has made the customers life easier and created an improved
channel of communication between banker and customer. The ATMs enabled customers to do
banking without visiting the bank branch. But still customers face many problems as is clear
from the study. This study aims at investigating the satisfaction levels of ATM Cardholders and
their problems. This study is one type of exploratory research using convenience
sampling technique where samples have been selected on the basis of convenience. Based on
the suggestions from this study, appropriate actions can be taken by the banks for achieving
better customer satisfaction.

Keywords: ATM card, Machine breakdown, Unsuitable location, currency quality.

_____________________________________________________________________

Introduction
Technology is revolutionizing the financial services industry through
various unthinkable innovations. The volume of cross-border trading and
other financial activities is increasing geometrically facilitated by technology.
The influence of technology over product innovations in banks is enormous. In
innovation process banks have to decide which products they wish to sell,
whether they wish to build those products themselves, how they should deliver,
and why they wish to deliver them to customers .Innovation is the art of
overcoming constraints toward development. It occurs when a new or changed
product or service is introduced to the market, or when a new or changed
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process is used in a commercial situation. No organization can remain happy

with the existing products to cope with the competitors. Banks are no exception
to this situation. The Automated Teller Machine (ATM) is such type of
innovation that can mechanically accept deposits, issue withdrawals, transfer
funds between accounts, collect bills, and make small loans.

Banking is considered as a service industry. In the process of conducting its

own activities to achieve its own goals, i.e. making profit, commercial
banks provides various ancillary facilities. Automated Teller Machine (ATM)
is such an ancillary facility. ATM is a part of the electronic financial transactions
system. As day-by-day the use of ATM is increasing, it is important to make a
study to gain insight about the level of customer satisfaction with respect to
various aspects of ATM and to identify the problem areas and proposed
recommendation leading to improvement. This study is such an
attempt.
ATM
An automated teller machine [ATM], is a computerized telecommunications
device that provides the clients of a financial institution with access to
financial transactions in space without the need for a cashier, human clerk or
bank teller. ATMs are known by various names including automatic banking
machine, cash machine etc. On most modern ATMs, the customer is identified
by inserting a plastic ATM card that contains magnetic stripe or a plastic smart
card with a chip that contains a unique card number. Authentication is
provided by the customer entering a personal identification number Using an
ATM, customers can access their bank accounts in order to make cash
withdrawals, credit card cash advances, and check their account balances as
well as to purchase goods and services. The customer who wants to avail ATM

facility is given a plastic card known as ATM card bearing the customer's
name and a PIN [Personal identification Number].
ATM in India
India is witnessing a rapid growth in ATM usage. The number of ATMs and
volume of business through ATMs has been increased considerably.
Table 1
Table showing the number of ATMs in India as on 30-11-2011
Sl
Total No. of
Name of bank
No
branches
1 Scheduled commercial banks
74130

Total No. of
ATMs
74505

Percentage to
branches
100.5

Public sector banks

62211

49487

79.5

Nationalised banks

44298

24836

56.7

SBI and its associates

17913

24651

137.6

Significance of the study

As the use of ATM services is increasing day-by-day, it is important to have an
idea about what the ATM users are thinking about various features of ATM, what
are their problem areas, what are their recommendations, how do they compare
the ATM service of their bank with that of any other banks etc.

Banks

marketing department also needs to have idea about the results of such types of
study to determine appropriate marketing strategy. Thus the findings of the study
will be very useful to them and it will also help the ATM section to identify
their positive and negative features and the customer recommendation. The
bank management can take actions on the basis of customer recommendations to
improve the services and further growth assuming that the customers selected on
the basis of convenience represent the whole population.
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One of the most important reasons for the fast increase in the number of users
of ATM is that, it is safe, cheap and convenient. By bringing in more and more
users especially from less educated and agricultural background, their standard
of living and livelihood situations can be improved. This is very much
important in the Indian context where a major segment

of population still

lives in unacceptable economic situations and through the mechanism the

objective of financial inclusion can be achieved.
Objectives of the study
(a) To analyse the problems faced by ATM users.
(b) To examine the level of customer satisfaction associated with the use of
ATM facility.
(c) To evaluate the usage patterns of customers

Scope of the study

The study was conducted to understand the usage patterns and problems faced
by the ATM users. Several variables related to the topic were examined. The
study was conducted among the ATM users in the Thrissur district.
Methodology of the study
The following section discusses the methodology adopted for the study,
different areas included in the population of the study, the sample, the sample
area, data collection, analysis and the period of the study.
Population of the study
The population of the study is the ATM users of Thrissur district.

Sample
There are large numbers of ATM users residing in Thrissur district. Not only
that the population is too large but also it is scattered all over the area. In such
a situation, the researchers decided to go for a sample study making sure that
the quality and accuracy of the data are not affected. The data is collected from
100 ATM users from the district.
Data collection
An interview schedule was prepared to collect information/primary data.
Personal interviews were conducted to collect supplementary information.
Most of the questions used rating scales to record the responses.
Secondary data were also collected from various sources from the available
Books, Journals and study reports for supplementing the theoretical framework
of the study.
Analysis
The data collected from various sources were analyzed by applying appropriate
mathematical and statistical techniques. Percentage analysis was also
extensively used.
Period of study
The study was conducted in January 2012.
Limitations
(a) In this study because of acute time shortage and organizational
restriction, no probability sampling technique (convenience sampling)
has been used. So it is inappropriate to project
the results of the survey beyond the specific sample.

(b) As the sample size is very small, geographical and regional differences could
not be made.
(c) Time is another major constraint for this study.
Analysis and Interpretation
Table 2
Age wise classifications of respondents
Age

Frequency

Percentage

15-30

36

36

30-45

39

39

45-60

17

17

Above 60

08

08

Total

100

100

Inference
75% of the users are below 45 years of age. Senior citizens constitute only
8% of the users. This shows that most of the users are young people.
Table 3
Respondent`s classification on the basis of occupation
Users category

Frequency

Percentage

Student

23

23

Govt. Employee

26

26

Pvt. Employee

20

20

Business

12

12

Professional

13

13

Others

Total

100

100

Inference
Government employees constitute the largest category with 26%. It is
followed by students with 23%.Business and professionals constitute 25% of
the total users. It can be reasonably assumed that educational and occupational
level have a significant influence on the usage of ATM cards.

Table 4

Respondent`s classification on the basis of awareness level of ATM services

Services

Frequency

Percentages

Cash withdrawal

100

100

Cash deposit

72

72

Balance enquiry

100

100

Fund transfer

26

26

18

18

Cheque

book

request

Inference
Most of the respondents are well aware about the cash withdrawal; balance
enquiry and cash deposit facilities of ATMs. Only 26% are aware about fund
transfer facility and 18% is aware about cheque book request facilities of ATMs.

Table 5
Respondent`s classification on the basis of frequency of use
Often

Frequency

Percentage

Daily

1-3 times in week

15

15

Weekly

35

35

1-3 times in a month

30

30

Once in a month

15

15

Total

100

100

Inference
The major segment of the consumers access the ATM on a weekly basis, ie,
35%.30% of the customers use it 1-3 times in a month. The customers who use
the ATM 1-3 times in week and 1-3 times in a month accounts for 15% each.
The daily user of ATM users comes to only 5%.
Table 6
Satisfaction level of customers
Variable

Satisfied

No opinion

Dissatisfied

Location

76

76

10

10

14

14

Security

45

45

03

03

52

52

Lighting

81

81

12

12

07

07

58

58

04

04

42

42

55

55

11

11

34

34

Easiness

of

operation
Denomination
of currency

Inference
Table 6 shows that majority of the respondents are satisfied with the
location, lighting and easiness of operation of ATM services.76% of the
respondents are satisfied with the location of ATM.52% of the respondents are
dissatisfied with the security level of ATMs. 58% of the respondents are of the
opinion that ATMs are easy to operate while 42% are dissatisfied.
Table 7
Problems faced by customers while accessing the ATMs

Problems

Frequency

Percentage

Machine breakdown

51

51

Unsecured

54

54

Machine complexity

42

42

Card locking

14

14

Poor money quality

40

40

Inference
Majority of the respondents are encountering many problems while accessing
ATMs.51% of the users responded that they are encountering with machine
break down problems.54% responded that they are concerned about security
problems.42% of the respondents are facing with the machine`s complexity
problems.14% have the card locking problems and 40% responded about the
poor quality of money.
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Findings and Suggestions

The study finds that the most important category of ATM users in India is the
young people and it can be reasonably presumed that the level of education
and occupation is having a significant influence in the usage of ATMs.
Majority of the respondents are aware only about the normal ATM services
like cash withdrawal and balance enquiry. Awareness about facilities like
cheque book request and fund transfer is very low. A major segment of the
respondents access ATMs weekly or 1-3 times in a month. Satisfaction level
of customers is more in the case of attributes like location and lighting.
Majority of the customers are confronting with the problems of machine
breakdown, insecurity. Poor money quality, uneasiness of access etc.
Mandatory security standard must be imposed by the government as well as
the banks for ensuring more safety. Better landscapes and lighting must be
ensured in and around the ATMs for their good visibility. ATMs have to be
installed in those locations which have a lot of natural surveillance .More user
friendly machines and public awareness must be made available for the
effective use of ATM facilities.

Conclusion
The study shows that the ATM has many positive features and the
customers are not well aware of all these. ATMs made the customers life
easier and had improved the standard of living. . It has made money
available 24hours. It is one of the first steps to E- banking. But still the
customers face many problems as discussed and explained above. Based on
the suggestions from this study, appropriate actions should be taken by the
service providers of ATMs for achieving better customer satisfaction.

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References
1. "ATM IndustryAssociation Global ATM Clock". Atmia.com.
http://www.atmia.com/mig/globalatrnclock/. http://www.interac.org/en_n3_31_abmstats.htm
2. http://www.interac.org/en_n3_31_abmstats.html
3. http://www.bis.org/publ/cpss74.htm.
4. "Central bank payment system information". Bis.org. 2001-02-05.
http://www.bis.org/cpss/paysysinfo.htm. Retrieved 2011-02-11.
5. http://www.eiu.com
6. www.bis.org
7. http://antarcticsun.usap.gov
8. www.rbi.org

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