ADDIS ABABA MEDICAL AND BUSINESS COLLEGE

THE IMPACT OF ATM SERVICE QUALITY ON CUSTOMER

SATISFACTION: IN CASE OF WEGAGEN BANK DIRE DAWA BRANCH

A thesis Submitted to School of Graduate Studies of Addis Ababa Medical and

Business College in Partial Fulfillment of the requirement for Master of
Business Administration- General Management

BY: ALEXANDER ZEWDU

ID NO DBPR/3145/2012A

ADVISOR: ABEBAYEHU HAILE (ASST.PROF.)

JULY, 2021

DIREDAWA, ETHIOPIA

i
 DECLARATION

I, undersigned, declare that the work entitled “The impact of ATM Service Quality on Customer

Satisfaction in case of Wegagen Bank Dire Dawa Branch.” is the outcome of my own effort and

prepared under the guidance of instructor Abebayehu Haile (Asst. Prof.). I have produced it

independently except for the guidance and suggestion of my Research Advisor. This study has

not been submitted for any degree in this University or any other University. It is offered for the

partial fulfillment of Master of Business Administration-General Management.

Name Alexander Zewdu Advisor’ Name Abebayehu Haile (Asst. Prof.)

Date ____________________ Date ___________________

Signature __________________ Signature ________________

ii
 ADDIS ABABA MEDICAL AND BUSINESS COLLEGE

THE IMPACT OF ATM SERVICE QUALITY ON CUSTOMER

SATISFACTION: IN CASE OF WEGAGEN BANK DIRE DAWA BRANCH

BY: ALEXANDER ZEWDU

ID NO DBPR/3145/2012A

APPROVED BY BOARD OF EXAMINERS

__________________________ _______________________

ADVISOR SIGNATURE

__________________________ _______________________

INTERNAL EXAMINER SIGNATURE

_________________________ ________________________

EXTERNAL EXAMINER SIGNATURE

iii
 Table of Contents

DECLARATION.................................................................................................................ii
LIST OF TABLES..............................................................................................................vi
LIST OF FIGURES............................................................................................................vi
ACKNOWLEDEMENTS.................................................................................................vii
ACRONYMS...................................................................................................................viii
ABSTRACT.......................................................................................................................ix
CHAPTER ONE..................................................................................................................1
1. INTRODUCTION...........................................................................................................1

1.1 Background of the Study...........................................................................................1

1.2 Statement of the Problem..........................................................................................3
1.3 Research Questions...................................................................................................4
1.4 Objectives of the Study.............................................................................................4

1.4.1 General objective...............................................................................................4

1.4.2 Specific objectives.............................................................................................4

1.5 Hypothesis of the Study............................................................................................5

1.6 Significance of the Study..........................................................................................5
1.7 Scope of the Study.....................................................................................................5
1.8 Limitations of the Study............................................................................................6
1.9 Organization of the Study.........................................................................................6

CHAPTER TWO.................................................................................................................7
2. LITERATURE REVIEW................................................................................................7

2.1 Concepts and Definition of ATM..............................................................................7

2.2 Customer Satisfaction...............................................................................................8
2.3 ATM Service Quality Attributes...............................................................................9
2.4 Service Quality and Its Measurement.....................................................................10
2.5 Relationship between service Quality and Customer Satisfaction..........................12
2.6 Problems Associated with the use of ATM.............................................................13
2.7 Empirical Review..................................................................................................14
2.8 Conceptual Framework...........................................................................................15

CHAPTER THREE...........................................................................................................16
3. RESEARCH METHODOLOGY..................................................................................16

iv
 3.1 Research Approach.................................................................................................16
3.2 Research Design......................................................................................................16
3.3 Population of the Study...........................................................................................17
3.4 Sources of Data.......................................................................................................17
3.5 Sample Size and Sampling Techniques...................................................................17
3.6 Methods of Data Collection....................................................................................18
3.7 Methods of Data Analysis.......................................................................................18
3.8 Validity and Reliability...........................................................................................19
3.9 Ethical Consideration..............................................................................................19

CHAPTER FOUR.............................................................................................................20
4. DATA PRESENTATION, ANALYSIS AND INTERPRETATION...........................20

4.1 Demographic profile of the respondents.................................................................20

4.2 Descriptive Analysis of ATM Service Quality Dimensions...................................21

4.2.1 Tangibility Dimension Analysis......................................................................22

4.2.2 Reliability dimensions analysis........................................................................23
4.2.3 Responsiveness dimensions analysis...............................................................24
4.2.4 Assurance dimension analysis.........................................................................25
4.2.5 Empathy Dimensions Analysis........................................................................26

4.3 Customer Satisfaction Analysis..............................................................................27

4.4 Tests of Assumptions of Multiple Regression Model.............................................28

4.4.1 Normality Test.................................................................................................28

4.4.2 Linearity Test...................................................................................................30
4.4.3 Multi-collinearity Test.....................................................................................31

4.5 Correlation Analysis................................................................................................32

4.6 Multiple Regression Analysis.................................................................................33
4.7 Results of research Hypotheses...............................................................................35
4.8 Responses on major Problems encountered while Customers using ATM.............36

CHAPTER FIVE...............................................................................................................37
5. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS.................................37

5.1 Summary.................................................................................................................37
5.2 Conclusion...............................................................................................................38

v
 5.3 Recommendations...................................................................................................40
5.4 Recommendations for future research.....................................................................40

REFERENCES..................................................................................................................41
Appendix............................................................................................................................48

LIST OF TABLES

Table 1: Reliability Statistic..........................................................................................................19

Table 2: Demographic profile of the respondents.........................................................................21

Table 3: Descriptive Statistics of Tangibility Dimension..............................................................22

Table 4: Descriptive Statistics of Reliability Dimension..............................................................23

Table 5: Descriptive Statistics of Responsiveness Dimension......................................................24

Table 6: Descriptive Statistics of Assurance Dimension...............................................................25

Table 7: Descriptive Statistics of Empathy Dimension.................................................................26

Table 8: Descriptive Statistics of Customer Satisfaction..............................................................27

Table 9: Collinearity Statistics for the Service Quality Dimensions.............................................31

Table 10: Correlation results between the customer satisfaction and the service quality.............33

Table 11: Model Summary between Service Quality Dimensions and Customer Satisfaction....34

Table 12: ANOVA TABLE...........................................................................................................34

Table 13: Regression Coefficients Model Analysis......................................................................35

vi
Table 14: Hypotheses Results........................................................................................................36

Table 15: Responses on problems faced while Customers using ATM........................................37

LIST OF FIGURES

Figure 1: Conceptual Framework of the Study

Figure 2: Normal P-P Plot of Regression Standardized Residual

Figure 3: Histogram of Regression Standardized Residual

Figure 4: Residual vs. Predicted plot

ACKNOWLEDEMENTS

First of all, I want to thank GOD for enabling me to perform this study. I would like to express

my sincere appreciation and special thanks to my advisor Abebayehu Haile (Asst. Prof.) for his

constructive comment. A great thanks and special gratitude reach to my Mother who afforded

my education from childhood up to now. My thank goes to WB managers and staff for their

support to conduct my research. I want to express my colleagues for their support during my

research work.

vii
 ACRONYMS

ATM Automated Teller Machine

WB Wegagen Bank

ANOVA Analysis of Variance

SERVPERF Service Performance Model

SERVQUAL Service Quality Model

SQ Service Quality

SPSS Statistical Package for Social Science

viii
 ABSTRACT

The main purpose of this study was to assess the effect of ATM service quality on customer
satisfaction using SERVPERF model. Moreover, it attempts to analyze customer satisfaction on
ATM service quality, to investigate the level of customer satisfaction and to identify the major
problems that customer face while using ATM. Both primary and secondary data were used.
Primary data were gathered using 5-Point Likert-scale from 105 respondents who are customers
of WB applying Convenience sampling technique. The secondary data assessed through
published work books, magazines, journals and related articles. Data was analyzed using SPSS
version 25 using descriptive statistics-frequencies, percentages, mean scores and standard
deviation. Likewise, inferential statistics- Pearson’s linear correlation and regression analysis
were used to analyze data. Descriptive-statistics result showed overall customer satisfaction was
above average mean score to ATM customers. In addition inferential-statistic result of this study
revealed tangibility, reliability, responsiveness, assurance and empathy have significant and
positive effect on customer satisfaction. The researcher recommends WB to improve the quality
of ATM service in order to increase the level of customer satisfaction by all the ATM service
quality dimensions.

Keywords: ATM, Customer Satisfaction, Service quality, SERVPERF

ix
 CHAPTER ONE

1. INTRODUCTION

This chapter presents background information, statement of the problem, objectives, hypothesis,
research questions, significance, scope, limitations of the study with discussion in detail.

1.1 Background of the Study

In a competitive marketplace where businesses compete for customers, customer satisfaction is

seen as a key differentiator and increasingly has become a key element of business strategy.
Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the
state of satisfaction will vary from person to person and service to service (Kanojia, et al, 2012).
And therefore customer satisfaction has become a very important concept in recent years. The
importance of customer satisfaction cannot be ignored in both the products and services.

The business depends upon client services and the satisfaction of the customer and this is
compelling them to improve customer services and build up relationship with customers. Thus,
the banking everywhere is giving, more or less, the same kind of services or products. For
instance, there is usually only negligible variation in interest rates and bank prices are fixed and
driven by the market. Hence, managements tend to make their banks different from others by
offering better service. Quality service, therefore, becomes a competitive advantage for banks not
only to attract potential customers, but also to retain them by offering better services.
(Ahmossawi, 2001).

Dilijonas et al., (2009) identified essential resources (adequate number of ATMs, convenient and
secure location and user-friendly system); important dimensions of operation of ATM (maximum
speed, minimum errors, high uptime, cash backup); and value-based aspects (quality service at
reasonable cost, and maximum offering to cover maximum. needs of customers) as vital facets.
Islam et al., (2007) found in leading bank in Bangladesh that significant relationship of ATM
service quality with customers’ satisfaction. The study identified that location, personnel
response, quality of currency notes, promptness of card delivery and performance of ATM were
positively and significantly related to customer’ satisfaction, but security, frequent breakdown of

1
machine, and insufficient number of ATM were major contributors of customers’ dissatisfaction

2
Halstead et al (1994) states that customer satisfaction is a transaction specific effective response
from customers’ comparison of product performance to some pre-purchase standard. ATM
banking customers have expectations of their banks’ ATM banking services against which each
service encounter enhances comparison of ATM banking performance to the expectations.

The history of ATM can be traced back to the 1960s, when the first ATM machine was invented
by John Shepherd-Barron he was managing director of De La Rue Instruments. That machine
used by Barclays Bank (Barclays Bank in Enfield Town in North London, United Kingdom) in
27 June 1967 (Bernardo & Robert , 2008). Automated teller machine was first introduced in
Ethiopia in 2001, with the Commercial Bank of Ethiopia being the pioneers in this kind of
service to the banking sector Gardachew Worku (2010). This was done so as to enable customers
have a 24- hour access to their money and hence improve customer satisfaction.

Cronin and Taylor (1994) argued that customer satisfaction can be obtainable with low quality,
whenever one’s expectations in a given situation are low and performance is adequate to the task.
Emergency situation fit this scenario well. Similarly, dissatisfaction with high quality can ensue
when some element of the service delivery is not up to personal expectations. Therefore
performance only scale is suitable to assess service quality and customer satisfaction.
SERVPREF was developed by Cronin and Taylor in 1992. They developed this instrument to
simplify the measurement of service quality and customer satisfaction. It has the same
dimensions of the SERVQUAL model. The model is developed to study banking, pest control,
dry cleaning, and fast food sectors. It is a modification of the SERVQUAL model and based
upon the performance theory. The fact that SERVPREF does not consider customer expectations
it becomes only difference between SERVPREF and SERVQUAL. It brings into consideration
only customer perceptions of service performance. SERVPERF has only one part, which is the
perceived performance of service. In this instrument, customers are only required to rate their
perceptions of performance of the same attributes that are covered in the SERVQUAL model.
Therefore, this study analyzed ATM service attributes from SERVPERF dimensions and
identifies factors that have significant effect on customers’ satisfaction in using ATM banking in
WB Dire Dawa branch.

3
4
 1.2 Statement of the Problem

The use of ATM is a new way of accessing banking services necessitated by customers` business
needs and is enabled by fast changing technology like Internet. Due to achievements brought
about by increased utilization of Information and Communication Technology in society, the
banking industry has introduced ATM. ATMs provide a new method of dispensing customer
services which are expected to increase efficiency, sales performance, and enhance customer
satisfaction (Mboma, 2011)

Many studies have been conducted to assess customer satisfaction in ATM services using
SERVQUAL model in Ethiopia. For example, Lemma and Biruk (2016) studied the effect of
ATM service quality on customer satisfaction in Ethiopian commercial Banks in Debremarkos
employing SERVQUAL model. Likewise, Selam (2018) conducted a study with regard to the
assessment of ATM service quality and customer satisfaction in case of Commercial Bank of
Ethiopia, Addis Ababa using on SERVQUAL model. Also, Eskedar (2018) made a study on the
assessment of ATM service quality and customer satisfaction in case of United Bank Addis
Ababa branch using SERVQUAL model Moreover, Hena (2019) studied the impact of ATM
service Quality on customer satisfaction in case of WB Addis Ababa branch using SERVQUAL
model. Conversely, according to the researcher knowledge few researches have been done in
Ethiopia employing SERVPERF model such as Yared (2018) with regard to the assessment ATM
service quality and customer satisfaction in case of Lion International Bank in Addis Ababa and
Yidnekachew (2019) entitled the influence of service quality on customer satisfaction the case of
ATM service in CBE in Addis Ababa.

One serious problem with SERVQUAL model is that it involves collection of data on expectation
and perception scales using lengthy questionnaires consists of overall 44 items for both scales
makes a survey costly as well as time wasting both for the respondents and researchers.(Cronin
and Taylor, 1992, Jain and Gupta, 2004).Besides, the use of SERVQUAL model has drawn
criticism from Carman (1990) who argues that subjects should rate a product/service on criteria
that are relevant to the specific product/service supporting empirical researchers who argue that
the general attributes have potential to carry in-built bias towards dissatisfaction since
expectations are determined by the ideal product/service. Many empirical studies proved

5
SERVPERF’s validity, reliability, methodological soundness, superiority and psychometric
soundness. More specifically Lianxi, Z. (2004) and Aaron, T. & Robin, S. (2010) mentioned that
the performance-only measurement of service quality (SERVPERF) as determinants of
consumer satisfaction and subsequent behavioral intentions associated with banking services.
Therefore, this study focused on SERVPERF model to assess the performance of ATM service
quality in relation to customer satisfaction of WB in Dire Dawa branch.

1.3 Research Questions

To do the intended purpose as well as the research problem stated above, the researcher has
designed the following research questions.

1. What is the level of customer satisfactions who uses WB ATM?

2. What are the factors hindering customer satisfaction in WB ATM?
3. Which ATM service quality dimension brings satisfaction to WB ATM customers?
4. What are the major problems that customer face while using WB ATM?

1.4 Objectives of the Study

1.4.1 General objective

The general objective of this study is to assess the effect of ATM service quality on customer
satisfaction in WB Dire Dawa branch.

1.4.2 Specific objectives

There are a few specific objectives that need to be accomplished in the case of WB. These are

1. To analyze customer satisfaction on ATM service quality of WB.

2. To investigate the level of customer satisfaction who uses WB ATM.

3. To identify the major problems that customer face while using WB ATM.

6
 1.5 Hypothesis of the Study

In order to find out the relationship and effect of ATM service quality on customer satisfaction
the following hypothesis are proposed

H1: Tangibility has positive and significant effect on customer satisfaction.

H2: Reliability has positive and significant effect on customer satisfaction.

H3: Responsiveness has positive and significant effect on customer satisfaction.

H4: Assurance has positive and significant effect on customer satisfaction.

H5: Empathy has positive and significant effect on customer satisfaction.

1.6 Significance of the Study

This study aimed at examining the effect of ATM service quality on the customer satisfaction.
The significance of the study is to give adequate information on the ATM service WB is
currently providing and help it to know areas which need improvement and plan towards it so
that its customers would benefit from the quality of ATM service. Moreover, The outcomes of
this study assist other researcher for further study related to the assessment of ATM service
quality on customer satisfaction as experienced by ATM service customers.

1.7 Scope of the Study

This study was conducted in WB. So, the findings of the study are valid only for WB.
Furthermore, it is desirable if the impact of ATM service quality on customer satisfaction was
studied in each one of the bank in Ethiopian, but due to time, resource and financial constraints
the study is delimited to three ATM stations of WB in Dire Dawa branch namely: Megala,
Kezira and Konel. The study was guided by the one of the service quality model called
SERVPERF in order to assess the impact of five service quality dimensions on customer
satisfaction.

7
 1.8 Limitations of the Study

This study had some limitations. At the outset, most respondents were not willing to have the
questionnaire answered but the researcher kindly requested them to answer the questionnaire.
Moreover, the study was limited in scope and sample size on account of limited financial
resources and time. Finally, it was not included the bank customers who do not use ATM that
will help to compare the attitude of ATM users and non-users.

1.9 Organization of the Study

This study organized in to five chapters. The first chapter contains the introduction which
includes the background of the study, statement of the problem, objectives of the study,
hypothesis of the study, research questions, and significance of the study, scope and the
limitations of the study. The second chapter contains review of related literature pertinent to the
research. The third chapter deals with research methodology that incorporates, research
approach, research design, Population, source of data, sampling and sample size determination,
method of data collection, methods of data analysis, validity and reliability ,and ethical
considerations. The fourth chapter concerned with data presentation, analysis and interpretation.
The fifth chapter presents summary of the findings, conclusions and recommendations of the
study. Finally, list of reference materials used for conducting the study and questionnaire
annexed at the end.

8
 CHAPTER TWO

2. LITERATURE REVIEW

This chapter pinpoints literature review of the topic study. Moreover, different issues for example
concepts and definition of ATM, customer satisfaction, ATM service quality attributes, service
quality and its measurement, relationship between service quality and customer satisfaction,
problems associated with the use of ATM, empirical review and Conceptual Framework of the
Study.

2.1 Concepts and Definition of ATM

Financial service sector is essential for the sustainable growth of a country in order to increase
customer and modern service sector that facilitate to operate at international level for market
development of the economy. As bank one of the financial institutions that operates in borrowing
and lending money. They also take customer deposits in return for paying customers the annual
interest payment for depositing their money. With increasing technology banks made the life of
people much easier by moving and keeping their money in safe place as well as to access it at
any time without the need for direct interaction with bank staff by using an automated teller
machine (ATM) which is an electronic telecommunications device that enables customers of
financial institutions to perform financial transactions, such as cash withdrawals, deposits,
transfer funds, or obtaining account information, at any time and without the need for direct
interaction with bank staff. As a result, the number of bank customers preferring to use self-
service delivery systems is on the increase. This preference is attributed to increased autonomy in
executing the transactions. Banks are increasing their technology-based service options to remain
competitive. The ATM is an innovative service delivery mode that offers diversified financial
services like cash withdrawal, funds transfer, cash deposits, payment of utility and credit card
bills, cheque book requests, and other financial enquiries (Khan, 2010).

The ATM card helps the customer to be identified by a plastic ATM card with a magnetic stripe
or a plastic smartcard with a chip. The security is provided by the customer entering a personal
Identification number (PIN). As a result of this, the number of bank customers preferring to use
self service delivery systems is on the increase. This preference is attributed to increase

9
Autonomy in executing the transactions (Meena, 2015). Jane (2000) also noted that the customer
is identified by inserting a plastic ATM card with a magnetic strip or a plastic smart card with a
chip that contains a unique card number and some security information such as the expiration
date, and the ATM’s are conveniently placed in public places with the aim of enabling customers
to transact without the help of a teller of banking officer.

2.2 Customer Satisfaction

Customer satisfaction is one of the frequently researched concepts in marketing. Customer

satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of
satisfaction will vary from person to person and product/service to product/service.

Satisfaction is a person’s feeling of pleasure or displeasure appointment resulting from

comparing a product perceived performance in relation to his or her expectation (Kotler and
Keller, 2006). It can also be said that, Customer satisfaction is the measure of how well products,
service, support and engagement are able to meet the customer expectations.

Satisfaction could be the pleasure derived by someone from the consumption of goods or
services offered by another person, group of people, or an organization; or it can be the state of
being happy with a situation.

Customer satisfaction is defined as the extent to which products perceived performance matches
a buyer’s expectation (Kotler and Armstrong, 2005). It can also be said that, Customer
satisfaction is the measure of how well products, service, support and engagement are able to
meet the customer expectations. Satisfaction will also depend on product and service quality
(Kotler and Keller, 2006).According to Tse and Wilton (1988), customer satisfaction is defined
as the consumer’s response to the evaluation of the perceived discrepancy between prior
expectations and the actual performance of the product or service as perceived after its
consumption. Giese and Cote (2002) stated that customer satisfaction is identified by a response
(cognitive or affective) that pertains to a particular focus (i.e. a purchase experience and/or the
associated product) and occurs at a certain time (i.e.post-purchase, post-consumption). This
definition is supported by some other authors who think that consumer’s level of satisfaction is
determined by his or her cumulative experience at the point of contact with the supplier

10
(Sureshchander et al, 2002).

Alternatively, Westbrook and Oliver (1991) define customer satisfaction as a mental state which
results from customers „comparison of expectations prior to a purchase with performance after a
purchase. Halstead et al (1994) states that customer satisfaction is a transaction specific effective
response from customer’s comparison of product performance to some pre-purchase standard.
Enhancing customer satisfaction is the key to become successful in the long run and to standout
in a crowd of extreme competition specially in banking sector because competitors are offering
here somewhat similar product here.

According to Fornell (1992) in Balogun, Ajiboye and Dunsin (2013), customers satisfaction
holds the potentials for increasing an organization’s customer base, increases the use of more
volatile customer mix as well as the firm’s reputation, thereby resulting in competitive advantage
secured through intelligent identification and satisfaction of customer’s needs better and sooner
than competitors and sustenance of customer’s satisfaction through better products/services.

2.3 ATM Service Quality Attributes

Parasuraman et al. (1985) identify ten determinants for measuring service quality which are
tangibility, reliability, responsiveness, communication, access, competence, courtesy, credibility,
security, and understanding/knowledge of customers. Later these ten dimensions were further
purified and developed into five dimensions i.e. tangibility, reliability, responsiveness, assurance
and empathy to measure service quality. “SERVQUAL” Parasuraman et al.(1988). These five
dimensions identified as follows:

Tangibility: - Physical evidence and representations of the service, other customers in service
facility (Parasuraman et al., 1985). Tangibility Indicates, that customers choose tangibility factor
of service quality in the banking industry “Bank could build customer relationships by delivering
added tangible and intangibility elements of the core products” (Zineldin, 2005).

Reliability: - According to Parasuraman et al (1988) reliability is consistency of performance

and dependability, accuracy in billing, keeping records correctly, performing the service right at
the designated time. As stated by (Berry et al., 1990) service reliability is the service “core to

11
most customers and managers should use every opportunity to build a “do-it-right-first”
attitude”.

Responsiveness:- is the willingness or readiness of employees to provide service, timeliness of

service such as mailing a transaction slip immediately, calling the customer back quickly, giving
prompt service (Parasuraman et al.,1985).

Assurance: - is defined as “the employees’ knowledge and courtesy and the service provider’s
ability to inspire trust and confidence”. The trust and confidence may be represented in the
personnel who link the customer to the organization (Zeithaml et al., 2006).

Empathy: - As the word indicates it’s the understanding the deep feeling of others.
Understanding the feeling of others can be determined by knowing the customer’s name, his
preferences and his needs. Empathy can also be defined as the “Caring, individualized attention
the firm provides its customer (Zeithaml et al., 2006)

Literature provides significant relationship between quality of service and firms’ performance
based on improved productivity, increased market share, enhanced customers’ attraction and
loyalty, improved staff morale and sustained profitability (Lassar W. M., Manolis C., and Winsor
R. D., 2000). Use of ATM has become exceedingly admirable and popular among customers as
convenient mode of Banking Transactions. This technological innovation has transformed the
Banking Business. The advantages and benefits of using ATM have given new impulsion in
dimensions of quality of service and Banks are offering new choices to customers. The
commonly used model, SERVQUAL (Parasuraman et al., 1988) and SERVPERF (Cronin and
Taylor, 1992) depend on the similar dimension of SQ that includes tangibles, reliability,
responsiveness, empathy and assurance.

2.4 Service Quality and Its Measurement

Quality has been defined differently by different authors. Some prominent definitions include
‘conformance to requirements’ (Crosby, 1984), ‘fitness for use’ (Juran, 1988) or ‘one that
satisfies the customer’ (Eiglier and Langeard, 1987). As per the Japanese production philosophy,
quality implies ‘zero defects’ in the firm’s offerings. Quality has come to be recognized as a

12
strategic tool for attaining operational efficiency and improved business performance (Anderson
and Zeithaml, 1984; Babakus and Boller, 1992; Garvin, 1983; Philips, Chang and Buzzell, 1983).
This is true for the service sector too.

Several authors have discussed the unique importance of quality to serve firms (e.g., Normann,
1984; Shaw, 1978) and have demonstrated its positive relationship with profits, increased market
share, return on investment, customer satisfaction, and future purchase intention (Anderson,
Fornell and Lehmann 1994; Boulding et al., 1993; Buzzell and Gale, 1987; Rust and Oliver,
1994). One obvious conclusion of these studies is that firms with superior quality products
outperform those marketing inferior quality products.

Theoretically customers’ perception of service consists of two dimensions. Berry and

Parasuraman (1990) distinguish a process and an outcome dimension. Of the five dimensions of
quality, reliability is primarily concerned with the service outcome, whereas the rest are
primarily concerned with the service process. However, all five dimensions emphasize the
customer’s perception of the service rather than the service provider’s view of how the service
should be delivered.

Gronroos (2001) however makes a distinction between functional and technical quality. The
process of functional quality refers to how the service is delivered whereas technical quality
which is an outcome refers to what customers receive. In the case of the ATM, how cash is
processed is a functional benefit whereas effectiveness, less time spent on an ATM, easy to use
and efficiency over the traditional methods are known as technical benefit. Some of the
complaints that come from the customer are as a result of customers not knowing some of the
technical aspects of an ATM whose source of problems is various. Some problems connected to
ATM faults may require the attention of either the service provider, the bank or the
Communication’s Company to intervene whereas the customer may view the problem differently
due to lack of adequate knowledge on the operations of an ATM.

Various definitions of the term ‘service quality’ have been proposed in the past and, based on
different definitions; different scales for measuring service quality have been put forward.
SERVQUAL and SERVPERF constitute two major service quality measurement scales.

13
Empirical studies evaluating validity, reliability, and methodological soundness of service quality
scales clearly point to the superiority of the SERVPERF scale. The diagnostic ability of the
scales, however, has not been explicitly explicated and empirically verified in the past. It is the
SERVQUAL scale which outperforms the SERVPERF scale by virtue of possessing higher
diagnostic power to pinpoint areas for managerial interventions in the event of service quality
shortfalls. (Juan and Gupta 2004) in their study demonstrated the major managerial implication
of the measurements. Because of its psychometric soundness and greater instrument
parsimoniousness, one should employ the SERVPERF scale for assessing overall service quality
of a firm. The SERVPERF scale should also be the preferred research instrument when one is
interested in undertaking service quality comparisons across service industries. On the other
hand, when the research objective is to identify areas relating to service quality shortfalls for
possible intervention by the managers, the SERVQUAL scale needs to be preferred because of its
superior diagnostic power.

2.5 Relationship between service Quality and Customer Satisfaction

The relationship between service quality and customer satisfaction has been discussed in
numerous previous researcher papers. Most of those papers present that service quality has
positive related relationship with customer satisfaction. In other words, service quality influence
customer satisfaction and vice versa customer satisfaction influence quality (Jun &Cai, 2010).

Parasuraman stated that there is a distinction between service quality and customer satisfaction:
perceived service quality is a global judgment or attitude relating to the superiority of the service,
whereas customer satisfaction is related to a specific transaction (Parasuraman, Zeithaml, &
Berry, 1988).

However, many researchers have investigated the relationship between service quality and
customer satisfaction. Cronin and Taylor (1992) tested this relationship and conclude that
perceived service quality leads to customer satisfaction. The other studies also conclude that
service quality is the antecedent of satisfaction (Spreng &Mackoy, 1996; Brady & Robertson,
2001) and is the main factor which affects satisfaction (Ruyter, Bloemer & Pascal, 1997).

There is no doubt that in the world’s today intensive competition, once a business wants to

14
survive, they have to improve the service quality that helps them to a different advantage over
their rivalries. Service Quality therefore has become one of the critical factors for satisfying and
retaining valued customers in every industries and banking is not an exception. Many scholars
indicate that high service quality results in customer satisfaction and loyalty with the product or
service. A satisfied customer will have the willingness to recommend someone else, reduction in
complaints and the bank can achieve the customer retention. According to Bedi (2010), the cost
of retaining existing customer by improving the quality of product and services is perceived to
be significantly lower than the cost of achieving the new customers.

2.6 Problems Associated with the use of ATM

According to study by Olaewe and Mutahir (2015) in Nigeria, ATM allows a bank customer to
conduct his/her banking transaction from almost every other ATM machines in the world.
However, the spread of the machines has been generating a lot of heat as customer’s face is
splurge of frustration in using it, either the machine will not dispense cash or debit transaction
when the cash is not dispensed or card get stuck in them. Indicate that the proliferation of the
machines is given some concern. As with every other technological breakthrough, the ATMs
have generated astronomical challenges and problems for the beneficiaries of financial services.

According to the study by Hana (2017) ATMs provide an extremely useful service to bank
customers, at times they can be very frustrating to use and therefore there is a lot of room for
improvement in the interface design. The interface enables communication between the user and
the machine. Therefore good user interface design is imperative for high usability levels.

Based on the study conducted by Adimasu (2018) there are a lot of problems which need
immediate and long term solutions to improve service system like network interruption, limited
amount of withdrawal per day, card retention and unsuitability of installation place for the
disabled in Commercial Bank of Ethiopia, Akaki Branch.

Habte (2019) studied about the three most frequent problems in Oromia International Banks that
ATM customers face while they use the bank ATM. Among the list of fourteen problems poor
interconnectivity of ATM network, ATM out of order and inadequacy of number of ATMs were
mentioned in rank order by ATM customers as the problems they encounter while using ATM.

15
 2.7 Empirical Review

Lemma and Biruk (2016) studied the effect of ATM service quality on customer satisfaction in
CBE in Debremarkos town. Cross-sectional data collected from 190 customers of Ethiopian
commercial banks in Debremarkos town using SERVQUAL instrument. The study used
Statistical tools such as mean, standard deviation, correlation, and multiple regression models.
The study indicated that except assurance, tangibility, reliability, responsiveness and empathy
have positive and significant effect on customer satisfaction.

Yared (2018) conducted a study with the title “An assessment of ATM service quality and
customer satisfaction: in case of Lion International Bank S.C in Addis Ababa based on
SERVPERF model. Convenience sampling was used to select the sample. The study used
descriptive research method. Primary data was collected from a sample of 337 ATM customers
of LIB located in Addis Ababa using structured questionnaires. The data from the questioners
were analyzed using SPSS version 20. The correlation analysis result reveals that there is
significant and positive relationship between ATM service quality dimensions and customer
satisfaction. The regression analysis result shows that all ATM service quality dimensions have
positive and significant impact on customer satisfaction.

Anber et al. (2011) conducted a research about service quality perspectives and customer
satisfaction in commercial banks working in Jordan. The research examined the level of service
quality as perceived by 260 ATM customers and its effect on customer satisfaction using
SERVPERF model consisting 20 items to measure all the ATM service quality dimensions. The
results indicated that all the ATM service quality dimensions have significant influence on
customer satisfaction when 26.1% of customer satisfaction can be explained by them.

Nham and Phan (2015) examined the Impact of service quality on customer satisfaction of
automated teller machine service: case study of a private commercial joint stock bank in
Vietnam. The study applies SERVPERF framework to analyze the data collected from a

16
questionnaire survey and found that Assurance and Tangibles factors significantly impact on the
customer satisfaction.

Yidnekachew (2019) assessed customer satisfaction in ATM service in the case of CBE using
SERVPERF model. The study collected primary data from 385 ATM holders of CBE using
convenience sampling method. Primary data were analyzed using SPSS version 20. The
correlation analysis result shows that all ATM service qualities are significantly and positively
associated with overall customer satisfaction. Besides, the regression analysis shows that
tangibility, reliability, responsiveness, assurance and empathy are highlighted as significant
predictors and key factors in determining customer satisfaction.

Mwatsika (2014) studied about Customer satisfaction with ATM banking in Malawi. The study
conducted on data collected from 353 ATM card users. The study adopted the importance-
performance approach (Fishbein and Ajzen, 1975) to measure customer satisfaction.
Measurement of satisfaction was based on performance only (SERVPERF). Descriptive and
correlation analysis used to answer research questions. The result shows that all service quality
dimensions significantly correlate with customer satisfaction and responsiveness was the least
performing service quality dimension.

2.8 Conceptual Framework

The theoretical framework of this study was based on SERVPERF (Service performance) model
Cronin and Taylor‘s (1992) to the measurement of customer satisfaction with ATM banking and
customer satisfaction. It has been used in many researches (Zhou 2004; Hudsonet al. 2004;
Pham, Nguyen 2007).There was a total of 25 ATM attributes adopted from the empirical studies.
These ATM banking attributes fall within the five dimensions of service quality (Parasuraman et
al, 1988) that include: tangibles, reliability, responsiveness, assurance and empathy.

Figure 1: Conceptual Framework of the Study

Independent Variables Dependent Variable

Tangibility
Reliability Customer Satisfaction
Responsiveness
Assurance 17
Empathy
 Source: Cronin and Taylor, 1992

CHAPTER THREE

3. RESEARCH METHODOLOGY

In this section the research approach, research design, population of the study, source of data,
sampling and sample size determination, method of data collection, method of data analysis,
validity and reliability, and ethical consideration are discussed in detail.

3.1 Research Approach

Quantitative research involves large samples and planned questionnaire that is then numerically
and statistically analyzed (Areeba et al., 2016). The quantitative data enables the researcher to
analyze objectively by using descriptive and inferential statistics. So, Quantitative research
approach was used in this study to analyze data measurements that can be quantified in the form
of numbers using SPSS version 25.

3.2 Research Design

A research design provides a framework for the collection and analysis of data. A choice of
research design reflects decisions about the priority being given to the following; expressing
causal connections between variables, generalizing to larger groups of individuals than those
actually forming part of the investigation, understanding behavior and meaning of that behavior
in its specific social context and having a temporal appreciation of social phenomena and their
interconnections (Bryman & Bell, 2007). Both descriptive and explanatory study designs were
applied to conduct this research. Application of descriptive research design was chosen as the
researcher was interested in describing the existing service quality dimensions that lead to
customer satisfaction. And explanatory research design, to explaining, understands and controls
the relationship between variables. An explanatory research design is a correlation design that
enables the researcher to examine the extent to which two or more variables are associated.

18
Moreover, this type of research design provides the researcher to collect data at one point in time
(Creswell, 2012).

3.3 Population of the Study

A study population refers to the group one want to generalize to and the group from which a
sample is taken for in a study. In this study, the population from which a sample is drawn
consisted of WB ATM service customers in Dire Dawa irrespective of their gender, age, job
grade or qualification. There are 20,465 active ATM users in Dire Dawa city.

3.4 Sources of Data

The choice of particular method of collecting data depend on the purpose of collecting data, the
information being collected, the resource available for the research and the skill of the researcher
(Kothari,2004). In order to achieve the stated objectives the data for this study was obtained from
both primary and secondary source. Primary data sources are those data that were gathered for a
specific research project. Primary data are more accurate and reliable compared to secondary
data (Saundra, Lawis, & Thornhill, 2003). Primary data source is what the researcher
originally collected from the sample or target population of the study. The source of primary
data for this research was ATM users of WB in Dire Dawa branches. The secondary data
assessed through published work books, magazines, journals and related articles that were for the
better understanding ATM service quality and customer satisfaction in WB.

3.5 Sample Size and Sampling Techniques

Under Dire Dawa District Office, there are four branches which are found in Dire Dawa namely:
Dire Dawa branch, Hafet-Issa branch, Kezira branch and Sabian branch. The researcher selected
three branches. These are Dire Dawa branch, Hafet-Issa branch and Kezira branch using
purposive sampling technique on account of its convenience and proximity to the researcher.
There are 20,465 active ATM customers which are found in four branches of which 15,000 ATM
customers are taken as population for the study. To determine the sample size, a previously

19
proven formula (Yamane, 1967) is applied. That is,
N 15,000
n= 2
n= 2
=389.61=389
1+ N (e) 1+15,000 (0 . 05)
n= Sample size N= Total of population e= Sampling error 5% at 95% of level of confidence.
Using this formula, considering 5 percent margin of error, 95 percent level of precision and a
proportion of 95 percent for the maximum possible degree of variability the sample size taken
from the population are 389 respondents. However, after considering the homogeneity nature of
the population and the difficulty of data collection owing to the Pandemic Covid-19 the
researcher decided to use one third of the calculated sample size; as a result, 130 respondents are
selected. Convenience sampling is a non-probability sampling technique where subjects are
selected because of their convenient accessibility and proximity to the researcher (Black, 1999).
Convenience sampling technique is used for data collection because respondents are selected
based on easy of access and availability. Fourty-three questionnaires are prepared to distribute to
Dire Dawa and Kezira branches and fourty-four questionnaires are prepared to distribute to
Hafet-Issa branch too.

3.6 Methods of Data Collection

Primary data were gathered through structured questionnaire. The questionnaire was developed
by SERVPERF model. The questionnaire has three sections. The first section is about
demographic characteristics of the respondents and the second one consists of five points Likert
rating scale questions about the five dimensions of ATM service quality and customer
satisfaction. The respondents rated each statement using Likert scales of 1 to 5.The questions
were 23 close ended questions. The last section contains 5 open-ended questions related to
problems faced while using ATM by customers of the bank. Secondary data were drawn from
journal articles, books and published literatures that support the study from empirical studies.

3.7 Methods of Data Analysis

This study used Statistical Package for Social Science (SPSS) program version 25 to analyze
data. The responses were edited and variables were also coded before analysis. The quantitative
data that gathered by the researcher were analyzed by using descriptive statistics such as
percentage, frequency, mean, standard deviation and were also interpreted using tables.
Correlation and regression analysis were used to analyze and present the data. Pearson’s

20
correlation analysis was used to find out if there was a relationship between the independent
variables and the dependent variables. Likewise, regression analysis was used to test hypotheses
of the study. The multiple linear regression model is specified as follow:
Customer satisfaction = f (ATM service quality)
Basically, CS = β0 + β1 Tan + β2 Rel + β3 Res + β4 Ass + β5 Emp + ε
Where, CS=Customer Satisfaction, Tan = Tangibility, Rel = Reliability, Res = Responsiveness,
Ass = Assurance, Emp = Empathy, β0 = Constant, β1 up to β5 = Regression coefficients,
ε = Error term.

3.8 Validity and Reliability

Validity and reliability are critical features of effective research. Validity refers to the extent to
which questions in an instrument accurately measure the variables therein; however, reliability
refers to the degree to which a set of variables are consistent with what they are intended to
measure (Hacker et al., 2003). According to Bryman and Bell (2007), a minimum threshold of
0.7 is acceptable for instrument reliability. In this research, the overall reliability of the scale is
acceptable as its coefficient (0.944) is greater than 0.7. Moreover, the scale consistency of each
dimensions are also acceptable for the reliability coefficient of tangibility, reliability,
responsiveness, assurance and empathy are of value 0.889, 0.928, 0.784, 0.771 and 0.825
respectively which are more than 0.7 and closer to 1.

Table 1 Reliability Statistic

Dimensions No of Items Cronbach alpha

Tangibility 4 .889
Reliability 5 .928
Responsiveness 5 .784
Assurance 5 .771
Empathy 3 .825
Total 22 .944
Source: Compiled by the researcher from SPSS version 25 result (2021)

21
 3.9 Ethical Consideration

This study like other academic research considers ethical issue, moral conduct and commercial
confidentiality to the bank’s data and for the privacy of respondents. The questionnaires were
prepared in such a way that respondents are not required to write their names and personal
information on the questionnaire and the confidentiality of the data being collected is handled
with due care and used for academic purpose only.

22
 CHAPTER FOUR

4. DATA PRESENTATION, ANALYSIS AND INTERPRETATION

This chapter comprises data presentation, analysis and interpretation of the study. The main
purpose of the chapter is to offer analysis and interpretation of the survey finding by using
different statistical tools. It also consists of analysis and interpretation of major problems
encountered while using ATM. As per the sample size a total of 130 questionnaires were
administered and 105 (80.76%) questionnaires were successfully completed and returned by
respondents, but the rest 25 (19.23%) questionnaires were found invalid as they contained
several blank spaces.

4.1 Demographic profile of the respondents

In order to generally describe the characteristics of the respondent gender, age, educational back
ground, monthly income, and ATM status use were asked. Out of 105 respondents 64 (61%)
were males and 41 (39%) were females respondents. As a result it showed that the majority of
the respondents were male. With regard to, the respondents’ age, 25.7 % of the respondents
belong to the age group between 20-30 years, 27.6% of the respondents were between the ages of
31-40 years, 22.9% of the respondents are between the ages of 41-50years, and the respondents
who were above the age of 51 years were 23.8%. This result showed most of the respondents
was adult. Concerning to educational level of the respondents, 14.3% of them had certificate and
also 14.3% of them had Diploma ,46.7% of the respondents were holder of first degree, from the
stated list the others were Masters holder which comprises 23.8% plus 1% of the total
respondents possessed PhD and above. Thus, most of the respondents were educated and greater
number of them was first degree holders. In terms of income distribution of the sample, the
respondents who earned below 2,000 birr (21.9%) and between birr 8,001 and birr
14,000(21.9%) per month were the dominant one followed to them others earned from birr
14,001 up to 20,000 birr (21%). And also those who got from birr 2,001 up to birr 8,000 were
19% and the rest 16.2% earned greater than 20,000 birr. As can be seen from the frequency
distribution in table 2 below, majority of the respondents (26.7%) had been WB ATM customers
for 1-5 years, 25.7% of the respondents had been customers of WB ATM service for less than
one year. The rest for six up to ten years had stayed more than a decade was 23.8%.

23
 Table 2 Demographic profile of the respondents

Frequency Percent
Gender Male 64 61.0%
Female 41 39.0%
Total 105 100.0%
Age Classification 20-30 27 25.7%
31-40 29 27.6%
41-50 24 22.9%
>51 25 23.8%
Total 105 100.0%
Education Certificate 15 14.3%
Diploma 15 14.3%
Degree 49 46.7%
Master 25 23.8%
PhD and above 1 1.0%
Total 105 100.0%
Monthly <2000 23 21.9%
2001-8000 20 19.0%
Income
8001-14000 23 21.9%
14001-20000 22 21.0%
>20000 17 16.2%
Total 105 100.0%
ATM status use <1Year 27 25.7%
1-5Years 28 26.7%
6-10Years 25 23.8%
>10Years 25 23.8%
Total 105 100.0%
Source: own survey, 2021

4.2 Descriptive Analysis of ATM Service Quality Dimensions

This section presents the responses of the respondents concerning WB ATM service and their

24
degree of satisfaction on the service using descriptive statistics. Respondents’ responses were
identified based on ATM service quality dimensions such as Tangibility, Reliability,
Responsiveness, Assurance and Empathy of ATM service on customer satisfaction

4.2.1 Tangibility Dimension Analysis

Tangibility is a physical environmental state of affairs appeared as a clear confirmation of the

care and consideration paid for the details offered by the service provider. According to Kotler et
al, (2006), tangibility is the appearance of bank’s physical facilities, equipment, personnel and
communication material. Four items were presented to assess the tangibility dimension of WB
ATM banking service performance by its ATM customers. The outcome of the study analyses are
depicted in Table 3

Table 3 Descriptive Statistics of Tangibility Dimension

Tangibility Dimensions Mean Std. Deviation

1. ATM card has good appearance and suitable size. 3.39 1.187
2. The screen of ATM always displays clearly. 3.12 1.335
3. There is always instruction signboards at the place 3.19 1.241
ATM installed which is easy for customers to identify.
4 .Materials and equipment associated with ATM 3.06 1.270
service are visually appealing.
Cumulative mean and Std. Deviation 3.18 1.091

Source: own survey, 2021

As it is shown in table 3, the respondents agreed that WB ATM cards had good appearance and
suitable size with a mean value of 3.39 and standard deviation 1.187.This implies that the ATM
of WB offers average attention to ATM cards good appearance and suitable size so as to satisfy
its customers. The respondents also agreed that the screen of ATM always displayed clearly
with mean value of 3.12and standard deviation 1.335.This shows that customers are moderately
agreed that the ATM screen of WB always displayed clearly. Similarly, respondents agreed that
there were instruction signboards at the place ATM installed which is easy for customers to
identify with mean value 3.19 and standard deviation 1.241.This implies that WB provides

25
instructions to its ATM customers somehow well. Likewise, respondents agreed that those
materials and equipment associated with ATM service are visually appealing with mean 3.06 and
standard deviation 1.270.This shows that customers agreed that materials and equipment
associated with ATM service were visually appealing. As a result, most of the respondents were
moderately satisfied with SERVPERF dimensions of tangibility for ATM in WB operating Dire
Dawa branch with cumulative mean value 3.18 and standard deviation 1.091.

4.2.2 Reliability dimensions analysis

Reliability is the ATM‟s ability to provide the service unvaryingly and accurately. Reliability
depends on handling customers' services problems; performing services right the first time;
provide services at the promised time and maintaining error-free record. Furthermore, they stated
reliability as the most important factor in conventional service (Parasuraman et al.,
1988).Reliability is consistency of performance and dependability, accuracy in billing, keeping
records correctly, performing the service right at the designated time. Five items were presented
to examine the reliability dimension of WB ATM banking service currently by its ATM
customers. The outcome of the study analyses are showed in Table 4

Table 4 Descriptive Statistics of Reliability Dimension

Reliability dimension Mean Std. Deviation

5. WB commits to provide customers all the ATM services 3.22 1.240
(withdrawals, account management, money transaction etc) in
accordance with the terms specified in the signed contract.
6. Any clients ‘questions, complaints or concerns about ATM card 3.26 1.286
service are satisfactorily resolved by WB.
7. Customers are informed after every transaction done on ATM. 3.13 1.264
8. ATM carries out exactly what customers required. 3.50 1.153
9. Customers received ATM card at the time committed by WB. 3.30 1.194
3.28 1.082
Cumulative mean and Std. Deviation

Source: Own survey, 2021

As it is clearly seen in Table 4, the respondents agreed that WB had commitment to provide all
the ATM services such as withdrawals, account management, money transaction etc in
accordance with the terms specified in the signed contract to its ATM customers with mean

26
value 3.22 and standard deviation 1.240.This indicates that WB provides all the ATM services to
customers and customers are satisfied moderately. The respondents also reacted affirmatively
that their questions, complaints or concern about ATM card service were resolved satisfactorily
with mean value 3.26 and standard deviation 1.286.This implies that most of the respondents
agreed to WB has good customer service handling. Likewise, respondents agreed moderately that
they were informed after every transaction done on ATM with mean value 3.13 and standard
deviation 1.264.This implies that the bank informs its customers after every transaction done on
ATM and customers are somewhat satisfied. Further, respondents agreed that ATM had carried
out exactly what customers required with mean value 3.50 and standard deviation 1.153. This
reveals that respondents agree moderately that WB ATM carries out exactly what customers
required. Finally, respondents agreed above the average to the item Customers received ATM
card at the time committed by WB with mean value 3.30 and standard deviation 1.194. This is to
say, most of the respondents moderately agreed that they received ATM cards of WB at the time
committed by the bank. Accordingly, most of the respondents are marginally satisfied with
SERVPERF dimension of reliability for ATM in WB Dire Dawa with cumulative mean value
3.28 and standard deviation 1.082. From this fact, it is clearly seen that WB in Dire Dawa branch
has given moderate attention to reliability dimensions of ATM service as perceived by
customers.

4.2.3 Responsiveness dimensions analysis

Responsiveness is the willingness or readiness of employees to provide service, timeliness of

service such as mailing a transaction slip immediately, calling the customer back quickly, giving
prompt service (Parasuraman et al., 1985).Regarding to the responsiveness of WB ATM service
quality, five items were offered to the respondents to rate and the results of the study analyses are
presented in table 5 below.

Table 5 Descriptive Statistics of Responsiveness Dimension

27
 Responsiveness Dimension Mean Std. Deviation
10. WB staff is willing to answer any questions or concern of 3.22 1.330
customers.
11. WB staff is not willing to help customers solving their 3.38 1.382
problems or concerns.
12. WB does not heartedly serve customers in peak hours. 3.11 1.347
13. ATMs are installed at places which are convenient for 3.22 1.315
customers to make transactions.
14. ATM always provides enough cash for customers to 3.05 1.368
withdraw on special occasions or holidays.
Cumulative mean and Std. Deviation 3.20 0.988

Source: Own survey, 2021

As the above table 5 depicted that majority of the respondents agreed to all items of the
responsiveness. Respondents agreed to the item WB staff are willing to answer any questions or
concern of customers with mean value 3.22 and standard deviation 1.330. This indicates that
most of the customers are moderately satisfied with WB staff willingness to answer any question
or concern of them. Besides, the respondents agreed to the item WB staff help them solving their
problems with mean value 3.38 and standard deviation 1.382.This shows that majority of the
customers are moderately satisfied with WB staff help to solve their problems. Similarly, the
respondents agreed to an item WB serve customers in peak hours with mean value 3.11 and
standard deviation 1.347.This to say that customers are marginally satisfied to the bank service in
peak hours. Similarly, the respondents agreed to the item ATMs are installed at places which are
convenient for customers to make transactions with mean value 3.22 and standard deviation
1.315.This depicts that WB ATMS are located somehow conveniently to customers. Likewise,
respondents agreed to the item ATM always provides enough cash for customers to withdraw on
special occasions or holidays with the mean value 3.05 and standard deviation 1.368.
Consequently, majority of the respondents are moderately satisfied with SERVPERF dimension
of responsiveness for ATM in WB Dire Dawa branch with cumulative mean value 3.20 and
standard deviation 0.988.

4.2.4 Assurance dimension analysis

Assurance is defined as “the employees’ knowledge and courtesy and the service provider’s

28
ability to inspire trust and confidence”. The trust and confidence may be represented in the
personnel who link the customer to the organization (Zeithaml et al., 2006). With regard to
assurance dimension of WB ATM service quality, respondents were asked to rate as follows.

Table 6 Descriptive Statistics of Assurance Dimension

Assurance Dimension Mean Std. Deviation

15. ATM card issuing staff always gets information clearly about 3.29 1.269
cards and policies while consulting with customers.
16. ATM card issuing staff has a clear and understandable 3.46 1.308
explanation to customers.
17. Customers feel safety when they make any transaction on ATM. 3.43 1.285
18. WB staff is always gentle and polite. 3.43 1.322
19. Customers put more and more trust and confidence in ATM staff 3.50 1.272
after each transaction.
Cumulative mean and Std. Deviation 3.41 0.932
Source: Own survey, 2021
The above table 6 discloses that ATM card issuing staff of WB always gets information clearly
about cards and policies while consulting with customers with mean value 3.29 and standard
deviation 1.269. ATM card issuing staff of WB has a clear and understandable explanation to
customers with mean value 3.46 and standard deviation 1.308. It implies that the respondents
were satisfied moderately by employee’s clear and understandable explanation. Customers feel
safety when they make any transaction on ATM with mean value 3.43 and standard deviation
1.285.From this one can conclude that the respondents felt safety during transaction service on
ATM. WB staff is always gentle and polite with mean value 3.43 and standard deviation 3.322.
This indicates that respondents agreed somewhat that employees had been gentle and polite.
Customers put more and more trust and confidence in ATM staff after each transaction with
mean value 3.50 and standard deviation 1.272. This confirms that majority of the respondents are
satisfied moderately by the trust and confidence of employees. As a consequence, most of the
respondents agreed to SERVPERF dimensions of assurance with cumulative mean value 3.41
and standard deviation 0.932. Having seen this fact, ATM of WB in Dire Dawa branch has
offered average attention to assurance of ATM service performance.

29
 4.2.5 Empathy Dimensions Analysis

Empathy can be defined as the “Caring, individualized attention the firm provides its customer
(Zeithaml et al., 2006,).It is the understanding the deep feeling of others. Understanding the
feeling of others can be determined by knowing the customer’s name, his preferences and his
needs. Respondents were asked to indicate their level of agreement to three items in table 7.

Table 7 Descriptive Statistics of Empathy Dimension

Empathy Dimension Mean Std. Deviation

20. WB always spends a lot of time to understand the 3.53 1.233

concerns of customers.
21. WB always takes care for each and every 3.48 1.287
individual customer.
22. Provision of caring and individualized attention to 3.31 1.340
customers provided by call center is available in time
of request.
Cumulative mean and Std. Deviation 3.44 1.107
Source: Own survey, 2021

As table 7 describes that employees of WB in Dire Dawa branch always spends a lot of time to
understand the concerns of customers with mean value 3.53 and standard deviation 1.233.Having
this fact, it is possible to recognize that most of the respondents agreed moderately that
employees of the bank spent a lot of working hour with customers. WB always takes care for
each and every individual customer with mean value 3.48 and standard deviation 1.287.It implies
that more than average respondents are satisfied with employee’s attention to all the customers.
Provision of caring and individualized attention to customers provided by call center is available
in time of request with mean value 3.31 and standard deviation 1.340. This reveals that
respondents agree moderately that the bank gives at most attention during service transaction to
the best interest of its customers. Hence, most respondents modestly satisfied by SERVPERF
dimension of empathy with cumulative mean value of 3.44 and standard deviation 1.107.

4.3 Customer Satisfaction Analysis

Cronin et al., (2000) mentioned in their study that satisfied customer repeat his/her experience to
buy the products and also create new customers by communication of positive message about it

30
to others. On the other hand, dissatisfied customer may switch to alternative products/services
and communicate negative message to others.

Table 8 Descriptive Statistics of Customer Satisfaction

Percentage and frequency

Customer Satisfaction Std.
Mean 1 2 3 4 5 Total
Item Deviation
I am totally satisfied 1.9% 33.3% 2.9% 38.1% 23.8% 100%
with the overall ATM
3.49 1.233 2 35 3 40 25 105
service quality of WB
Source: Own survey, 2021
In order to measure the level of customer satisfaction in WB ATM card holders, this study asked
the perception level of the respondents with a statement “I am totally satisfied with the overall
ATM service quality of WB”.As observed in table 8, the mean value of customer satisfaction is
3.49 and standard deviation 1.233.From the total of 105 respondents, 65(61.9%) of the
respondents are satisfied. Nonetheless, 37(35.2%) of the respondents are not satisfied with the
ATM service of the bank and 3(2.9%) of the respondents are neutral.

4.4 Tests of Assumptions of Multiple Regression Model

Most statistical tests rely on certain assumptions about the variables used within an analysis to
ensure that the analysis is as accurate and true as possible, and therefore valid(Osborne &Waters,
2002; Stevens, 2009). Assumptions are critical in statistics because if the underlying
assumptions are not valid, then the process is unreliable, unpredictable, and out of the
researcher’s control (Stevens, 2009). This could lead the researcher to draw conclusions that are
not valid or scientifically unsupported by the data. A Multiple regression examines the
relationship between a single outcome measure and several predictors or independent variables
(Jaccard, Guilamo-Ramos, Johansson & Bouris, 2006).The assumptions of multiple regressions
include the assumptions of linearity, normality, and multicollinarity are discussed separately in
the proceeding sections before a complete regression analysis can be performed.

4.4.1 Normality Test

Screening for normality is an important early step when conducting a multiple regression, as

31
residuals are normally distributed is assumed (Stevens, 2009; Tabachnick & Fidell, 2006). Non-
normal distributions that are positively or negatively skewed, contain large kurtosis, or have
extreme outliers can distort the obtained significance levels of the analysis, resulting in the
standard errors becoming biased (Osborne & Waters, 2002). Though a multiple regression is
generally considered to be quite robust to violations of normality, a small sample size can
actually increase the seriousness of non-normality of a distribution (Osborne & Waters, 2002).
Outliers may have stronger influence on normal distribution when the sample size is small,
whereas standard errors for both skewness and kurtosis decrease with larger samples, as there
will most likely be only minor deviations from normality (Tabachnick & Fidell, 2006).

Figure 2: Normal P-P Plot of Regression Standardized Residual

Source: Own Survey 2021

The normality assumption can be tested through the visual examination of normal probability

32
plots (P-P plots) of the standardized residuals. In a P-P plot, the normal distribution is depicted
by a random scatter of plots around a 45 degree line. Figure 2 above showed the normality of
data in this research.

Figure 3: Histogram of Regression Standardized Residual

Source: Own Survey 2021

In addition to Normal Probability plots of residuals, the histogram was used to test the normality
of data. Thus, Figure 3 revealed that the residuals are normally distributed around its mean of
zero.

4.4.2 Linearity Test

Relationships between variables are considered linear when they are consistent and directly
proportional to each other (Stevens, 2009; Tabachnick & Fidell, 2006). Violations of this
assumption may result in the estimates obtained from the analysis, such as R 2, regression
coefficients, standard errors, and statistical significance, being biased; therefore, not portraying
the accurate or true population values (Osborne & Waters, 2002; Tabachnick & Fidell, 2006).
According to Hoxx (1995), the results from the analysis will underestimate the true relationship
between the independent variables and dependent variable if the relationship is not linear.The
linearity assumption can be tested through the visual examination of residual plots (Kivilu, 2003;
Osborne & Waters, 2002; Stevens, 2009). A residual scatter plot is a figure that depicts one
axis for the standardized residuals and the other axis for the predicted values (Stevens, 2009). If
the linearity assumption is met, the standardized residuals will scatter randomly around a
horizontal line which represents the standardized residuals equaling zero (Stevens, 2009;

33
Tabachnick & Fidell, 2006). It is obvious that from figure 4 the data in this research met
linearity assumption.

Figure 4: Residual vs. Predicted plot

Source: Own Survey 2021

4.4.3 Multi-collinearity Test

In multiple regression model, before making a regression analysis it is important to test the
multi-collineartity test. The multi-collinearity test is a test to identify a strong correlation
between two or more predictors in a regression model. This assumption can be assessed by
examining tolerance and the variance inflation factor (VIF). And by using correlation matrix VIF
values well below 10 and the tolerance statistics well above 0.2 can safely to conclude that there
is no collinearity within the data (Field, 2009). And also the correlation between the independent
variable lies less than 0.8 is an indicator of absence of multi-collinearity with in the data thus the
model is pass both test. A small tolerance value indicates that the variable under consideration is
almost a perfect linear combination of the independent variables already in the equation and that
it should not be added to the regression equation. A good regression model must not have a
strong correlation among its independent variables or must not have a multi-collinearity problem

34
and that the value of variance inflation factor (VIF) must have a value between 1 and 10 and the
tolerance level should be more than 0.2

Table 9 Collinearity Statistics for the Service Quality Dimensions

Independent Variables Collinearity Statistics

Tolerance VIF
Tangibility .363 2.756
Reliability .471 2.121
Responsiveness .423 2.362
Assurance .466 2.144
Empathy .413 2.423
Source: Own Survey 2021
The results from the Table 9 showed that there is no Multicollinearity problem among all the
independent variables as tolerance value and variance inflation value are above 0.2 and below 10
respectively. This shows that there is no multi-collinearity issue among the predictor variables in
the data set. According to Bryman and Cramer (2001), the Pearson’s r between each pair of
independent variables should not exceed 0.80; otherwise independent variables that show a
relationship at or in excess of 0.80 may be suspected of exhibiting multi-Collinearity. The
correlation was found below of 0.80 so, the data in this study has no Multi-collinearity problem.

35
 4.5 Correlation Analysis

A correlation coefficient is a statistical tool used to summaries the relationship between two
variables with a single number that falls between -1.00 and +1.00 (Welkowitz, Cohen, & Ewen,
2006). Morgan, Leech, Gloeckner, and Barrett (2004) stated that: -1.0 indicates perfect negative
correlation, 0.0 indicate no correlation, and + 1.00 shows perfect positive correlation. In order to
observe the individual linear correlation between the customer satisfaction and the each variable
under the service quality, Pearson’s product moment correlation test was done. Based on
Pallant(2007), the following guidelines are used for describing correlation strength
 0.10 < r < 0.29 = weak correlation
 0.30 < r < 0.49 = medium correlation
 0.50 < r < 1.0 = strong correlation

Table 10 Correlation results between the customer satisfaction and the service quality

Tangibility Reliability Responsiveness Assurance Empathy Customer

Satisfaction
Tangibility 1

Reliability .613** 1
Responsiveness .722** .597** 1

Assurance .657** .604** .587** 1

Empathy .667** .663** .623** .642** 1

Customer .773** .709** .735** .712** .784** 1

Satisfaction
Sig.(2-tailed) .000 .000 .000 .000 .000
** Correlation is significant at the 0.01 level (2-tailed).
As it is depicted in Table 10, there are positive and significant linear correlations between each
dimension of service quality and customer satisfaction. Very strong association is observed
between empathy and customer satisfaction (0.784) followed by tangibility (0.773),
responsiveness (0.735), assurance (0.712) and reliability (0.709).The result shows that all the
coefficients of correlation are positive and there is also correlation among independent variables.
Therefore, it can be concluded that the delivery of better quality service ensures higher customer

36
satisfaction.

4.6 Multiple Regression Analysis

According to George et al (2003) multiple regression analysis is mostly applied in order to

analyze the relationship between a single continuous dependent variable and multiple continuous
on categorical independent variables. It is a method which uses more than one independent
variable to explain variance in a dependent variable. In this study, the purpose of this analysis is
to examine the dimensions of ATM service quality towards the customer satisfaction in WB and
to identify which of the dimension of service quality causes the most significant effect toward
customer satisfaction in WB.

Table 11 Model Summary between Service Quality Dimensions and Customer Satisfaction

Model R R square Adjusted R Std. error of

square estimate
1 .885a .783 .772 .589

a. Predictors: (Constant), Tangibility, Reliability, Responsiveness, Assurance, Empathy

b. Dependent Variable: Customer Satisfaction

The above model summary table presents how much of the variance in the customer satisfaction
is explained by the five SERVPERF dimensions of service quality. As table 11 exhibits, the
value of R is 0.885. It determines the strength of the relationship between predictors and
dependent variable. The results have shown that 88.5% variations are caused by independent
variables. Besides, table 11 shows that the value of R square is 0.783. It implies that the predictor
variables have accounted for 78.3 % of the variance in the dependent variable; the remaining
21.7 % unexplained variance could be attributed to other factors outside this regression model.

Table 12 ANOVA TABLE

Model Sum of Squares Df Mean Square F Sig

1 Regression 123.830 5 24.766 71.278 .000b
Residual 34.398 99 .347
Total 158.229 104
a. Dependent variable: I am totally satisfied with the overall ATM service quality of WB

37
 b. Predictors: (Constant), Tangibility, Reliability, Responsiveness, Assurance, Empathy
ANOVA Table 12 above presents that there is a relationship between customer satisfaction and
independent variables as the result of significant value or P value is less than 0.05.In terms of F-
statistics (71.278) at significant level of 0.000, which means there is a relationship between
SERVPERF dimensions and customer satisfaction. It indicates that the model and the data are
well fit in explaining the dependent variable or customer satisfaction.

Table 13 Regression Coefficients Model Analysis

Un-standardized Standardized
Model Coefficients Coefficients
B Std. Error Beta T Sig

1 (Constant) -.578 .236 -2.450 .016

Tangibility .264 .088 .233 2.999 .003
Reliability .176 .078 .154 2.259 .026
Responsiveness .239 .090 .192 2.663 .009
Assurance .206 .091 .156 2.274 .025
Empathy .342 .081 .307 4.208 .000
a. Dependent Variable: Customer Satisfaction
As per the multiple regression result customer satisfaction is positively influenced by tangibility,
reliability, responsiveness, assurance and empathy. Based on the unstandardized coefficients
tangibility has a coefficient of (B= 0.264) with significant value 0.003(< 0.05), reliability has a
coefficient of (B= 0.176) with significant value 0.026(< 0.05), responsiveness has a coefficient
of (B= 0.239) with significant value 0.009(< 0.05), assurance has a coefficient of (B= 0.206)
with significant value 0.025(< 0.05) and empathy has a coefficient of (B= 0.342) with significant
value 0.000(< 0.05). Thus, empathy dimension has the most significant impact on customer
satisfaction followed by tangibility, responsiveness, assurance and reliability.
Model Specification:
CS = β0 + β1 Tan + β2 Rel + β3 Res + β4 Ass + β5 Emp + ε
CS = -0.578 + 0.264 Tan + 0.176 Rel + 0.239 Res + 0.206 Ass + 0.342 Emp + ε
When all independent ATM service quality dimensions are zero, the value of the dependent
variable will be -0.578. This means that with the absent of all quality dimensions customers are
dissatisfied with a negative value within the significant level. Among the ATM service quality

38
dimensions, empathy is found with the highest coefficient (0.342). This implies that a 1%
increase in empathy will lead to 34.2% increase in customer satisfaction. Furthermore, tangibility
is found with coefficient (0.264). This shows that a 1% increase in tangibility will lead to 26.4%
increase in customer satisfaction. Besides, responsiveness is found with coefficient (0.239). This
implies that a 1% increase in responsiveness will lead to 23.9% increase in customer satisfaction.
Moreover, assurance is found with coefficient (0.206).This shows that a 1% increase in
assurance will lead to 20.6% increase in customer satisfaction. Finally, reliability is found with
coefficient (0.176). This means a 1% increase in reliability will result in 17.6% increase in
customer satisfaction.

4.7 Results of research Hypotheses

Table 14 Hypotheses Results

Hypotheses P- Value Results

H1:Tangibility has positive and significant P=0.003<0.05 Significant

effect on customer satisfaction

H2: Reliability has positive and significant P=0.026<0.05 Significant

effect on customer satisfaction

H3: Responsiveness has positive and P=0.009<0.05 Significant

significant effect on customer satisfaction

H4: Assurance has positive and significant P=0.025<0.05 Significant

effect on customer satisfaction

H5: Empathy has positive and significant P=0.000<0.05 Significant

effect on customer satisfaction

The results of multiple regression in table 14 indicate that tangibility has a positive and
significant effect on customer satisfaction with (beta= 0.233, P<0.05). So, hypothesis H1 is
accepted. Besides, the Reliability has positive and significant effect on customer satisfaction with
beta value (beta= 0.154, p<0.05).Thus, hypothesis H2 is accepted. Moreover, the
Responsiveness has positive and significant effect on customer satisfaction with beta value

39
(beta= 0.192, p<0.05). Hence, hypothesis H 3 is accepted. Furthermore, the assurance has positive
and significant effect on customer satisfaction with beta value (beta= 0.156, p < 0.05).
Consequently, hypothesis H4 is accepted. Finally, the empathy has a positive and significant
effect on customer satisfaction with beta value (beta= 0.307, p < 0.05). As a result, hypothesis H5
is accepted.

4.8 Responses on major Problems encountered while Customers using ATM

With regard to major problems encountered while customers using ATM, out of 105 respondents
76 respondents gave a list of problems they frequently encountered. Among the problems
customers confronted while using ATM, network problem was mentioned as the major problem
by 45(59.2%) respondents while using ATM. Correspondingly, the problem related with
reduction in balance without cash payment was refereed as a challenge by 13(17.1%)
respondents. Additionally, cards get blocked or jammed was stated as problem by 9(11.9%)
respondents. Likewise, ATM location inconvenience was raised as problems by 8(10.5%)
respondents. Eventually, ATM machines dispense poor cash notes was stated by 1(1.3%) of the
respondent. Table 15 presents summary of responses on problems faced while using ATM by
respondents.

Table 15 Responses on problems faced while Customers using ATM

No List of problems Frequency Percentage

1 Network problem 45 59.2%
2 reduction in balance without cash payment 13 17.1%
3 cards get blocked or jammed 9 11.9%
4 ATM location inconvenience 8 10.5%
5 ATM machines dispense poor cash notes 1 1.3%

Source: Own survey, 2021

40
 CHAPTER FIVE

5. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

This chapter deals with the overall summary of the findings, conclusions drawn from the
findings and the recommendations forwarded for improving ATM services quality and customer
satisfaction and also recommendation for future research.

5.1 Summary

As the results of descriptive analysis depicts that from five dimensions of ATM service quality
customers are most satisfied with empathy dimension of ATM service quality with mean value
(3.44) and standard deviation (1.108) followed by assurance with mean value (3.42) and standard
deviation (0.933), reliability with mean value (3.28) and standard deviation (1.082),
responsiveness with mean value (3.20) and standard deviation (0.988), and tangibility with mean
value (3.19) and standard deviation (1.091). As observed in table 8, the mean value of customer
satisfaction is 3.49 and standard deviation 1.233.From the total of 105 respondents, 65(61.9%) of
the respondents are satisfied. Nonetheless, 37(35.2%) of the respondents are not satisfied with
the ATM service of the bank and 3(2.9%) of the respondents are neutral. This implies that the
ATM of WB is providing somewhat adequate services to its customers and the customers are
marginally satisfied with the ATM service performance of WB in Dire Dawa branch.

The correlation result shows that there are a positive and significant relationship between the five
service quality dimensions and customer satisfaction. The highest correlation is observed
between empathy and customer satisfaction (0.784) followed by tangibility (0.773),
responsiveness (0.735), assurance (0.712) and reliability (0.709).The result shows that all the
coefficients of correlation are positive and there is correlation among independent variables.

Regression analysis has been carried out to know the effect of the independent variables on the
dependent variable. The result in model summary shows the value of R is 0.885. It indicates
88.5% variations are caused by independent variables. Besides, the value of R square is 0.783. It
implies that the predictor variables have accounted for 78.3 % of the variance in the dependent
variable; the remaining 21.7 % unexplained variance could be attributed to other factors outside

41
the regression model. ANOVA value indicates 0.000 significant values. The multiple regression
result also indicates that the five service quality dimensions have positive and significant effect
on customer satisfaction. Tangibility, reliability, responsiveness, assurance and empathy have
positive and significant impact on customer satisfaction with beta values (beta = 0.233, p<0.05),
(beta = 0.154, p<0.05), (beta = 0.192, p<0.05), (beta= 0.156, p < 0.05) and (beta= 0.307, p <
0.05) respectively. This study result is consistent with previous study Yidnekachew (2019),
Yared (2018) and Charlese Mawistika (2014) that all ATM service qualities have positive and
significant impact on customer satisfaction. However, except on the significance of tangibility
and assurance, this study result disagrees with Phan and Nham (2015) study that reliability,
responsiveness and empathy have no significant impact on customer satisfaction. In addition, the
finding of this study also shows that empathy is the most important factor to have positive and
significant effect on customer satisfaction.

The findings of this study shows that WB ATM customers faced frequent problems while using
ATM services such as network problem (46%), reduction in balance without cash payment
(17.1%), cards get blocked or jammed (11.9%), ATM location inconvenience (10.5%), ATM
machines dispense poor cash notes (1.3%). As a result, network problem takes the lion share.

5.2 Conclusion

The main purpose of this study was to assess the effect of ATM service quality on customer
satisfaction. Moreover, it had specific objectives which include analyzing customer satisfaction
on ATM service quality, investigating the level of customer satisfaction and identifying the major
problems that customer face while using ATM. Thus, based on the findings of this study the
following conclusions are made.

Though WB ATM customer‘s level of satisfaction mean score was 3.49, among the total
respondents 35.2% of them were not satisfied with the ATM service of the bank. This indicates
that the management and employees of the bank ought to work hard so as to improve the ATM
service quality level and satisfy the unsatisfied customers. The highest dimensional cumulative
mean is scored by empathy followed by assurance, reliability, responsiveness and tangibility. It
shows WB ATM customers are having good service quality in empathy dimension since the
bank staff always spends a lot of working hour to understand their customers and also the bank

42
staff always give attention to all customers. The least mean score is found for tangibility.

It implies that WB is investing relatively low to materials and equipment associated with ATM
to be visually attractive for customers.

The descriptive analysis of ATM service quality dimensions indicated attributes with the lowest
mean score that hindered customer satisfaction. To begin with, from the tangibility dimension
“materials and equipment associated with ATM service are visually appealing” scored the least
mean of all the items. Next, from the reliability dimension “Customers are informed after every
transaction done on ATM” scored the lowest mean of all the other items. Subsequently, from the
responsiveness dimension “ATM always provides enough cash for customers to withdraw on
special occasions or holidays” scored the least mean from the rest items. Moreover, from the
assurance dimension “ATM card issuing staff of WB always gets information clearly about cards
and policies while consulting with customers” scored the smallest mean of all the items. By the
end, from the empathy dimension “Provision of caring and individualized attention to customers
provided by call center is available in time of request” scored the lowest mean among other items

The findings from correlation results depict that there is positive and significant relationship
between ATM service quality dimensions and customer satisfaction. Empathy is found to have
the highest correlation with customer satisfaction next to tangibility, responsiveness, assurance
and reliability. The result shows that all the coefficients of correlation are positive and there is
correlation among independent variables. Therefore, it can be concluded that the delivery of
better quality service ensures higher customer satisfaction.

Likewise, the findings from regression results reveal that all the ATM service quality dimensions
have a positive and significant impact on customer satisfaction and empathy is the dominant
service quality followed by tangibility, responsiveness, assurance and reliability. Thus, the bank
should keep on maintaining its performance on all the dimensions of service quality to bring
satisfaction to customers.

Based on this study finding WB ATM customers encountered a few problems while using ATM
frequently. For instance, network problem as major challenge after reduction in balance without
cash payment, cards get blocked or jammed, ATM location inconvenience, ATM machines

43
dispense poor cash notes.

44
 5.3 Recommendations

Based on the findings of this research, the following recommendations are forwarded to the
management of the bank.

 According to the study findings, the researcher recommends WB to improve the quality of
ATM service in order to increase the level of customer satisfaction by all the ATM service
quality dimensions.
 The bank should upgrade the materials and equipment associated with ATM services so as to
make them visually attractive. Especially, the bank needs to design unique and fresh banners
in promotion programs to advertise the ATM service directly and lively.
 The bank should Plan ahead for peak cash usage time like holidays and weekends, and stock
well ATMs with cash.
 Customers must be informed after each transaction is done on ATM
 The bank ATM card issuing staff should be professional and equipped with soft skills i.e.
Communication skills.
 The bank should strengthen its call center by giving various training to employees and
monitoring their performance every day so as to make them more responsive to customers
any time.
 Last but not least, the bank should pay attention to mitigate the problems of network,
reduction in balance without cash payment, Cards get blocked or jammed, ATM location
inconvenience, ATM machines dispense poor cash notes.

5.4 Recommendations for future research

 This study used SERVEPERF model to assess the impact of ATM service quality on
customer satisfaction. Nevertheless, future research may use SERVQUAL model.
 The sample for this study was selected from ATM users of WB in Dire Dawa branch.
However, future research can use larger sample size so as to increase the scope to cover
customers from other cities of Ethiopia and generalize the results of the findings to the
general population.
 This study examined the impacts of ATM service quality dimensions on customer
satisfaction. Besides, future research can examine the impacts of demographic variables

45
 (gender, age classification, education, etc.) on customers’ satisfaction.

REFERENCES

Aaron, T., & Robin, S. (2010). FESTPERF: A Service Quality Measurement Scale for Festivals.
Event Management, 14(1), 69-82.

Adimasu Woldesenbet. (2018). “Impacts of ATM Services on the Customer Saving/Withdrawal

Rate in CBE, Akaki Branch,” Journal of Accounting & Marketing. Vol.7, issue 3.

Almossawi M (2001). Bank selection criteria employed by college students in Bahrain: an

empirical analysis. Int. J. Bank. Mark. 19(3): 115-12an empirical test of an integrative model.
Journal of Service Marketing,16(4), 363- 379.

Anderson, C and Zeithaml, C P (1984). ―Stage of the Product Life Cycle, Business Strategy, and
Business Performance,‖ Academy of Management Journal, 27 (March), 5-24.

Anderson, E W, Fornell, C and Lehmann, D R (1994). ―Customer Satisfaction, Market Share and
Profitability: Findings from Sweden,‖ Journal of Marketing, 58(3), 53-66.Automated Teller
Machine in Adigrat, Ethiopia

Areeba Toor, Mudassir Hunain, Talha Hussain, Shoaib Ali & Adnan Shahid (2016). The Impact
of E-Banking on Customer Satisfaction: Evidence from Banking Sector of Pakistan. (P. S.
Mudassir Husnain, Ed.) Journal of Business Administration Research, 5(2), 27-40.

Babakus, E and Boller, G W (1992). “An Empirical Assessment of the SERVQUAL Scale,”
Journal of Business Research, 253-268

Balogun, O.J., Ajiboye, F.A. &Dunsin, A.T. (2013).An Investigative Study on Factors
Influencing the Customer Satisfaction with E-Banking in Nigeria.International Journal of
Academic Research in Economics and Management Sciences, 2(6) Pp. 64-73.

Boulding,W.,Kalra,A,Staelin,Rand Zeithaml,VA(1993).A Dynamic Process Model of Service

Business Management. Vol.8(7), pp. 218-227 Business Research, 24(3), 253-68

46
Brady, K., & Robertson, J. (2001). Searching for a consensus on the antecedent role of
service quality and satisfaction: an exploratory cross-national study. Journal of Business
Research , 51(1), 53-60.

Bryman, A. & Bell, E. (2007).Research Designs. In: Business Research Methods. New York.
Oxford University Press. P. 44-7

Buzzell, R D and Gale, B T (1987). The PIMS Principles, New York: The Free Press.

Carman, J. M. (1990). Consumer perceptions of Service Quality: An assessment of the

SERVQUAL dimensions. Journal of Retailing, 66(1), 33-55.

Charles Mwatsika (2014). Customers’ satisfaction with ATM banking in Malawi. African
Journals of Business Management, 8(7), 218- 227.

Collart, D. (2000), Customers Relationship management, price water house cooper, New York,
USA

Creswell, J. W. (2012). Qualitative Inquiry and Research design: Choosing among Five
Approaches (4th ed.). Thousand Oaks CA: Sage.

Cronin JJ, Taylor SA (1992). Measuring service quality: a reexamination and extension. J.
Market.

Crosby, P B (1984) Paper presented to the “Bureau de Commerce,” Montreal, Canada Customer
Satisfaction in Pakistani Banks. European Journal of Social Sciences, 13 (3): 333-344.

Dilijonas, D., Krikšciunien, D., Sakalauskas, V., & Simutis, R., (2009). Sustainability Based
Service

Eiglier, P and Langeard, E (1987).Service satisfaction, Le Marketing des Services,

Paris:McGraw-Hill.

47
Eskedar Abebe. (2018). Effect of ATM service quality on customer satisfaction in United Bank
Adiss Ababa branches. MBA Thesis. St Mary University. Ethiopia

Fishbein M, Ajzen I (1975). Belief, Attitude, Intention and Behavior: An Introduction to Theory
and research. Addison-Wesley, Reading, Massachusetts

Fornell, C. (1992). A National Customer Satisfaction Barometer: The Swedish Experience.

Journal of Marketing, 56 (January), 6-21

Gardachew W. (2010). “Electronic banking in Ethiopia –Practice, opportunities and challenges”

Garvin, D A (1983).Quality on the Line, Harvard Business Review, 61(September- October),

65-73.

George, D., & Mallery, P. (2003). SPSS for Windows step by step: A simple guide and
reference. 11.0 update (4th ed.). Boston: Allyn & Bacon.

Grönroos, C. (2001).The perceived service quality concept-a mistake? Managing service quality,
Vol.11 no.3 pp. 150-152

Habte Ashnafi. (2019). Effect of ATM Service Quality on Customer Satisfaction in Banking
Industry in Ethiopia: in case of Oromia International Bank, Addis Ababa. MBA Thesis. Addis
Ababa University. Ethiopia

Halstead, D., Hartman, D., & Schmidt, S. L. (1994). Multisource Effects on the Satisfaction
formation Process. Journal of the Academy of Marketing Science, 22, 114-129.

Hana Settargachew, (2017).Assessment of ATM service quality of Commercial Bank of

Ethiopia in Addis Ababa. MBA Thesis. St Mary University. Ethiopia

Hena, Zenebe, (2019).The Effect of ATM Service Quality on Customer Satisfaction: in case of
Wegagen Bank S.C, Addis Ababa. MBA Thesis. St Mary University. Ethiopia

Hudson, S.; Hudson, P.; Miller, G. A. (2004). The measurement of service quality in the tour
operating sector: a methodological comparison, Journal of Travel Research 42(3): 305–312

48
Idowu, A., & Oluwaseun, S. (2015). An emperical study of automated teller machine service
quality on customer satisfaction . International Journal of Scientific research in Information
Systems and Engineering, 1(1).

Islam. R., Kumar, S., Biswas, P. K., (2007). Customer Satisfaction of ATM Service: A Case
Study.

Jabnoun, N., Al-Tamimi, H.A.H., (2003). Measuring perceived service quality at UAE
commercial banks. Int. J. Qual. Reliab. Manag. 20 (4), 458–472.

Jane, K., (2000). Bricks or Clicks? Consumers’ Adoption of Electronic Banking Technologies”,
Consumers Interests Annual Journal of Business Administration and Management Science
research Vol.1(1), pp. 001-009.

Juan and Gupta (2004). Measuring Service Quality: SERVQUAL Vs. SERVPERF Scales
Vikalpa• Volume 29 • No 2 • April - June 2004

Jun, M., & Cai, S. (2010). Examining the Relationship between internal service quality and its
dimensions, and internal customer satisfaction. Total Quality Management, 21(2), 205-223.

Juran, J M (1988). Juran on Planning for Quality. New York: The Free Press.

Kanojia, Deepti&Yadav, Dr D.R.(2012), “Customer Satisfaction In Commercial Banks –A Case

Study of Punjab National Bank” Int. J. Trade and Commerce- IIARTC, Vol. 1, No. 1, pp. 90-99.

Khan, M.A. (2010). An Empirical Study of Automated Teller Machine Service Quality and

Kothari, R. (2004). Research Methodology, Methods and Techniques. New Delhi: New Age
International.

Kotler, P., & Armstrong, G. (2006). Principles of Marketing (11th ed.). New Jersey: Pearson-
Prentice Hall.

49
Kumbhar, VM. (2011).Factors affecting on Customer Satisfaction, an Empirical Investigation of
ATM Service. International Journal of Business Economics and Management Research:
International journal of scientific & technology research

Lemma, Belaye. & Biruke Kindie, (2016) “The Effect of ATM Service Quality on Customer
Satisfaction: Evidences from Customers of Ethiopian Commercial Banks in Debremarkos
Town,” European Journal of Business and Management. Vol.9, No.7.

Lianxi, Z. (2004). A dimension-specific analysis of performance-only measurement of service

London: Printice Hall Publishing.

Morgan, G., Leech, N., Gloeckner, G., & Barrett, K. (2004). SPSS for Introductory Statistics

Normann, R (1984). Service Management, New York: Wiley.

Osborne and Waters (2002). Four assumptions of multiple regression that researcher should
always test. Practical Assessment, Research & Evaluation, 8(2).

Parasuraman, A., V. Zenithal, and Berry, L.L. (1985) A conceptual model of service quality

Parasuraman, P., Zeithaml, V.A &. Berry, L.L. (1988).” SERVQUAL: A multiple-item scale for
measuring service quality.”

Phan, C.A. & Nham , P.T. (2015).”Impact of service quality on customer satisfaction of ATM
service: Case study of a private commercial joint stock Bank in Vietnam”, Business: Theory and
Practice, 16(3): 280-289.

Philip, K. and K. Keller.(2006). Marketing management. Twelfth edition, Pearson Education,

Phong Nham, Chi Phan(2015).The Impact of service quality on customer satisfaction of

automated teller Practice Volume 3, Issue 2/ June 2011.

Rust, R T and Oliver, R L (1994). Service Quality — New Directions in Theory and Practice,

50
Ruyter, K., Bloemer, J., & Pascal, P. (1997). Merging service quality and service satisfaction in
China's retail banking, Journal of Services Marketing 18(7).satisfaction in private banking,"
Journal of Service Marketing, Vol. 14, No. 3, 2000, pp. 244-271.

Saundera, M. N., Lewis, P., & Thornhill, A. (2003). Research for Business Studies (2nd ed.).

Selam Tsehaye. (2018). Assessment of ATM service quality and customer satisfaction: in case
of Commercial Bank of Ethiopia, Addis Ababa. MBA Thesis. St Mary University. Ethiopia

Shaw, J (1978). The Quality - Productivity Connection, New York: Van Nostrand

Spreng, R. A., & Mackoy, R. D. (1996). An emperical examination of a model of perceived

service quality and satisfaction. Journal of retailing, 72(2), 201-214.

Stevens, J.P. (2009). Applied multivariate statistics for the social sciences (5th ed.). New York:
Routledge.

Sureshchandar, G.S., Rajendran, C., Anantharaman, R.N., (2002). The relationship between
service quality and customer satisfaction–a factor specific approach. J. Serv. Market.

Tabachnick, B. & Fidell, L. (2006). Cleaning up your act screening data prior to analysis. Using
multivariate analysis (5th ed.).

Tse, David K. and Peter, C. Wilton; 1988, ―Models of Consumer Satisfaction: An

Extension‖;Journal of Marketing Research; 25 204-212

Welkowitz, J., Cohen, B., & Ewen, R. (2006). Introductory Statistics for the Behavioral Sciences
(6th ed.). New Jersey: John Wiley & Sons,Inc.

Westbrook, R., & Oliver, R. (1981). Developing better measures of consumer satisfaction: Some
preliminary results. (K. Monroe, Ed.) Advances in Consumer Research, 8, 94- 99.

Yamane, T. (1967). Statistics, an Introductory Analysis (2nd ed.). New York: Harper and Row.

51
Yared Yehuwalasht. (2018).An Assessment of ATM Service Quality and Customer Satisfaction:
in case of Lion International Bank S.C, Addis Ababa Branch. MBA Thesis. St Mary University.
Ethiopia

Yidnekachew Girma. (2019). The influence of Service Quality on Customer Satisfaction: the
case of ATM service in CBE Addis Ababa. MBA Thesis. Addis Ababa University. Ethiopia

Zeithaml, V., Berry, L., & Parasuraman, A. (2006). The Behavioral Consequences of Service
Quality. Journal of Marketing, 60(2), 31-46.

Zhou, L. 2004. A dimension-specific analysis of performance only measurement of service

quality and satisfaction in China's retail banking, Journal of Services Marketing 18(7).

52
 Appendix

Department of Master of Business Administration

Questionnaire for ATM card holders of Wegagen bank Dire Dawa branch

Dear Respondents,
I am post graduate student of ADDIS ABABA MEDICAL AND BUSINESS COLLEGE in
General Management department. This questionnaire is used as for gathering information on
how you feel about quality service of ATM in WB Dire Dawa branch. Your response is essential
to my thesis work, so I kindly request you to fill it out carefully and genuinely.
Thank you for your valuable response and co-operation.

PART – I: PERSONAL INFORMATION

INSTRUCTION: Please put tick mark (√) and choose only one option.

1. Gender Male Female

2. Age 18-25years 31- 40 years Above 50 years
26-30years 41- 50 years
3. Educational Level
Certificate Degree PhD and above
Diploma Masters

4. Monthly Income level (in Birr)

Below 1,000 from 3,001- 5,000 Greater than 10,000

From 1,001-3,000 from 5,001- 10,000

5. ATM use status

From 1 year- 5 years from 11 years- 15 years above 20 years

From 6 years- 10 years from 16 years- 20 years

53
PART- II: SERVICE QUALITY AND CUSTOMER SATISFACTION

For each of the following please indicate to what extent you agree
5= strongly agree 4= Agree 3= Neutral 2= Disagree 1= strongly disagree
Please choose only one option that suits your level of agreement or disagreement for each of the
following statements (put tick mark (√) in the appropriate box)

Tangibility Dimension

No Items 1 2 3 4 5

1 ATM card has good appearance and suitable size.

2 The screen of ATM always displays clearly.

3 There is always instruction signboards at the place

ATM installed which is easy for customers to
identify.
4 Materials and equipment associated with ATM
service are visually appealing.
Reliability Dimension

No Items 1 2 3 4 5

5 WB commits to provide customers all the ATM

services (withdrawals, account management,
money transaction etc) in accordance with the
terms specified in the signed contract.
6 Any clients ‘questions, complaints or concerns
about ATM card service are satisfactorily resolved
by WB.
7 Customers are informed after every transaction
done on ATM.
8 ATM carries out exactly what customers required.

9 Customers received ATM card at the time

committed by WB.
Responsiveness Dimension

No Items 1 2 3 4 5

54
10 WB staff is willing to answer any questions or
concern of customers.
11 WB staff is not willing to help customers solving
their problems or concerns.
12 WB does not heartedly serve customers in peak
hours.
13 ATMs are installed at places which are convenient
for customers to make transactions.
14 ATM always provides enough cash for customers
to withdraw on special occasions or holidays.
Assurance Dimension

No Items 1 2 3 4 5

15 ATM card issuing staff always clearly gets

information about cards and polices while
consulting with customers.
16 ATM card issuing staff has a clear and
understandable explanation to customers.
17 Customers feel safety when they make any
transaction on ATM.
18 WB staff is always gentle and polite.

19 Customers put more and more trust and confidence

in ATM staff after each transaction.
Empathy Dimension

No Items 1 2 3 4 5

20 WB always spends a lot of time to understand the

concerns of customers.
21 WB always takes care for each and every individual
customer.
22 Provision of caring and individualized attention to
customers provided by call center is available in
time of request.
Overall Customer Satisfaction

No Items 1 2 3 4 5

55
23 I am totally satisfied with the overall ATM service
quality of WB.

PART- III OPEN-ENDED QUESTIONS

Which of the following problems that you encounter most of the time while you use ATM

Service in Wegagen Bank ?

Network Problem

Reduction in balance without cash payment

Cards get blocked or jammed

ATM location inconvenience

ATM machines dispense poor cash notes

56
57