See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/321623369

A Study on Services Quality in ATM Services in Public Sector Banks in

Kanchipuram Town

Article  in  International Journal of Economic Research · January 2017

CITATIONS READS

2 6,520

6 authors, including:

V. Rengarajan S. Srinivasan
SASTRA University Sri Sankara Arts and Science College
30 PUBLICATIONS   23 CITATIONS    4 PUBLICATIONS   5 CITATIONS   

SEE PROFILE SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Customer Perception View project

Servqual and Structural equation modeling View project

All content following this page was uploaded by S. Srinivasan on 07 December 2017.

The user has requested enhancement of the downloaded file.

 International Journal of Economic Research

ISSN : 0972-9380

available at http: www.serialsjournal.com

„ Serials Publications Pvt. Ltd.

Volume 14  •  Number 3  •  2017

A Study on Services Quality in ATM Services in Public Sector Banks

in Kanchipuram Town
M. Sivakumar1, V. Rengarajan2, V. Vijay Anand3, S. Srinivasan4, M. Kalayanasundaram5
and G.R. Saravanakumar6
1,4
Faculty Member, Sri Sankara Arts & Science College, Kancheepuram
2,3
Faculty Members, School of Management, SASTRA University, Thanjavur
5
Faculty Member, Urumu Dhanalakshmi College (UDC), Trichy
6
MBA Student, School of Management, SASTRA University, Thanjavur

Abstract
The aim of this paper was to examine the Services Quality in ATM services provided by selected public sector
banks in Kanchipuram town. For this investigation primary data was collected from 500 respondents through
a structured questionnaire. It also includes the review of the various services provided by the five banks under
the study. Collected data was analyzed according to the objectives of the present research and result of the
statistical analysis to compile the result. Hence it is suggested that banks should proactively monitor customers’
preferences with regard to the transaction fee; delivering of ATM card promptly and issue of new cards due
to loss of original cards in order to retain their customers.
Keywords: ATM, Services Quality, Problems, Banks.

1. Introduction
There have been tremendous growth and diversification in banking activities over the last one-and-a-half
decades. Development of a sound and adequate information system has become a necessity to meet the
challenges of growth and diversification. The Banking Commission and the Reserve Bank of India have
appointed various committees from time to time. At the time of manual transactions, an account holder
had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Now, for
banking transactions customers are no longer prepared to wait for information or services. So as per the
increasing need of IT, Banks have now started to provide a wide variety of delivery channels like ATM. All
401 International Journal of Economic Research
 M. Sivakumar, V. Rengarajan, V. Vijay Anand, S. Srinivasan, M. Kalayanasundaram and G.R. Saravanakumar

the banks have numerous branches and automated teller machine (ATM) locations throughout a multi-state
area that provide banking services.
Technology has been one of the most important factors for the development of mankind. Information
and communication technology is the major advent in the field of the technology which is used for access,
process, storage and dissemination of information electronically. Banking industry is fast growing with the
use of technology. In the last few decades, information technologies have changed the banking industry
and have provided a way for the banks to offer differentiated products and services to their customers.
ATM means neither “avoids travelling with money” nor “any time money”, but certainly implies
both. Slim ATM cards are fast replacing confounding withdrawal forms as a convenient way of getting
your money from banks. In a way, they are rewriting the rules of financial transaction. A smart person no
longer needs to carry a wallet-full of paper money on his person. All he needs to do is fish out an ATM
(automated teller machine) card, insert it in the slot, punch in a few details and go home with hard cash.

2. OBJECTIVES OF THE STUDY

The paper aims to examine the scenario of ATM in five major public sector banks. In this broader framework,
an attempt is made to achieve the following specific objectives:
(a) The analyze the present Quality of services provided by SBI, Canara Bank, Punjab National
Bank, and Indian Bank, Bank of Baroda using SERVQUAL.
(b) To examine the important dimensions of ATM services quality.
(c) To offer suggestions to improve ATM services of banks.

3. SCOPE OF THE STUDY

This study is much helpful to Banking industry for enhancing the Services Quality by adopting strategies
which serves the purpose. An analysis of study proves useful, as the banks efforts are directed to attract
and retain customers by offering them a basket of tailor made schemes supported by a state of the art
distribution system the automated teller machines.

4. REVIEW OF LITERATURE
In order to have better understanding about the present study in its proper perspective, the researcher has
undertaken to present the corresponding studies through review of what has already been done in the field.
Mohammed, Shariq (2012) identified the factors affecting the customers demand for ATM services,
by analyzing sample of 450 consumers’ response who have been interviewed personally through structured
survey in 3 district of Uttar Pradesh India. The results indicated that graduate and employed male customers
who belong from higher income groups and having a bank account preferably in public sector bank are
greatly emphasized to use of the banking services. Significant positive influence of the characterized socio-
economic attributes on the use of ATM service was found.
Dr. K. Shoba (2012) investigated the satisfaction levels of ATM cardholders with respect to various
aspects of the service quality of ATM. This study provides information regarding the satisfaction level and
problems faced while using ATM cards.
International Journal of Economic Research 402
 A Study on Services Quality in ATM Services in Public Sector Banks in Kanchipuram Town

Mohammed-Aminu sanda (July 2011) explained the issue of whether the use of the Automated
Teller Machines (ATM) as a service delivery tool in the banking industry of many developing countries has
achieved its intended objective of increasing the effectiveness of customer service provision and reducing
the workload of bank tellers. The findings revealed that though most bank customers who use the ATM
services perceive the ATM as a convenient, reliable, accurate and suitable service delivery tool for their
banking transactions.
To increase the diffusion of ATMs, it was recommended that banks should ensure enhanced salience
of ATM to customers’ needs, greater compatibility of ATM to customers banking norms and lifestyle,
less complex and easy to use system and opportunity for adopters to experiment with the system before
using ATM’s.

5. Research Methodology
Research Methodology is the way of systematically solving the research problem. It is a science of studying
how research is conducted. The research methodology enlightens the methods to be followed in research
activities starting from investigation to presentation. The methodology used for analyzing the service Quality
of Banks in Kanchipuram Town is presented in this part of the research.

Hypothesis
1. Perceived Tangibility positively influences informing about the quality to others, Recommend
to others and Visit again.
2. Perceived Assurance positively influences informing about the quality to others, Recommend
to others and Visit again.
3. Perceived Reliability positively influences informing about the quality to others, Recommend to
others and Visit again.
4. Perceived Empathy positively influences informing about the quality to others, Recommend to
others and Visit again.
5. Perceived Responsiveness positively influences informing about the quality to others, Recommend
to others and Visit again.

Research Design of the Study

The present study is descriptive in nature as the study describes the characteristics of service quality in banking
industry. It is also marked by the prior formulation of specific hypothesis. It is a pre planned and structured
design. The tools used to collect the data are pre-structured questionnaire and interview schedule.

External Service Quality

The SERVQUAL measurement model (Parasuraman et. al., 1988) is based on the five dimensional model
of Service Quality. Reliability refers to delivering on promises, Responsiveness means being willing to help
the customer, Assurance refers to inspiring trust and confidence in customers by the employees of the
service provider, Empathy means treating customers individually while Tangible represent the physical
aspects of service.
403 International Journal of Economic Research
 M. Sivakumar, V. Rengarajan, V. Vijay Anand, S. Srinivasan, M. Kalayanasundaram and G.R. Saravanakumar

Sampling Framework
In Kanchipuram district, there are 20 Public Sector Banks. The Public Sector Banks consist of State Bank of
India, Canara Bank, Punjab National Bank, Indian Bank, and Bank of Baroda are given much significance
for the study purpose. Therefore these five banks of Kancheepuram Town were taken and every branch
of these banks was considered as the strata and 20 samples were collected from each stratum. By applying
stratified random sampling, 20 samples from each branch of the bank have been selected for this study
that comes around 500 samples in total.

6. DATA COLLECTION AND METHODOLOGY

In order to examine the customer satisfaction and the factors influencing the choice of ATM services, a
survey was conducted. For this purpose a structured questionnaire was prepared which consists of several
questions that dealt with various aspects of demographic variables, factors that influence the customers
to choose the ATM services and the parameters that signify the customer satisfaction. The sample unit
consists of 500 samples in lump sum from each bank as respondents.
There are so many banks providing ATM services in Kanchipuram. The researcher concentrates only
on Public Sector banks which have been Selected for the study in Kanchipuram town.
Table 1
Sampling Framework
No. of Customers Chosen
S.NO Bank Name No.of.outlets No. of Customers
from Each Branch
1 SBI & Associates 10 20 200
2 Canara Bank 3 20 60
3 Indian Bank 5 20 100
4 Punjab National Bank 4 20 80
5 Bank of Baroda 3 20 60
Total 25 20 500
To test the reliability and the validity of the variables given in the questionnaires, pilot study is done
with 20% of the sample size, that is 100 respondents have been chosen for the pilot study.

Factor Analysis
The factor analysis is a multivariate method to identify the underlying factors among a large number of
interdependent variables. It seeks to extract common factor variances from a given set of observations.
It splits a number of attributes or variables into a smaller group of uncorrected factors. It is called as the
narration analysis. In the present study, the factor analysis has been used to narrate the data related to
many aspects into meaningful factors for further analysis. In the present study, the factor analysis is used
to narrate the data related to
∑ Variables in External Service Quality
∑ Variables leading us to Customer Satisfaction
∑ Management Commitment to Internal Service Quality and
∑ Antecedents of internal Service Quality

International Journal of Economic Research 404

 A Study on Services Quality in ATM Services in Public Sector Banks in Kanchipuram Town

Customers’ Profile and Service Quality Analysis Based on Customers’ Expectations and Perceptions
The present chapter deals with the results of the primary collected with regard to the service quality dimension
of the Banks with specific objectives. In this section deals with the profile of the customers, and then deals
with the personality of the customers, finally identifies the service quality factors in banks and SERVQUAL
Score with regard to expectations and perceptions of customers is dealt in the fourth section.

Table 2
Profile of the Customers
Age Frequency Percent
Less than 25 71 14.2
26-30 95 19.0
31-35 131 26.2
36-40 67 13.4
41-45 58 11.6
More than 45 78 15.6
Total 500 100.0
Gender Frequency Percent
Male 254 50.8
Female 246 49.2
Total 500 100.0
Educational Background Frequency Percent
UG 82 16.4
PG 226 45.2
Professional 140 28.0
Others 52 10.4
Total 500 100.0
Nature of Occupation Frequency Percent
Government Employees 155 31.0
Private 97 19.4
Business and Trade 88 17.6
Students 56 11.2
Others 104 20.8
Total 500 100.0
Monthly income Frequency Percent
Less than 10,000 106 21.2
10,001 - 15,000 217 43.4
more than 15,001 155 31.0
Not applicable 22 4.4
Total 500 100.0

405 International Journal of Economic Research

 M. Sivakumar, V. Rengarajan, V. Vijay Anand, S. Srinivasan, M. Kalayanasundaram and G.R. Saravanakumar

Accounts in Number of Banks Frequency Percent

One 169 33.8
More than one 331 66.2
Total 500 100.0
Regular Usage of ATM Frequency Percent
Private Banks 282 56.4
Nationalazied Banks 151 30.2
Both 67 13.4
Total 500 100.0
Source: Primary data

Since the sex of the customers has its own impact on the level of estimation and perception on the
service quality of banks, it is included as one of the profile variables. The nature of estimation and perception
on the bank’s services may completely differ from male to female.
The first two major age groups among the customers in the present study are less than 25 years and
25 —40 years, constitute 26.2 and 59.4 per cent to the total.
The level of education provides more awareness of banking to the customers and exposure on the
present Banking experience in years. The educated customers may have more awareness and exposure on
these aspects in general. Hence, the comparative analysis may have its impact on perception of the services
offered by the banks. So, the level of education is included as one of the profile variables in the present
study. It is confined to schooling, graduation and post graduation.
The important level of education among the customers is graduation and post graduation, which
constitute 45.2 and 61.6 percent to the total respectively.
A maximum of 17.6 percent of the customers, belong to business group. It is followed by private
employee and Government employees, which constitute 31.00 respectively. In the first two important
17.6 occupations are Government employee and private employee who constitute 31 percent to its total
respectively.
In the present study, the monthly income among the customers is confined to below `10000, `10000
- 20000, `20000 - `30000 and above `30000. the distribution of customers on the basis of their monthly
income is illustrated. In the present study, the nature of customers is confined to individual, businessman,
corporate and Govt. office. The nature of the customers is given in table.
In order to find the relationship between the Educational background of the respondents and Regular
usage of account, a chi-square test was used and result of the test is shown below.
It is noted from the above table that the ‘p’; value is less than 0.05 the result is significant at 5% level.
From the analysis it is concluded that there is close relationship between Educational background of the
respondents and Regular usage of account. So, eventually Null hypothesis rejected, alternative hypothesis
accepted.

International Journal of Economic Research 406

 A Study on Services Quality in ATM Services in Public Sector Banks in Kanchipuram Town

Table 3
Level of Educational Background and Regular usage of ATM
Regular Usage of ATM
Total
Private Banks Nationalized Banks Both
Educational background UG 42 21 19 82
PG 135 62 29 226
Professional 73 53 14 140
Others 32 15 5 52
Total 282 151 67 500

Table 4
Nature of Educational Background and Regular usage of Account – Chi-Square Test
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 13.083a 6 .042

In order to find the relationship between the Type of bank of the respondents and Level of economic
motivation, a chi-square test is used and result of the test is shown.

Table 5
Level of Monthly Income and Accounts in Number of Banks
Accounts in Number of Banks
Total
One More than one
Monthly income Less than 10,000 31 75 106
10,001 - 15,000 69 148 217
More than 15,001 67 88 155
Not applicable 2 20 22
Total 169 331 500

Table 6
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 13.529a 3 .004

It is noted from the above table that the ‘p’, value is less than 0.05 the result is significant at 5%
level. From the analysis it is concluded that there is close relationship between Monthly income of the
respondents and Number of accounts in the banks. So, eventually Null hypothesis rejected, alternative
hypothesis accepted.

7. FACTOR ANALYSIS
Before conducting factor analysis, the validity of data for factor analysis has been conducted with the help
of KMO measures and Bartlett’s test of Sphericity. The Kaiser Meyer Olkin (KMO) measure is indicator of
how well suited the sample data are for factor analysis. It is the ratio of the sum of the squared correlations

407 International Journal of Economic Research

 M. Sivakumar, V. Rengarajan, V. Vijay Anand, S. Srinivasan, M. Kalayanasundaram and G.R. Saravanakumar

for all variables in the analysis to the squared correlations of all variables plus the sum of the squared partial
correlations for all variables. The denominator of this ratio increases with variation that is unique to pairs
of variables (partial correlations), making the value of KMO less than one. Small values of KMO indicate
that factor analysis may not be appropriate for the data. Kaiser (1974) suggests that values of .9 or higher
are great and values below 5 are unacceptable. The computed KMO measures and chi-square value from
table satisfy the validity of data for factor analysis. The factor analysis results in important service quality
factors.

Table 7
KMO and Bartlett’s Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .820
Bartlett’s Test of Sphericity Approx. Chi-Square 11772.687
df 231
Sig. .000

Figure 1: CFA for Perceived Service Quality

International Journal of Economic Research 408

 A Study on Services Quality in ATM Services in Public Sector Banks in Kanchipuram Town

Table 8
Model fit for CFA
Fit Statistics Recommended Obtained Value
GFI >0.9 0.959
AGFI >0.9 0.947
NFI >0.9 0.978
CFI >0.9 0.995
TLI >0.9 0.994
Pclose >0.9 1
RMSEA <0.05 0.024

The above table shows the Model fit for CFA Model, Goodness of fit index (GFI) is at 0.959 against
the recommended value of greater than 0.9, Adjusted goodness of fit index (AGFI) is at 0.947 against
the threshold value of >0.9, Normal Fit Index (NFI) value is 0.978 against the threshold value of >0.9,
Comparative Fit Index value (CFI) is 0.995 against the recommended value of >0.9, P Close is also over
the threshold value and Root Mean Square Error of Approximation (RMSEA) is Well below 0.05. The
above values indicate good absolute fit of the model.

Figure 2: Full SEM for Perceived Service Quality and Loyalty Dimensions
409 International Journal of Economic Research
 M. Sivakumar, V. Rengarajan, V. Vijay Anand, S. Srinivasan, M. Kalayanasundaram and G.R. Saravanakumar

Table 9
Model fit for Structural Model
Fit Statistics Recommended Obtained Value
GFI >0.9 0.954
AGFI >0.9 0.94
NFI >0.9 0.974
CFI >0.9 0.994
TLI >0.9 0.993
P close >0.9 1
RMSEA <0.05 0.023

The above table shows the Model fit for SEM Model, GFI is at 0.954 against the recommended value of
greater than 0.9, AGFI is at 0.94 against the threshold value of >0.9, NFI value is 0.974 against the threshold
value of >0.9, CFI value is 0.994 against the recommended value of >0.9, PClose is also over the threshold
value and RMSEA is Well below 0.05. The above values indicate good absolute fit of the model.

Table 10
Estimate S.E. C.R. P Hypothesis
Inform Others<---Perceived_Assurance 0.25583 0.0388 6.59397 *** Reject Null Hypothesis
Inform Others<---Perceived_Empathy 0.22554 0.0402 5.60853 *** Reject Null Hypothesis
Inform Others<---Perceived_Reliability 0.2322 0.0403 5.76025 *** Reject Null Hypothesis
Inform Others<---Perceived_Responsiveness 0.27897 0.0572 4.87332 *** Reject Null Hypothesis
Inform Others<---Perceived_Tangibility 0.1893 0.0402 4.70598 *** Reject Null Hypothesis
Recommend to Others<---Perceived_Assurance –0.0538 0.0374 –1.4399 0.1499 Retain Null Hypothesis
Recommend to Others<---Perceived_Empathy 0.40233 0.0402 10.0217 *** Reject Null Hypothesis
Recommend to Others<---Perceived_Reliability 0.3438 0.0398 8.63371 *** Reject Null Hypothesis
Recommend to Others<---Perceived_Responsiveness 0.58076 0.058 10.0146 *** Reject Null Hypothesis
Recommend to Others<---Perceived_Tangibility 0.00159 0.039 0.04083 0.9674 Retain Null Hypothesis
Visit Again<---Perceived_Assurance 0.29882 0.0389 7.68824 *** Reject Null Hypothesis
Visit Again<---Perceived_Empathy 0.34113 0.0406 8.40179 *** Reject Null Hypothesis
Visit Again<---Perceived_Reliability 0.331 0.0406 8.1564 *** Reject Null Hypothesis
Visit Again<---Perceived_Responsiveness 0.40511 0.0578 7.01449 *** Reject Null Hypothesis
Visit Again<---Perceived_Tangibility 0.01921 0.0398 0.48218 0.6297 Retain Null Hypothesis

The above table shows the hypothesis testing, only 3 null hypothesis is accepted namely, Perceived
tangibility does not positively influences the Visiting again, Perceived Tangibility does not positively
influences recommending the services to others and Perceived Assurance does not positively influences
recommending the services to others.
Other null hypothesis are rejected signifies the positive influence of Tangibility, Reliability, Empathy,
Assurance and Responsiveness on recommending the services to others, Visiting again and Inform the
quality of services to others.

International Journal of Economic Research 410

 A Study on Services Quality in ATM Services in Public Sector Banks in Kanchipuram Town

8. Findings
∑ From the demographic profile it is found out that sex of the customers has its own impact on
the level of estimation and perception on the service quality of banks, it is included as one of the
profile variables. The nature of estimation and perception on the bank’s services may completely
differ from male to female.
∑ The first two major age groups among the customers in the present study are less than 25 years
and 25–40 years, constitute 26.2 and 59.4 per cent to the total.
∑ Testing of chi-square confirmed there is close relationship between Educational background of
the respondents and Regular usage of account. So, eventually Null hypothesis rejected, alternative
hypothesis accepted.
∑ From the analysis it is concluded that there is close relationship between Educational background
of the respondents and Regular usage of account. So, eventually Null hypothesis rejected,
alternative hypothesis accepted.
∑ From the hypothesis confirmed testing, only 3 null hypothesis is accepted namely, Perceived
tangibility does not positively influences the Visiting again, Perceived Tangibility does not
positively influences recommending the services to others and Perceived Assurance does not
positively influences recommending the services to others.

9. Conclusion
The study provides necessary input to the bank management to increase customer satisfaction through
improving ATM service quality. Banks must constantly up-date and differentiate the ATM service quality
dimensions from other banks to ensure continuous satisfaction and retention if customers, and optimize
their limited resources, immediate response to customers’ needs and queries about the ATM related services
are important to improve the quality service. This would in turn lead to customer satisfaction.

References
A.J.Joshua, PhD, Moli P Koshy, PhD, usage Patterns of Electronic Banking Services by Urban, Educated Customers:
Glimpes from India, Journal of Internet Banking and Commerce, April 2011, Vol. 16, No. 1, (http://www.arraydev.
com/commerce/jibc/)
Balasubrahmanyam Annam, Narashimha rao Yallapragada Understaning Customer Attitudes towards TECHNOLOGY-
BASED SELF-SERVICE, International Masters in service management Research (IMSM-R) programme, Economics
Department, Karlsted University during term 2004-2005.
Dr.V P Gulati, Director of Institute for Development of Research in Banking Technology (IDRBT), Professtional Banker,
August 2004).
N.Sakthivel, “Customer’s perception of ATM services, Professional banker”, March 2006.
V.Alagu Pandian, R.K.Sharma, A study of customers Attitude Towards ATM Services of Banks.
Stevens, R.Martin, R.Carter, P. & Cogshell, D.(1986). A comparative Analysis of users and Non-Automatic Teller Machines.
Journal of Retail Banking, 8(½), 71-78.
Ulengin, Burc. 1998. Using hierarchical information integration to examine customer preferences in banking.
411 International Journal of Economic Research
 M. Sivakumar, V. Rengarajan, V. Vijay Anand, S. Srinivasan, M. Kalayanasundaram and G.R. Saravanakumar

Mr.Ajau Bimbhit, “Technology led customer services”, Professional banker, The ICFAI University press, may, 2008,
pg.53.
Mohammed, Shariq. 2012, Factors affecting ATM usage in India: AN empirical analysis. UTMS Journal of Economics
3(1): 1-7.
Rugimbana, R. & Iverson, P. (1994). Perceived Attributes of ATMs and their Marketing Implications. International journal
of Bank Marketing, 12(2), 30-35.

International Journal of Economic Research 412

View publication stats