Effect of Automated Teller Machines Usage on Operational Performance of Commercial Banks in Nakuru County, Kenya

Hussein Mohamed Abdullai

doi:10.11648/j.ijefm.20170503.14

Abstract

The aim of this paper was to determine the effect of Automated Teller Machines usage on operational performance of commercial banks in Nakuru County, Kenya. The study was guided by the research objective: to establish the effect of automated teller machines (ATMs) usage on operational performance of commercial banks in Nakuru County, Kenya.The study employed the following theories namely: Diffusion of Innovation and The Theory of Reasoned Action. The study adopted a correlational-cross-sectional research design. The study population comprised 56 employees of the 28 commercial banks. There are 31 commercial banks branches in Nakuru County, Kenya with Kenya Commercial Bank, Co-operative Bank and Equity bank having 3, 2 and 3 branches respectively which makes a total of 31 commercial banks out of which the researcher, through a simple random sampling, chose 28. Data was collected using structured questionnaires. A pilot study was conducted in Eldoret Town, Uashin Gishu County to determine validity of the research instruments where Cronbach’s alpha coefficient was employed. For the purpose of determining the effect of ATMs usage on operational performance, correlation and regression analysis were carried out. The study established that ATM usage has a positive significant relationship with operational performance. The study recommends that managements of commercial banks should highly invest in ATMs as it positively influences operational performance. The study suggests that further studies should be conducted to relate ATMs with other variables like quality and flexibility.

Highlights

In today’s contemporary business environment, the need for Automated Teller Machines cannot be overemphasized
The results of this study indicate that Tolerance values were greater than 0.1 and variance inflation factor (VIF) values were much lower than the recommended cut-off of 10 [4], suggesting the absence of multicollinearity in the data (Automated Teller Machines usage = 3.171)
The objective of the study was to establish the effect of automated teller machines usage on operational performance of commercial banks in Nakuru County, Kenya

Summary

Introduction

In today’s contemporary business environment, the need for Automated Teller Machines cannot be overemphasized. The banking industry adopted the ATM concept for reducing costs and providing better services for the customers. The first ATM was installed in the early 1967 by Barclays bank in London, UK. The banks started installing ATM machines in the bank buildings first where a cash dispensing machine was not linked to the account directly. With the spread of Internet connectivity, the ATM machines have become a part of the urban landscape and available at parks, shopping malls or airports with many more services on offer than just cash dispensing [1]. There are many different ways of measuring operational performance. The most predominant approach in the literature is to use cost, quality, delivery, speed, reliability and flexibility as the basic dimensions of operational performance [3]

Methods

Results

Conclusion