THE AUTOMATED TELLER MACHINE (ATM) SYSTEM IN THE BANKING SECTOR; PROBLEM AND PROSPECTS (A CASE STUDY OF SELECTED BANK IN AUCHI)

CHAPTER ONE

INTRODUCTION

1.1      Background to the Study

If you ask four (4) different people who invented the Automated Teller Machine (ATM) there is a good chance that you may receive four different answers. Four (4) or more individual, have actually claim to have invented the Automated Teller Machine (ATM). Including “Don Wetzel, George Simjian, John Shepherd. Barron and John D. White”. No matter who invented the Automated Teller Machine (ATM), no one can dispute the impact it has had on our society. An Automated Teller Machine (ATM), by the way is a machine that allows you to do banking transaction, from a remote computer operated terminal.
Prior to the invention of ATM, people had to visit a bank or other financial institution to do their banking. It was not uncommon to see a line of 40 to 50 people waiting outside the bank on a Monday morning waiting for it to open.

While some banks still have this type of activity. The Automated Teller Machine (ATM) has decreas ed the need to wait in line and has helped many people perform their transactions in a fraction of the time it once took.

When you visit an Automated Teller Machine (ATM) you are able to perform almost every transaction that you can inside the bank. You can deposit and withdraw money, transfer money between account access a home equity line of credit, purchase stamps and deposit a check. We will probably always have human tellers, but Automated Teller Machine (ATM) have provided a certain amount of convenience designed to accommodate customers.

In 2004 there were more than 370,000 Automated Teller Machine (ATM) in the United State. You can find them in grocery store, Airport terminal, convenience stores, gambling Casinos, Movie theatres, shopping malls, gas station and many more locations.

This allows you to do your banking whenever you want.

The Automated Teller Machine (ATM) has become another mechanism that banks use to make money. If you go to an Automated Teller Machine (ATM) that is not your own bank, you will be charged a fee of Nl00, but it all depends on the bank. Most people would like to use their own bank but if one is not available they are willing to pay the fee to gain access to their money Banks makes millions of Naira in fees also if a customer does not record their Automated Teller Machine (ATM) transactions they could over draft their account which lead to more fees.

At this junction, is good to know what Automated Teller Machine (ATM) is all about.

According to investor words.com: Define Automated Teller Machine (ATM) as a machine at a bank branch or other location which enables a customer to perform basic banking activities (checking one’s balance, with drawing or transferring finds) even when the bank is closed. Automated Teller Machine (ATM) is also use to provide the convenient withdrawal service in everywhere, even if users don’t come to a bank.

According to Edet, O. (2008), Automated Teller Machine (ATM) means (Advice To Men) in the sense that you don’t have to worry the weekend because Automated Teller Machine is meant to serve us 24/7.

According to Abubakar Aleghe Isah, Accounting Department HND Final 2013: Automated Teller Machine (ATM) is a cash machine made available by
banks to service individual 24/7 without network interruption or any difficulties in carrying out individuals transaction.

1.2      Statement of Problem

The problem of the project is as follow: Each bank provides, its own computer to maintain its own accounts and process transactions against them with this system, a client must first open an account before he/she can use Automated Teller Machine (ATM).

The opening account involves the client providing his personal information. A client may open one or more accounts for deposit account. The client can check the account status 24 hours a day. When the client deposit/withdraw money. The client must specify which account and the amount. The Automated Teller Machine (ATM) communicates with a central computer which clears transaction with the appropriate banks. An Automated Teller Machine (ATM) accepts a cash card, interacts with the user, communicates with the central system to carry out the transaction, dispenses cash, and prints receipts. The system requires appropriate record keeping and security provisions.

The system must handle concurrent accesses to the same account correctly. The bank will provide their own software for their own computer.

1.3      Research Questions

In order to get information from respondents. The following questions were raised;

a.     To what extent can Automated Teller Machine (ATM) improve or enhance banking services?

b.     What are the major problems associated with the development of Automated Teller Machine (ATM)?

c.     To what extent has Automated Teller Machine (ATM) affected banking activities?

d.     Is Automated Teller Machine prone to any fraud?

e.     Is the Automated Teller Machine (ATM) a welcome development to all bank depositors?

1.4      Objectives of the Study

This research work intends to assess the extent of Automated Teller Machine (ATM) payment in banking activities as well as identify the various types of Automated Teller Machine (ATM) banking.

The researcher will also evaluate the major problems associated with the development of Automated Teller Machine (ATM) banking system in Nigeria as well as evaluating possible solutions to these problems.

The effect of Automated Teller Machine (ATM) banking on profitability of banks will also be assessed.

To examine the different types of Automated Teller Machine (ATM) used In Nigeria banks.

The researcher will like to evaluate the impact of these e-payment systems on banking industry and also assess the impact of Automated Teller Machine (ATM) banking in Nigeria economy.

1.5   Statement of Hypothesis

Ho:  Automated Teller Machine (ATM) does not improve or enhance banking service

H_I: Automated Teller Machine (ATM) improve or enhance banking service

Ho:  Automated Teller Machine (ATM) system is not prone to any fraud.

H_I:    Automated Teller Machine (ATM) system is prone to some fraud.

Ho:  The Automated Teller Machine (ATM) is not a welcome development to all bank depositors.

HI:   The Automated Teller Machine (ATM) is a welcome development to all bank depositors.

1.6   Significance of the Study

Automated Teller Machine (ATM) banking in our economy today is a welcome development and also its impact in the society are over whelming, so this research is significant in so many ways.

It will expose the strength and weakness of Automated Teller Machine (ATM) banking. It will motive banks and other economy agent to computerize their services.

Knowledge in the area of Automated Teller Machine (ATM) banking will be advanced. Apart from contributing to the knowledge of Automated Teller Machine (ATM) banking, it forms a reference for future research in this area.

1.7   Scope of the Study

This research is on economic implication of Automated Teller Machine (ATM) banking in Nigeria banks and also the various form of payment an Automated Teller Machine (ATM) system used by banks.

The researcher will base this work on the entire deposit money banks in Nigeria but to First Bank in particular.

1.8   Limitations of Study

Time is a major factor to the researcher as research of this kind requires enough time in gathering of data, but it was not given to carry out the research, distribution, collection and analysis of questionnaires.

Also the school system has made it difficult for student to go out in search for information by not granting. exert for student.

Finally, finance was in fact the most limited factor in spite of this the researcher have to go to the street to interviewed most of the student, workers and the jobless in individuals using Automated Teller Machine (ATM).

1.9   Definition of Terms

Automated Teller Machine (ATM): This is defined as a machine at a bank branch or other location which enables a customer to perform basic banking activities (checking one’s balance, with drawing or transferring finds) even when the bank is closed.

Payment System: This defined as a system which consists of net works which link members, the switches for routing message, rules and procedures for the use of its infrastructure.

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