CHAPTER ONE INTRODUCTION 1.1          BACKGROUND OF THE STUDY

The Automated Teller Machine as it is called, is a computerized technological device and programme that is incapable of accepting cheques (paper bills) and accurately paying (dispensing) cash to customers, at the push of buttons with the right and acceptable commands.

This magic device called ATM is installed monitored and regulated by Banks. Most ATM machines are installed within bank premises, while in some cases, they are strategically positioned in locations like supermarkets, club houses, eateries and serves as means for customer to collect their money anytime, anywhere, any day, provided the link is available.

At the issuance of the ATM card, which is built with security features, customers are advice to activate the ATM card and change the pin before use. It is at this point that the customer, for the first time replaces the initial pin that come with the

card to his/her so desired personal and confidential number of security purposes.

The Automated Teller Machine (ATM) is an unattached electronic machine in a public place connected to the data system and related equipment and activities by banks. The automated teller machine system which integrate all licensed banks into a network, thereby reducing or eliminating the limitation of traditional branch-based of banking and making the promised real-time online concept of globalize banking a reality.

Automated teller machines (ATM) are mechanical devices that can provide a variety or routine banking services without the aid of a human teller. ATMs are the most immediately visible type of retail banking technology. They play a key role in any retail banking efforts to use technology as a quality weapon to defeat competition.

The automated teller machine was introduced into the banking system to solve the problem associated with late night or banking hour withdrawals of money. This facility plays a major role in offering convenience, speedy and round the clock services (Barna and Mukgopadbyay, 2001). With the advent of ATM, Banks are able to serve customers outside the banking hall. It is operated by a plastic card which had some special features. The plastic card is replacing cheque, personal attendance of the customers, banking hour’s restriction, and paper based verification. ATM has made hard cash just seconds all through the day.

While the specific services that ATMs can provided are determined by the institutions that own them, any applicable legal restriction, makes ATMs typically allow customers to withdraw cash from their accounts, and make balance inquires.

Some banks have experimented with multifunction, ATM that allows users to pay bills and purchase certain items.

The post – consolidation era in the Nigeria banking sector has brought with it a proliferation of various and differentiated electronic features for doing business between a customer and a bank; ATM represent the single largest investment in the electronic channel services for bank in Nigeria inspite of this development, to some persons, the use of ATMs as a means of e-banking has remain elusive and confusing.  E-banking requires a certain literacy rate. Most Nigerians who have access to financial resources are not literate enough to be able to operate ATMs. It has also been argued that the criminal activities of scammers also make the use of ATMs unattractive to many Nigerian.

STATEMENT OF THE PROBLEM

The challenges of automated teller machine facing the Nigeria banking system are multidimensional and the problem ranging from banking administration to fluctuation in the system and all these problems pose some peremial disturbances to the banking institution.

To tackle problems of these natures, Nigeria banks have  adopted various strategies one of such strategies that has been adopted by the banking in recent time have been automated teller machine. This is done on order to ensure that easy access is created for valid customers to  withdraw their money anytime, anywhere, any day, even while on their journey, provided the link in available.

Despite the use of automated teller machine in the country, there are several constrain is inherent in the banking sector and the economy. Such imbalances  include network problem, loss of card, card damage, unauthorized withdrawals, poor infrastructure,  system failure in the banking sectors, electronic fraud, not easily affordable, unemployment, these and other related issue led to the fundamental problem of this study.

OBJECTIVES OF THE STUDY

The main objective of the study is to examine the pros and cons of ATM in the Nigeria society.

In a more specific term, it tries to;

1. Investigate the level of challenges posed by ATM to the users.
2. Verify the advantages of ATM in the banking sub-sector.

RESERCH QUESTIONS

The dimension which this research will cover, shall be based on the following questions which will help in creating an insight into the problems under investigation.

1. Does automated teller machine exist in Rivers State?
2. To what extend has ATM impacted on bank service delivery?
3. Does automated teller machine affect the payment system on banks?
4. What are the effects of automated teller machine on employment?
5. What are the uses of automated teller machine in Nigeria?
6. What are the impacts on customer transaction?
7. Does automated teller machine have any implication on the following economics variables? (mention the economic variables)
8. To what extend does ease dispensation of money?
9. What are the impacts of automated teller machine to such internal variables? (Mention and use one internal variable
10. What role does automated teller machine play in the banking sector?

RESEARCH HYPOTHESIS;

For effective and meaningful deduction out of the questions raised, these hypothesis were tested.

H1: there is no significant relationship between the use of ATM and customer satisfaction.

H¬2: There is no significant relationship between external banking operations and ATM usage.

SIGNIFICANCE OF THE STUDY:

The value of any study lies in its usefulness to the society. In view of this fact therefore, this study which focuses on the automated teller machine practicing and operate in the Nigeria banking institution is of most useful to banking officers and businessmen and women working class individuals.

Again to avoid working with bulk of money from place to place and it enable the Central Bank of Nigeria (CBN) to effectively manage the cashless policy in the system.

This study is of immeasurable important to Deposit Money Banks (DMBs) customer who will never like to waste time in banks or on the counter by lining up for cashier as a result of cheques. Another is that the amount charged is minimal per withdrawals on the counter. And the ultimate significance of the study could be that the card affords the customer not to be carrying bulk cash around. Like most business moguls transacting across state would lodge in cash in a particular bank, but could not withdraw from any other place courtesy of inter-switch and inter banking services. Even on weekends when banks are not transacting, the ATM service is there to serve the customer.

SCOPE/LIMITATION OF THE STUDY

The scope of the study covers the entire managers and staffs of First-Bank in Port Harcourt metropolis. There is hardly a valuable undertaken without a setback. The same thing implies to this research work. The researcher encounters some problems which are listed below:

Time constraint: time, as we all know is a major raw material that needs carefulness in the use of bringing the best out of one’s effort. Time was one thing the researcher never had as the time of this project the same time of my exams.

Financial constraint: The researcher encountered some financial problems which affect the timely completion of this work.

Lack of materials: Sourcing for materials was very difficult in the course of the research, some articles and journals were protected were in some library lacks the required books for my research.

DEFINITION OF TERMS

Most terms used in this project are used in their conceptual and general usage and therefore, requires no further definition. However, a few of them require some explanation or qualification as to give room for better understanding. Some of these terminologies include;

1. Automated teller machine (ATM): Are mechanical devices that can provide a variety of routine banking services without the aid of human teller (e.g.). the ATM replacing cheque personal attendance of the customers, banking hours, restrictions, and paper verifications.
2. Technological Infrastructures: This is the scientific knowledge used in practical way in developing and designing new machine as equipment.
3. E-payment: It is a device that can post and transfer money and to serve and pay bank customers outside the bank hall or queue.
4. Deposit money bank (DMB): These are those licensed commercial banks or retail banks.
5. Central Bank of Nigeria (CBN): This can be defined as the only financial institution charged with the responsibility of controlling other financial institution and stabilizing the economy of Nigeria. It is banker to banks and government.
6. Pros: An advantage or progressive aspect of something.
7. Cons: The negative aspect or disadvantage.