Abstract:
In the highly competitive banking industry, the success and failure merely depends on the
quality of service provided to customers. The aim of this study was to identify the factors
influencing customer’s use of Automated Teller Machine (ATM) services; and to determine the
effect of ATM services quality on customer’s satisfaction in Haramaya area Commercial Bank
of Ethiopia (CBE) branches customers. The study was carried out in Eastern Hararghe,
particularly Haramaya area CBE branches. The study is utilized cross-sectional data
collected from sample of 260 (non ATMs users =94 and ATMs Users=166) customers of CBE
in Haramaya area branches using multi-stage stratified sampling procedure. To address the
research objectives, the study was used descriptive statistics and econometrics model such as
logistic and tobit regressions model. The result also indicated that the mean score of overall
customer satisfaction toward the bank ATM is 3.55 (71 percent), which is above average mean
score. Customers expectation regard to ATMs services quality dimension, tangible, reliability,
responsiveness, assurance and empathy were 3.37, 3.22, 3.45 3.80 and 3.64, mean score
respectively which have above average. However, security and easy to use service quality
dimensions have the first and second mean score of 4.12 and 4.07 respectively. The logit
model results indicate that among eight explanatory variables, Education level of customers,
Availability of ATM in customers location and Perception of ATM were important factors,
positively and significantly influencing the probability of use of ATM services, while Age of
customer’s affected the probability of use of ATM services negatively. On the other hand,
tobit model results indicates that reliability, responsiveness and easy to use were important
factors, determine customer’s satisfaction with ATM services while the remain explanatory
variables such as Tangible, Assurance, Empathy and Security were insignificant. Therefore,
the bank should try to improve its services by create awareness about the important of ATM
and how to utilized, increase the availability ATM machine, development and design of less
complex and easy to use systems, effective ATM management and maintenance programmes in
order to increase the numbers of ATM users and customers satisfaction.
