Effects Of Automated Teller Machine On The Performance Of Nigerian Banks

In today’s business world, globalization and international experience has become critically important. Banking industries can no longer get away with operating loosely connected groups of businesses that happen to be located around the world, but must strategically integrate their activities. Mitroff  [1] stated that, only the banks, businesses, industries, and whole by societies that clearly understand the new rules of doing business in a world economy will prosper. Global competition in the banking sectors has forced management and executives to recognize that they must think differently about banking activities and management. As a global banking, the only way to succeed is to develop an effective global banking management system with personnel capable of designing and implementing transnational business strategies through the use of modern technology such as automated teller machines (ATMs).

Technology has tremendously stimulated expansion of the banking networks and range of the offered services during recent years. All banking services, such as electronic payments, loans, deposits, or securities have become heavily dependable on information and telecommunication technology. This is the main reason why banks are the biggest users of modern technology equipment. Due to the complexity of banking services, every opportunity to speed up their performance or to make them more accessible for customers is very well welcomed by banks. However with improvements of the quality of services, the important question appears if this process can provide the economic values for banks? Unfortunately not every increase in the customers’ satisfaction transfers into the higher bank profits, especially in the case of very expensive investments in technology like automated teller machines (ATMs).

Although every banking operation requires some technology applications, researcher vary on the subject of the relationship between the level of employed automated teller machines, and the value of the banking efficiency increase. All researchers agree on the importance of ATMs for the further developments of the banking industry, but some of them have found lack of proportionality between the increased in the scale of technology utilization and the increase in banks profitability.

Automated Teller Machine (ATM), also known as a automated banking machine (ABM) or Cash Machine and by several other names, is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier, human clerk or bank teller. On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip, that contains a unique card number and some security information such as an expiration date or CVVC (CVV). Authentication is provided by the customer entering a personal identification number (PIN). Using an ATM, customers can access their bank accounts in order to make cash withdrawals, credit card cash advances, and check their account balances as well as purchase prepaid cellphone credit.