1.

ABSTRACT

Today, the primary concern of every bank is to migrate it’s customers from the
counters to the ATM machines. They fail in doing so but then this failure gives
them some new learning and a footstep to succeed the next time.

We present a research study to find out the problems as to why people are not using
ATM machines or what keeps them away from using it. Our scope will be limited
to the Gomtinagar branch of SBI (State Bank of India).

On the basis of our research we intend to suggest /recommend certain solution sets
for SBI, in order to migrate their customers to ATM and also encourage them to
conduct maximum of their transactions through the ATM.

We intend to collect data through a questionnaire for our research and analyze it
with the help of simple analytical tools in order to come up with a suitable plan of
action.

1
2. BACKGROUND

2.1 NATURE OF DECISION:

The decision that has to be taken is about the action plan that must be undertaken so as to
migrate the customers of SBI, Gomtinagar branch towards the ATM counters in the area.

Over the years, SBI has expanded its ATM coverage in the entire country. State Bank offers you
the convenience of over 8500 ATMs in India, the largest network in the country and continuing
to expand fast! This means that you can transact free of cost at the ATMs of State Bank Group
(This includes the ATMs of State Bank of India as well as the Associate Banks – namely, State
Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, State Bank of
Mysore, State Bank of Patiala, State Bank of Saurashtra, and State Bank of Travancore) and
wholly owned subsidiary viz. SBI Commercial and International Bank Ltd., using the State Bank
ATM-cum-Debit (Cash Plus) card.

Besides State Bank ATM-Cum-Debit Card and State Bank International ATM-Cum-Debit Cards
following cards are also accepted at State Bank ATMs: -

1) State Bank Credit Card

2) ATM Cards issued by Banks under bilateral sharing viz. Andhra Bank, Axis Bank, Bank of
India, The Bank of Rajasthan Ltd., Canara Bank, Corporation Bank, Dena Bank, HDFC Bank,
Indian Bank, Indus Ind Bank, Punjab National Bank, UCO Bank and Union Bank of India.

3) Cards issued by banks (other than banks under bilateral sharing) displaying Maestro, Master
Card, Cirrus, VISA and VISA Electron logos

4) All Debit/ Credit Cards issued by any bank outside India displaying Maestro, Master Card,
Cirrus, VISA and VISA Electron logos

In the Gomtinagar area of Lucknow itself, there are about 8 ATM machines operating at different
locations. In spite of this there is always a large queue in the cash counters of SBI, Gomtinagar
branch near the Manoj Pandey encircle.

This causes SBI to lose its reputation and has been a primary reason why SBI has not been able
to establish a service-centric image in the eyes of its customers despite using all the
technological innovations possible.

Thus we see that the nature of the decision is based completely on the motives and intentions of
the customers. We need to find an answer to this question which should motivate people to use
more ATM’s.

1
The primary purpose of the decision can hence be summarized as to divert the crowd from the
counters to the ATM for tasks such as depositing and withdrawal of money, so that the SBI staff
can pay more attention to the new customers that arrive with a purpose of opening a new account
with SBI.

2.2 NATURE OF STUDY:

The study undertaken in the following sections is survey based where we try to get to the root
problem of people not using the ATM machines.

SBI has two sets of savings account customers, one who do use ATM and the other who do not
use ATM at all. But the problem stems from the fact that even the ones who are using the ATM,
are not doing enough transactions through the ATM and thus visit the branch often for various
tasks.

SBI acknowledges that there are certain problems with their ATM services as well, but they lack
a clear understanding of the underlying problems. They have proposed solutions like biometric
verification but are very reluctant to launch it on a large scale, not due to budget constraints but
because they are not sure about its success.

The solution used by SBI till date has been highly disintegrated and unsynchronized. They cover
only limited set of problems. We intend to provide a comprehensive and actionable plan for SBI
with our study.

1
3. LITERATURE REVIEW

The Institute for Development and Research in Banking Technology (IDRBT) has undertaken a
"special study of the ATM deployment and usage in India." The study focuses on the scale and
size of ATM networks, geographic and demographic coverage, service levels, economic issues
and emerging trends in ATM usage and "provides inputs to the RBI for necessary policy
formulations."

Today, there are about 20,000 ATMs in India and this number is expected to go up to 30,000 by
December. About two crore people use these ATMs. "Tremendous progress has been achieved by
a number of banks in improving customer service and access to banking products and services
through these channels," notes IDRBT. "The phenomenal growth of ATMs in India is a striking
example of the vigorous campaign by banks aimed at customer convenience and satisfaction," it
adds.

However, today not all ATMs are accessible to customers of all banks. At present, there are
networks of ATMs (Cashtree, MITR, Bancs), formed by a group of banks pooling their ATMs
through a common switch. For example, Cashtree is a network of ATMs of Bank of India,
Syndicate Bank, Dena Bank, Union Bank of India, United Bank of India and Indian Bank. But
the ideal situation is when a person could use any ATM anywhere in the country, no matter which
bank's customer he is. The RBI is pushing banks to that situation. The IDRBT study is a part of
the effort.

Mr M.V. Sivakumaran, Project Co-ordinator for the `ATM Deployment and Usage' study,
believes that the `all ATMs for all users situation' is less than two years away. Towards this
objective, the IDRBT set up a `national financial switch' (NFS) in October last year, to which all
banks could connect up. At present, NFS has only six members.

Paper presented by Antonella De Angeli, Uday Athavankar, Anirudha Joshi, Lynne Coventry
and Graham gives a method and results of an ethnographic study aimed at building an
understanding of Automatic Teller Machine (ATM) adoption in Mumbai, India. The study
combined field observations and semi-structured interviews (N=43) of early ATM adopters, bank

1
customers who do not use ATMs, and people who used the ATM for the first time as part of our
research. Data were analyzed to identify specific cultural traits that may affect the adoption of
ATMs in urban India. Results demonstrated the unique role of the cultural context in affecting
users' expectations and behavioral possibilities, thus determining people's response to the
machine. This led to the conclusion that an understanding of cultural biases and metaphors can
facilitate technology diffusion and acceptance informing design localization and supporting the
development of strategies to motivate and train users.

Automatic Teller Machines (ATM) are often thought to be just cash dispensing machines or a
point to check balance in bank accounts at one convience. But now, more and more people trust
this gizmo to deposit their cash and cheques, according to a recent ATM users’ survey by
Banknet India.

Out of 300 persons who participated in the survey, 64 percent said they were comfortable with
depositing cash and cheques in an ATM. This, perhaps, reflects a change in people’ mindset
towards the safety of these machines and accepting the norms of the bank staff counting the
notes in their absence, it said. However customers also complained about the non availability of
envelopes to stuff cash at ATMs. While the ATM usage is on the rise, customers have some
problems in using these machines. Waiting long queues at ATMs remains a bugbear. This
indicates the need to install additional machines at high-demand areas.

The limit on daily cash with drawl is another major problem that ATM users often complain
about. Perhaps the lack of wide acceptance of debit cards at many shops and outlets makes
people to resort to cash with drawal for their needs, the survey said. About 95 per cent of the
respondents preferred banking through ATMs over conventional branch banking. Over two-thirds
of persons used ATMs more than once in fifteen days.

People are now less hesitant towards the use of ATMs for usual services.

1
4. STUDY METHODOLOGY

4.1 DECISION OBJECTIVE:

What should be done to migrate our customers from counters to the ATM machines?

4.2 RESEARCH OBJECTIVE:

To understand why our bank’s customers are shy from using our ATM and to determine a
strategy in order to migrate at least 80% of our customers to the ATM within the next two years.

4.3 RESEARCH QUESTIONS:

1 What % of customers use only counters and not ATM?

2 Why are the above people not using the ATM?

3 What % of transactions is done through ATM by people who do use them?

4 What is the opinion of customers about the problems they face while using our ATM’s?

5 Are our ATM services lacking in quality in the eyes of the customers?

4.4 OPERATIONAL STATEMENT:

What should be done in order to move at least 80 % of our customers to conduct at least 75 % of
their transactions through ATM within the next two years?

The possible actions will include:

• Assembling a change machine alongside our ATM machines.

• Increasing the number of ATM machines.

• Increasing the minimum withdrawal limits through ATM.

• Using thumb impressions instead of Pin to access accounts through ATM.

• Promoting the usage of ATM by organizing training exercises at our bank outlet.

• Assembling an inverter unit at our ATM outlet.

The criterion for selection will include:

1
 • Queues at counters should become smaller.

• Number of transactions recorded via ATM should increase.

• Increased application forms for ATM cards/Debit cards.

The possible constraint will be that the fixed cost for the chosen action should not exceed Rs.
500000.

4.5 NATURE AND FUNCTION OF DATA:

Causation Payoff Identification Description

Facts RQN 1
RQN 3
Knowledge

Opinion RQN 5
RQN 4
Intention

Motives RQN 2

RQN: Research question number

4.6 RESEARCH DESIGN:

This particular research would be carried out by using a descriptive research design. This is so
because we are only interested to know that what is happening.

We will form a focus group of 40 to 50 of our bank’s account holders and gather data from them
through a questionnaire. Further applying simple statistical techniques will be used to process the
data collected. Thus the methodology adopted includes:

1
 Questionnaire

 Random sample survey of customers

The final action to be taken will be decided on the basis of the data obtained above.

4.7 SAMPLING PLAN:

 Sampling since segment wise customers of SBI, Gomtinagar were not available for the
overall customers was considered for the study. 100% coverage was difficult within the
limited period of time. Hence sampling survey method was adopted for the purpose of the
study.

 Population: (universe) customers SBI, Gomtinagar.

 Sampling size: A sample of fifty was chosen for the purpose of the study. Sample considers
customers who visit SBI, Gomtinagar outlet for their banking transactions.

 Sampling Methods: Probability sampling requires complete knowledge about all sampling
units in the universe. Since due to time constraint non-probability sampling was chosen for
the study.

 Sampling procedure: From large number of customers of SBI, Gomtinagar, respondents

were randomly picked up.

 Field Study: directly approached respondents.

1
4.8 DATA COLLECTION INSTRUMENT:

COLLECTION OF DATA THROUGH QUESTIONNAIRES:

The data collected for the study purpose is through questionnaires. Fifty customers of SBI,
Gomtinagar have been selected randomly for the study purpose and then the information
revealed from the customers is analyzed and interpreted in the study.

4.9 ANALYTICAL PROCEDURES:

Simple analytical tools are used in this research in order to infer the collected data. The various
tools used are as followed:

 Bar charts

 Frequency distributions

 Percentages

Bar charts and frequency distributions are used to depict the quantified effect of various
problems that the customers face. In the end the relative percentage of customers having the
same problems has been used as a selection criterion for the selection of the course of action to
be taken.

4.10 LIMITATIONS OF THE STUDY:

 Since sample size is only 50, which is not a true representative of the population as a whole.

 These 50 respondents are further bifurcated into two groups from the lead question with
further limits the scope of the study.

 The geographical scope of the study is limited to SBI, Gomtinagar branch only.

 Level of accuracy of the results of research is restricted to the accuracy level with which the
customers have given their answers and the accuracy level of the answers cannot be

1
 predicted.

5. FINDINGS

 34 respondents out of 50 said that they used SBI ATM for their banking transactions.

 The division of the % of ATM transactions done by these people of their overall
transactions is calculated from their responses and the results are as followed:

% of ATM transactions Frequency

10-20 0
20-30 1
30-40 2
40-50 8
50-60 8
60-70 14
Above 70 1

1
  Out of these 34 respondents, their level of satisfaction with the current ATM services of
SBI is as followed:

RESPONSE FREQUENCY PERCENTAGE(%)

Completely satisfied 6 18
Partially satisfied 21 62
Not satisfied 7 20

 The frequencies of problems as mentioned by these 34 respondents is as followed:

PROBLEMS FREQUENCY PERCENTAGE(%)

Large queues 23 68
Lack of cash 11 32
Low withdrawl limit 4 12
Frequent machine malfunction 28 82
Lack of paper 6 18
Difficulty in depositing through ATM 4 12
Others 2 6

1
  The three major problems choosen by these 34 respondents subsequently with their
respective frequencies are as followed:

PROBLEMS FREQUENCY PERCENTAGE(%)

Frequent machine malfunctions 29 85
Large queues 30 88
Lack of cash 24 71
Others 11 32

 After being asked that if their three major problems are removed will they start using
more ATM, their responses were as folowed:

RESPONSE FREQUENCY PERCENTAGE(%)

Yes 31 91
No 3 9

 Now the reminning 16 responded who responded that they do not use the ATM, when
asked to indicate their problems responded in the following manner:

PROBLEMS FREQUENCY PERCENTAGE(%)

Unavailability of change 4 25
Unable to remember PIN no. 10 62
User interface difficult 4 25
Fear of hacking 6 37
Lack of knowledge 14 87
Others 2 12

1
  The three major problems choosen by these 34 respondents subsequently with their
respective frequencies are as followed:

PROBLEMS FREQUENCY PERCENTAGE(%)

Unable to remember PIN no. 11 69
Lack of knowledge to use the ATM machine 14 87
Fear of hacking of accounts 10 62
Others 2 12

 After being asked that if their three major problems are removed will they start using
ATM, their responses were as followed:

RESPONSE FREQUENCY PERCENTAGE(%)

Yes 13 81
No 3 19

1
6. DISCUSSIONS OF FINDINGS

We have used a two way approach to find a solution to our problem. We have focussed on two
types of customers, the one who use ATM and the ones who don’t.

From our findings we have come to know that about 68% of total respondents(50) are actually
using our ATM services while the remainning are not.

To ascertain the respondent’s level of satisfaction with our ATM services, we have gathered that
from them and we have thus found that about 80% of them are either completely or partially
satisfied while 20% are not satisfied.

Then we calcualted the percentage ATM transactions that these 68% people are conducting so
that we get a clear cut idea of what is actually happening.Our purpose lies in not only migrating
the non users but also to increase the % transactions done through ATM.

1
We have then successfully quantified the problems that people face while using our ATM
machines. We have come up with the three major problems and the percentage of respondents
that feel that way.

To furthur get into the respondent’s insight, we have also got their responses on whether they
will use more of ATM if their three major problems are sorted out. We find that about 91% of
people have given a positive response.

Our next step was to quantify the problems of people who are not using the ATM’s at all. Similar
to above, we have come up with three major problems and the percentage of people that feel that
way.

We have also asked them that whether they will start using ATM if their three major problems are
resolved and about 81% of people have given a positive response.

7. CONCLUSIONS AND RECOMMENDATIONS:

7.1 CONCLUSION
After the study, we can conclude that there are enough customers who use ATM services but the
transactions that they conduct through ATM is not satisfactory. Only one out of thirty four
respondents conducts over 70% of his transactions through the ATM. Also as many as 19 out of
34 respondents do below 60% of their transactions through the ATM.

The three major problems faced by customers are identified as frequent machine malfunctions,
large queues and unavailability of cash in the machine with 85%, 88% and 71% customers
feeling that way. Thus, we need to focus on these problems. Our study shows that if we solve
these problems, as many as 91% of customers are ready to increase their ATM transactions.

1
Furthur, customers who do not use ATM’s at all find lack of knowledge to use the ATM
machines, fear of hacking and difficulty in remembering their PIN no’s. as their major problems
and 81% of them are ready to start using ATM’s if these are sorted out.

7.2 RECOMMENDATIONS

 SBI is considering using biometric verification like thumb impressions for accessing
accounts through ATM machines. We recommend that this solution should be
implemented to all machines of Gomtinagar area.

 The above should be coupled with a promotion and trainning programme at bank outlets,
so that customers become comfortable with the machines and also the fear of hacking is
removed through explanation of the safety mechanisms.

 Cash checks at SBI ATM’s should be done every week as compared to twice a week
which is done now.

 Looking at the demand in Gomtinagar area, we recommend that the number of ATM
machines should be increased by five and these should be adjusted alongside already
functioning machines.

 SBI also needs to hire engineers to insure that machine malfunctions are minimised and
any problems that do occur are solved the same day.

8. REFERENCES AND BIBLIOGRAPHY

The following web links have been used for references in this syudy:

 www.sbi.co.in/atmservices.asp

1
  http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V0D-4B9DBD2-
1&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000050221&_
version=1&_urlVersion=0&_userid=10&md5=a07e3a12473650adc379b89925280728

 www.banknetindia.com

 http://www.rupeetimes.com/

9. APPENDIX A

QUESTIONAIRE

1
NAME : _______________________________________________________

OCCUPATION : _______________________________________________________

NUMBER OF YEARS WITH SBI : _______________________________________________________

(1) Indicate the number of transactions you did with SBI last week.

(2) Do you use ATM for your banking transactions?

YES NO

NOTE: If your answer to (2) is YES then answer (3) to (7) or else answer (8) to (11).

(3) Indicate the number of transactions that you did through ATM last week.

(4) Indicate your level of satisfaction with our ATM services.

Completely satisfied

Partially satisfied

Not satisfied

(5) Indicate the problems that you face while using our ATM services.

Large queues

Unavailability of cash in the machine

Minimum withdrawl limit too low

1
 Frequent machine malfunctions/Power failures

Unavailability of paper in machines for mini statements

Difficulty in depositing money through ATM

Others(please specify)

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
---

(6) Kindly indicate 3 problems from ypur responses above that concern you the most.

(a) _____________________________________

(b) _____________________________________

(c) _____________________________________

(7) If your three stated problems above are sorted, will you increase the number of your ATM
transactions?

YES NO

(8) Kindly indicate the reasons for not using ATM from the list below.

Unavailability of change

Unable to remember PIN no.

Difficulty in using ATM machine(user interface too difficult)

Concerns about safety of money due to hacking of account

Lack of knowledge to use the ATM

Others(please specify)

1
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
---

(9) Indicate three problems from your responses above that concern you the most.

(a) _______________________________________

(b) _______________________________________

(c) _______________________________________

(10) If the three problems indicated by you above are sorted, will you start using ATM?

YES NO

(11) If NO, then mention what else you would like to be sorted so that you start conducting
your transactions through our ATM machines.

_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
______