This study investigates the effects of ATM on the performance of Nigerian banks. Available studies have concentrated on the significant dimensions of ATM (automated teller machine) service quality and its effect on customer satisfaction with a bias against ATM producers. The study is motivated by the astronomical challenges confronting the proliferation of ATM infrastructure and attendant financial loss to banks which are often under¬reported. Also, there are serious debate on the relevance of ATM technology as most countries in the world are moving away from the virus technology to the more secured chip cards free of credit and debit frauds. Questionnaire was used to collect the data from a convenience sample of 125 employees of five selected banks in Lagos State with interswitch network. Therefore, data collected through the questionnaire were analyzed statistically by using the Software Package for Social Science (SPSS Version 20.0 for Student Version) and chi-square technique. The results indicate that less than the benefits, the deployment of ATMs terminals have averagely improved the performance of Nigerian banks because of the alarming rate of ATM fraud. Similarly, ATM service quality is less correlated to security and privacy of users and providers.The conclusion therefore is that banks should strive to increase their security layers to subvert the tricks of web scammers, limit the amount which customers may be allowed to withdraw at a time and provide electronic alerts to customers’ phone for all transactions carried out on their bank accounts through ATMs and the provisions of extra security layer that can prevent third party to make use someone else’s ATM card for unauthorised withdrawals electronically.




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 [2].

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.

Ogbuji, et al. [3] postulate that ATM allows a bank customer to conduct his/her banking transactions from almost every other ATM machine in the world. However, the spread of the machines has been generating a lot of heat, as customers face a splurge of frustration in using it; either the machines will not dispense cash, or debit transactions when cash is not dispensed or cards get stuck in them. Dapo [4] indicate that the proliferation of the machines is giving more concern. As with every other technological breakthrough the ATMs have generated astronomical challenges and problems for the beneficiaries of financial services in Nigeria. Most users of ATM have encountered the problem of Scam. Apart from epileptic services rendered by the machines, faceless crooks steal from the accounts of hundred of bank customers via the ATM technology. The fraudsters perpetrate this financial crime by stealing the personal identification number, PIN, a special secret code that grants access to the usage of the cards, and consequently, getting hold of the funds of the susceptible ATM users.

The relationship between banking efficiency and the use of ATM (Automated Teller Machine) is a complex one. This is because the overall levels of efficiency and productivity do influence the organization overall success [5]. This explains why most modern banking sectors develop ways of increasing organization and workers’ efficiency. Some of these ways include goal setting, job enrichment, adoption information technology, globalization, training and development. All these represent several practical ways of increasing banking sector’s performance, which could also be a reflection of institutions efficiency.

The achievements, goals, profit and attainment of banking sector depends largely on the proper management and technology such as ATM adopted in the banking activities. It’s upon this basis that the level of efficiency, effectiveness and performance of banking sector and other organization is measured. The impact of ATM on the performance of banking institutions have been without some challenges. There have been near lack of empirical research efforts on the effect of ATM on performance of the providers, using FCMB as case study. Arguably, the most revolutionary electronic innovation in this country has been the ATM. In Nigeria, banks with ATM offerings have them networked and this has increased their utility to customers. The ATM has been the most successful delivery medium for consumer banking in this county. This call for investigation.