APPLICATION OF QUEUING THEORY TO BANK AUTOMATED TELLER MACHINE SERVICES IN FIDELITY BANK PLC, UNWANA, AFIKPO, EBONYI STATE

CHAPTER ONE

1.0 INTRODUCTION

The development of information and communication technology (ICT) is transforming National and Global economies. It has impacted on every facets of many nations’ economy. Every sector of many nations’ economy now uses the various types of technologies provided by information and communication technology. One sector where ICT has had great impact is the banking sector, where it gave rise to the Automated Teller Machine (ATM) and it has changed the way banking activities are conducted (Onyesolu, 2012).

With an ATM, a customer is able to conduct several banking activities such as cash withdrawal, cash deposit, cash transfer, purchase of airtime, balance enquiry, payment of electricity bills, etc beyond official hours and physical interaction with a bank staff. In a nutshell, ATM provides customers a quick and convenient way to access their bank accounts and to conduct financial transactions.

According to Khan (2010), the development of information and communication technology have enabled organizations to provide superior services for customers’ satisfaction. The number of bank customers preferring to use self-service delivery system is on the increase. This preference is attributed to increased autonomy in executing the transactions. Banks are increasing their technology-based service options to remain competitive. The ATM is an innovative service delivery mode that offers diversified financial services.

Researchers have stated that user’s satisfaction is an essential determinant of success of the technology-based delivery channel (MC Andrews, 2003). These ATMs are sometimes overwhelmed by customers requiring their services. This results in waiting lines situation or queues. Customer satisfaction has become a serious concern in service sector. In banking industry, a number of initiatives have been introduced to enhance customer satisfaction. The banking industry is globally experiencing increasing pressure to concurrently reduce cost and improve the access and quality of service it deliver, (Mwatsika, 2014).

Many financial institutions are confronted with long waiting times, delays and queues of customers. Long waiting time in any bank is considered as an indicator of poor quality and needs improvement. According to Onyesolu, Eze and Okonkwo (2006), managing waiting lines create great dilemma for managers seeking to improve the return on investment of their operations. Customers also dislike waiting for long time. If the waiting time and service time is high, customers may leave the queue prematurely and this in turn results in customer dissatisfaction. This will reduce customer demand and eventually revenue and profit.

Queues are formed when customers arrive at a service facility and cannot be served immediately upon arrival. Queuing theory deals with the study of queues which abound in practical situations and arise so long as arrival rate of any system is faster than the system can handle. Queuing theory is applicable to any situation in general life ranging from cars arriving at filling stations for fuel, customers arriving at a bank for various services, customer at the super market waiting to be attended to by cashier. Queuing theory can be applied to the analysis of waiting lines in banking settings. Most of bank systems have excess capacity to accommodate random variations, so queuing analysis can be used as short term measures, or for facilities and resource planning.

The need for the application of queuing theory to bank Automated Teller Machine services is very important because the well being and time of customers is concerned. Given the intensity of competition today, a customer waiting too long in lines is potentially a lost customer. Understanding the nature of lines and learning how to manage them is one of the most important areas in operation management. Waiting time depend on the number of people waiting before you, the number of servers serving and the amount of service time for each customer. Queuing theory provides tools needed for analysis of systems of congestion.

A waiting line system or queuing system is defined by two important elements; the population source of its customers and the process or service system. The customer population can be considered as finite or infinite. Customer behavior can change and depends on waiting line characteristics. In addition to waiting, a customer can change and depends on waiting line characteristics. In addition to waiting, a customer can choose other alternative when a customer enters the queue but leaves before being serviced, the process is called reneging, when a customer changes from one line to another to reduce waiting time, the process is called jockeying and when a customer do not enter the line but decide to come back later, the process is called balking. Another element of queuing system is service system. The number of waiting lines, the number of servers, the arrangement of the servers, the arrival and service patterns, and the service priority rules characterize that service system.

This is what is seen at the ATM service of Fidelity Bank Plc, Afikpo branch. The population source is made up of students of Akanu Ibiam Federal Polytechnic Unwana and villagers from the community. Fidelity Bank Plc, Afikpo branch has three ATMs of which three waiting lines are usually formed, one for one ATM. Most times customers leave the queue prematurely to attend to their academic activities. Some customers due to their impatience, will change or move from one waiting line to another in order to reduce waiting time. But most time customers, seeing the queue length, do not enter the waiting line but decide to either come back later or send someone else.

1.1 STATEMENT OF THE PROBLEM

Customer satisfaction is the single most important issue affecting organizational survival. It has the most important effect on customer retention and in order to narrow it down, focus on customer service quality as one of the customer satisfaction factors. Despite this fact, most companies have no clue what their customers really think.

Therefore, the problem of this work is to decongest the waiting lines at the Fidelity bank, Unwana, Afikpo, Ebonyi State by evaluating the level of congestion at the bank

Secondly, do inter-arrival and service time follow any distribution?

1.2 AIM/ OBJECTIVES OF THE STUDY

The main aim of this study is to determine the optimal characteristics levels of ATM services in Fidelity bank, Unwana, Afikpo branch.

The objectives of this research are to determine;

1.3 SIGNIFICANCE OF THE STUDY

Fidelity bank has ATM as one of its products, hence the need to find out whether they are really providing that service and what ways they can improve so as to have competitive advantage over rivals in the market.

This work will therefore provide information regarding excellent ATM service and its effects on customer satisfaction in the Nigeria context. This work will be made available to the bank being researched for the management to know the perception of their customers on services being provided to them and to help improve on service quality.

It will also benefit other business (banks) service providers to make informed decisions as far as service is concerned.

Educational institutions, corporate entities, business policy makers and other researchers will also benefit from this researchers will also benefit from this research in making informed decisions when it comes to quality customer service to satisfy the customers.

1.4 SCOPE OF THE STUDY

This research work focused on the application of queuing theory to bank automated teller machine services in fidelity bank plc, Unwana, Afikpo, Ebonyi state. It covered a period of one week (that is, from 7^th June, 2016-14^th June , 2016 ).

Service Process or Mechanism

A service mechanism is the manner in which customers are served and leave the service system in series, parallel or mixed.

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