Title page 





Table of contents


1.1 Background of the Study

1.2 Statement of Research Problem

1.3 Objective of Study

1.4 Scopes and Limitation of the Study

1.5 Research Methodology 

1.6 Statement of Research Hypothesis 

1.7 Significant of the Study 

1.8 Plans and Organization of the Study 


2.1 Literature Review

2.2 Features of ATM

2.3 Operation of Automated Teller Machine

2.4 Role of Interswitch in Automated Teller Machine Development

2.5 Reasons for Introduction of ATM

2.6 Effect of ATM

2.7 Problems of ATM 


3.1 Brief History of Union Bank Plc

3.2 Research Design and Data Collection Instrument

3.3 Characteristic of the Study Population and Sampling 

3.4 Administration of Data Collecting Instrument 

3.5 Procedure for Processing Collection Data 

3.6 Limitation of the Methodology


4.1 Presentation of Data 

4.2 Analysis of the Data Base in Questionnaire Administered


5.1 Findings 

5.2 Summary

5.3 Conclusion 

5.4 Recommendation 

5.5 Suggestions for further studies 






Banking Industry across the world aid the promotion of economic growth and development, it is the recognition of the crucial rile that has engendered a global crusade to improve the sector.  One, major area, of exploration is the use of information technology (IT) to improve banking services with the convergence computing and telecommunication automated now characterize the operation in the banking sector of the world economy. 

Automation is the use of machine instead of people to do a job or industrial process with respect to banking, it, involves the use of automatic machine and computer base device o perform banking activities in a way to increase speed, accuracy and capacity.  Automation allows bankers to get closer to their customers and deliver a wide range of service at a lower cost.  It is belief that there are four ways in which automation can be use banking industry, and they are:-

1. To perform greater expended base to be handled 

2. To reduce substantial real cost of handling payment

3. Cut the banks free from traditional constraints upon time and place.

4. Introduce new product and services 

Automation in banking industry can manifest in the following ways:-

1.) Banker automated clearing service 

2.) Magnetic ink character reader 

3.) Payment system

4.) Delivery channel

5.) Source of Information

For the purpose of the study, our scope will be limited to the automated teller machine under the payment system. Where payment system involve business transaction without cash or cheque or any other paper mode money transaction.

The automated teller machine (ATM) is a cash dispenser that is designed to enable customer to enjoy banking service without coming into contact with any banks staff.  The ratio of machine is guided through instructions programme into the machine.  Users can gain access into ATM system through a personal identification pin number give to, the customers and must be discloses to a third party.

A mechanical cash dispenser, arguably an ATM, was developed, and build by Luther George Simjian and installed in 1939 in New York city by the city bank of New York, but remove after 6 months due to lack of over 25years, Nut ill, De ta Rue developed the first electronic ATM, which was installed first in Enfield, Town in north London on 27m June 1967 by Barclays bank.

This instance of innovation was credited to John shepherd Barron, although various other engineers were awarded patents to related technologies at the times.  Shepherd.  Barron was awarded on OBE in the 2005 New Year’s honour.  The first person to use the machine was Reg verney of’’ on the buses fame, a British television programme from the 1960.  The first ATMs accept only a single – use taken 1- voucher, which was retain by the machine.  These worked on various principles, including radiation and low-coercivity magnetism that was wiped by the card reader to make fraud more difficult.

The deal of a pin store on the card was developed by the British engineer James Good fellow in 1965.


In the course of this paper answer will be provided to the following questions.

1. What is the historical background ATM

2. What are the reason for introducing ATM

3. What is the effects ATM

4. Does ATM solve any problem facing ATM in Nigeria Banking industry


Base on the above question, the objectives of the paper will be:-

(1) To discuss the history of ATM

(2) To examine the reason for introducing ATM

(3) To highlight the effects ATM

(4) To critically examine the problems facing ATM in service delivery.


This paper is examining the impact of ATM in banks service delivery in Nigeria Banking Industry so as to know the effect of the introduction of ATM in Nigerian Banking Industry.


For this study, both the primary and secondary source of data are employed for data collection. the primary source which includes the material from the bank and information from the questionnaire sent out.  While the secondary source include newspaper, magazine and annual report.


The general hypothesis that will be tested in the course of this project is as follows:

Ho: Automated Teller Machine will not have positive Impact on Nigerian Banks service delivery.

Hi: Automated Teller Machine will have positive impact on Nigerian Banks Service deliver.


This study will be beneficial to bankers so as to know the problems facing their customer in using ATM and provide solution to it.  It will also be beneficial to the customer in the sense that they will know the importance at ATM.  Generally, the public will also benefit from this study since they are all an account holder or a bank’s customer.


Chapter one contain the introduction, scope and limitation of the study, statement of the problem, objective of the study methodology and plan of the study.  While the chapter two deals with the literature review.  Chapter three contains methodology and chapter four deal with presentation and analysis of the data and finally changer five contain the findings, summary, conclusion and recommendation and suggestion for further studies.



When ATM came, on the scene in the early 1990s, it  was through to be the beginning of a new era in networking because it was both a LAN and WAN technology that could start at the desktop and go straight through to the remote office.  Its ability to provide quality of service from end to end highly praised as the perfect multimedia transport.  In addition ATM came from the telephone world, which had always delivered the highest, quality communication.

ATM never became the magic end to end solution.  ATM adaptors for the desktop were expensive and standards for interconnecting existing networker to an ATM backbone were confusing and often delayed.  When Gigabit Ethernet was announced, providing a 10 –fold, increase speed and using a familiar technology.  ATM’s demise in the LAN arena was assured.  Computer, terminal activated by a magnetically encoded Bank card  allowing customers to make deposits, obtain cash from checking or savings accounts, pay bills, transfer money between accounts, and do other routine transaction as they would at a bank teller window.  Today bank ATM’s do much more than dispense cash in present increments.  Some ATM machine cash checks to the penny, accept envelop – free deposits, and print monthly statements for mortgage, brokerage or regular banking accounts.  Some U.S Bank have programmed their machine to offer ATM customers access to all the banking services available on the bank’s internet website, effectively duplicating the bank’s website on the ATM display screen.

According to us history Encyclopedia, (2007) Automated Teller Machines (ATMs) are data terminals for convenient money transactions. Don Wetzel is credited as the inventor of the ATM.  He created the machine while working for the Docutel Company in Dallas:- Texas, during the 1960:- ATMs are actually kiosk computers with a keypad screen.  The patron is prompted with instruction and given a choice of transactions.  And optional receipt can be printed for patron record.  Banking access to accounts is provided through telephone networking, a host processor and a bank computer to verify data.  Using an ATM card a debit card or a credit card, bank patrons can electronically access their accounts and withdraw or deposit funds, make payments or check balances.

To financial and investment Dictionary (2007) ATM is unmanned location where the insertion of a precoded credit or debit card and the entry of a pin number in a machine provide access, to bank teller services, including cash.  A small transaction fee is typically charged, especially when the customer is not a client of the bank providing the service.

ATMs have eliminated the need to enter a bank for basic transactions and allow access to accounts at machines throughout the United States.  Financial institution started charging fees to use their ATMs in the mid 1990s, making the transactions very profitable for the host banks.  The use of ATMs has cut service staff in traditional banks, impacting employment in the industry.  As many machines are now commercially owned and leased in public venues a technical industry to creating leasing and maintaining the machines has developed

Columbia Encyclopedia (2007) define ATM as device used by bank customers to process account transaction.

Typically a user insert into the ATM a special plastic card that is encoded with information on a magnetic string.  

The strip contains an identification code that ism transmitted to bank’s central computer by modern.  To prevent unauthorized transactions, a personal identification number (PIN) must also be entered buy the user using a keypad.  The computer then permits the ATM to complete the transaction most machines can discipline cash, accept deposit, transfer  funds and provide information on account balances, bank have formed cooperative, nationwide  network so that a customer of one bank can use an ATM of another for cash access by 1997 there were more than 160,000 ATM across the United States.  Some ATM will also accept credit cards for cash advances.  The first ATM was installer in 1969 by chemical Bank at its branch in Rockvine Centre, N.Y.A customer using a card was dispensed a package containing a set sum of money.



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