Examining the role of ATMs on the cost efficiency of Mellat banks (Gilan)

Dissertation for Master Degree (M.A)

Internal Business Management

Abstract

Today, the use of information technology in service industries has grown a lot, the most obvious example of which is the banking industry. By using this technology, banks invent products that can provide diverse services to their customers with less manpower. The banking network of our country has made huge investments in the hardware, software and communication platforms by understanding the place of information technology in the growth and development of this industry, a clear example of which is the installation of ATMs, as the first symbol of electronic banking. But the important question that is raised is whether investing in ATM has improved the cost efficiency of banks or not. Therefore, the present research investigates the effect of the presence of an ATM on improving the cost efficiency of Bank Mellat branches in Gilan province.

The present research is of a descriptive type with an emphasis on correlation, and the data collection tool is a questionnaire and a field data collection method. The statistical population of the current research is Bank Mellat branches in Gilan province, 42 branches were randomly selected from among them and their managers and deputies completed the research questionnaires. Content method was used to determine the validity of research variables and Cronbach's alpha coefficient was used for reliability. To test the hypotheses, the regression method was used to analyze the statistical data, using spss18 software.  The results of this research showed that there is a significant relationship between the existence of an ATM and cost efficiency in the examined branches.

Key words: ATM, cost efficiency, cost management, asset management.     

2-1) Introduction

Information technology is a symbol of the present age and is growing at an increasing and exponential speed. The period of time in which we live has brought with it many electronic phenomena, among which we can mention electronic commerce, electronic banking, electronic learning and electronic management of customer relations, and finally electronic government and electronic life in general.

The purpose of providing services in banks is similar to that of consumer goods manufacturers, that is, choosing solutions that maximize the company's profit position during a long-term period.

For a bank, this includes providing optimal services in A minimum cost level. At this point in time, the country's banking system has made many efforts to use electronic payment systems in order to move towards electronic banking and ultimately reduce costs and improve services, part of which has emerged in the provision of services through bank ATM systems and sales terminals. With the development of the international economy and the competitiveness of the markets, banks have also been affected. The main force in this environment is technology, which has broken legal and geographical barriers and created new products and services. Electronics [1] is an inseparable part of the world of electronic commerce. Electronic banking is the pinnacle of using informatics, communication and information technology to remove time and place constraints from international and domestic banking services. The necessity of an efficient banking system to be present in global and domestic markets requires that electronic banking is not a choice, but rather a necessity and the bank's efforts to expand it. Due to the variety of services that can be provided by electronic banking tools and the removal of time and place restrictions in order to expand the range of banking services, in addition to reducing the cost of providing services, it increases the bank's income. In addition, the services provided in electronic banking can be done in a much shorter time than traditional banking, which reduces bank costs. Also, the purpose of providing services, including electronic services in banks, is to choose a solution that maximizes the bank's profit in the long term and increases or at least maintains the bank's share in the competitive market.In order to achieve the above goals, banks must satisfy their customers. In order to provide better facilities for their customers and increase their share of the market, they quickly equip themselves with various facilities of modern information technology (Paria. 2016). One of the electronic banking services is ATM machines [2], which has been met with excessive acceptance by the people in the country, so that on some days the number of visits to these machines is much higher than their specific capacity. However, ATM machines are one of the electronic banking services and not the whole of it. As it can be seen in Iran, other services are not well received or the amount of attention paid to them is very low, and it is obvious that if the customers do not accept the electronic banking systems, the provision of such services will face failure (Sarmadi, 2018). As the first symbol of electronic banking, ATM is widely popular for transferring funds and withdrawing funds needed by customers. Considering that banks spend and invest large amounts of money to purchase, install, operate and maintain these devices, so it is expected that the use of ATMs to provide banking services will reduce bank costs. In this way, the main question of the current research is raised as follows:

Do ATMs have an effect on cost efficiency from two aspects of cost management and asset management in Bank Mellat Gilan branches? For financial services, it is changing rapidly and customer behavior has changed compared to the previous decade. As customers move from traditional banking to electronic banking, new strategies are needed to attract new customers and retain current customers. Nowadays, many banks in the world offer their services electronically. With the integration of the global economy of our country, it will also be affected, so in the long run, we have no choice but to go electronic in banks. They prefer technology-based services over providing these services through bank employees (Joseph et al., 2009). Changes in technology and organizational structure (which is accompanied by an emphasis on improving product quality) have dramatically changed the way managers view and manage companies. Today, few companies apply the same quality regulations to other aspects of operations, while still focusing on greater customer satisfaction. These companies adopt and advance strategies based on customer service. In order to achieve balance and establish the most profitable customer service strategies, companies must have appropriate information systems to show the possible impact of different service strategies on profit.  The ever-increasing expansion of technology and electronic banking and the need to use these new facilities to join the international banking network and join the country to international organizations, including the World Trade Organization, as well as expanding banking networks as much as possible and providing new and diverse services to customers through these devices at any time and place that the customer wants are among the things that require banks to use this type of equipment. Nowadays, we come across few organizations in which the discussion of information technology has not been discussed and has not become one of the concerns of its managers (Rezaei, Jahandar, 2018). In today's world, other organizations without the use of information technology have a more difficult path ahead than other organizations of their level. It is obvious that they may lose many opportunities or unknowingly give them to competitors. It is necessary to use modern information and communication technologies in order to increase accuracy and speed in the preparation and distribution of information and the quality of communication in the organization with the ultimate goal of improving the organization and improving the quality of providing products and services in accordance with customer needs and even beyond customer expectations.