Information Technology and Developments in the Banking Sector Globally

Lewis and Davis have some answers to the question, why these changes have specially occurred in the banking sector. One influence is a change in the "real" sector of the economy leading to demands for new types of financial services. A second influence in the process of change has been that of improvements in technology. The growth of electronic funds transfer systems and plastic card-using devices has been the most obvious effect of the computer revolution. Without modern computing technology the costs involved in producing such assets could be prohibitive. Technological advances and subsequent innovations have also led to the creation of new markets.

It can be considered, that computer technology has offered a solution to an increasing banking sector by making payments faster, more convenient and cheaper to process (Howells, 1996, p462). But when computers were taken in use in the beginning at the large scale, they created some problems too. The amount of information generated was more than expected and that caused some problems in the whole industry, especially in managing (p.153). At the same time, computerisation made the jobs easier rather than interesting. Employees found their work more monotonous than it was before (Gothoskar, 1995, p.159).

The early adoption of micro-computers make banking an interesting sector for the analysis of diffusion of information technology. Diederen et al(1990) argue that "innovation diffusion is a type of economic dynamics, an adjustment of the economy to the opening up of new technological opportunities. It could be characterised as the spread in time of an innovation through certain communication channels among the members of a social system" (p. 123). They point out four different elements that are involved in the process of diffusion. First there is an innovation, which can involve a process or a product, a technical or an organisational change, an incremental improvement or a radical breakthrough. Second is communication channels, which contain two types of channels: market channels and non-market channels. Third, a social system, which contain two aspects of the social and economic context: the market environment and the institutional environment. And at last there is the time element.

Diederen et al developed a model of innovation diffusion, which is based on the notion that introduction of new technology requires accumulation of information and opportunity to learn. They have found out the importance of social and economic environment in the acceptance of new technologies. Therefore, "the availability of a more profitable technique does not imply that it will be used immediately: different techniques will be employed at each moment to produce a certain product" (p.138). They also found out four important factors to a firm, when it considers the virtues of a new technique: the risk of adopting a new technique; the extent of its present use, relative to its potential use (competitive force); the efficiency benefits; and the technical barriers to be overcome when the firm adopts the new technique (p.131).When banks are making decisions on their own technological directions of the future, all of these factors have to be considered.

As mentioned above, there is a high rate of information technology in the banking sector. But how has this new technology been diffused in the world of banking? Baba and Takai have made a case study in Japan and they have found two different kinds of phases in this introduction process. At the first phase, the mid-1960s, the introduction was somewhat fragmentary, limited to individual operations of parts of the accounting system, and confined to an intra-bank networking range. The second phase, the mid-1970s, on-line enabled the banks to systemise each unit of there accounting systems, and the range of networking was now inter-bank (Baba & Takai, 1990, p.143). During this second phase, new services, like the automatic teller machine, appeared on the market. "Through processes of incremental modification, the banks were able to provide their specific business operations with a good deal of user-friendly software. Generally speaking, the banks' computerised routines were devised to develop mainly on a bank-specific basis" (p.144).

It is argued that technological progress is marked by a series of discrete barriers and breakthroughs, which create new fields of technological opportunity (Ayres, 1988). Ayres mentions that the laws of nature play the most important part of this progress. (p.1). He continues, that "the technological life cycle can be defined as the period from a major breakthrough which opens up a new territory for exploitation to the next major barrier". In recent decades, progress in many fields has been limited by lack of computational or information processing ability, but breakthroughs in microelectronics solved most of these problems in banking sector also. According to Ayres, it is often a technological breakthrough in another field that opens up new opportunities for innovations (p.98).

Ayres has also found some interesting topics about the technology life cycle. He argues that there are continuous changes between the balance of push and pull during this life cycle (p.108). In the beginning of this period, technology push is quite important, but there are some cases, for instance Say's law, saying that supply creates its own demand. Later in the life cycle, pull takes over. During this period it is important for entrepreneurs to find "an optimum balance" on the markets (p.108). After this period, the effect of pull declines too. This kind of trend is a common one in banking sector, where new techniques and technologies are supplied, continuously by some high-technology based firms. A good example of this was the introduction of EFTPOS-machines in Finland in the middle of 1980's. When banks noticed the qualities and possibilities of this new technique, "pull took over", and a new era of banking services began (source: interviews).

The new technology has to be considered and designed carefully, before it can be taken to use at large scale. Howells has studied the designing process of the European Payments System (1996). He argues, that a great deal of designing process is made by some bank working group or some steering committee, which are responsible for trouble-free systems or products (p.456). Those bodies usually find that the range of design choices creates the possibility of redesigning key commercial relationships between themselves and between banks, customers and detailers. Rosenberg mentions some qualities for successful product design. There are things like the relative scarcities of inputs, the availability of complementary technologies, the particular historical sequences, and the preference structures of firms and customers (Rosenberg, 1994, p.3). Rosenberg mentions also, that there is a lot of testing, redesign, modification and re-testing during this designing process. These expensive and time-consuming development activities are important aspects to understand performance characteristics and reliabilities of those new products (p.13).

And this paper consists of some important innovations, especially innovations in banking sector. The underlying idea is, that innovation is a result of the evolution of dynamic competencies. Technological change, learning and interacting necessitate educational skills and competencies. Therefore, the whole process of innovation involves investment in skills, educated employees and R&D, and results again in faster technological change and accumulation of internal capabilities (Leiponen, 1996, pp. 9-11). Rothwell (1977) and Rothwell and Walsh (1979) found out two important factors in the innovation process. They argued that understanding the users needs and good communication and effective collaboration are the most valuable information inputs for the innovators. By understanding these factors, the door to the success of an innovation is open. Kline and Rosenberg (1986) argue that both supply and demand are important factors in this process. They have also found out that the coupling of technology and market is worth of consideration if an innovation is going to be successful. Coombs et al makes a conclusion saying that innovation is a very complex process and it is very difficult to think about some specific factor that is more important that the other factors in this process (Coombs et al, 1989, p.102).

What is then the role of new innovations, and most of all, what is the impact of them? These questions are discussed by Rosenberg in his book. He mentions that the strength of new innovations will depend on their backward and forward linkages (p.76). Backward linkages, like expenditures for buildings, machinery, equipment, and raw materials, such that the initial innovation and investment requirements play an important part in the decision making process in the production of goods sector. Forward linkages, like a reduction in the price of the products, an expansion in the size of their market, an expansion in the rate of capital accumulation and output growth, are only few examples of these linkages. It might also happen, that these innovations induce the creation of whole new products and processes, in other sectors as well. Rosenberg mentions also, that an innovation from outside will perhaps not reduce the price of the product, but it makes possible wholly new or improved products or processes.

The world of banking differs quite a lot in different countries. In case of U.K and India, the differences are much bigger than one might even think of. Banking services have developed during a long period of time to fulfil needs of just only specific country. To understand the differences between countries, Rosenberg has found out some "needs" which play different roles in different countries (p.111). Differences in the resource endowment and demand conditions of an economy are showing the way, what kinds of inventions it will be profitable to develop and exploit. Each country has its own visions about what is important and what might be worth of developing just in that specific country. Rosenberg argues, that only those inventions that are compatible with a country's needs would be successful ones. At different times, there are some innovations that are easier to create than others, and there might be some great differences between other countries. The level of technical knowledge, as well as economic forces tend to push economies in different directions.

3. DEVELOPMENTS IN PAYMENT SYSTEMS AND METHODS

Very important long-term technical changes are beginning to affect the payment systems, especially the continuing decline in computing costs and the physical size of powerful computer chips, along with the associated spread of powerful telecommunications technologies. The widespread availability and acceptability of computers both at home and in the offices has accelerated the process. At the same time, the cost of communications has been falling dramatically, broadly opening up markets world-wide. These trends have a marked impact on the payment systems and they offer potentially significant avenues for improvement of the efficiency of existing arrangements and for the creation of new payment mechanisms.

In this section a brief description of the development in payment systems and methods in the banking industry are introduced. A brief history of payment systems describes the main points of its development, beginning already from the seventies. A short introduction of payment methods is also included, to describe how the "money" we use has developed during the years and also to help in illustrating the increasing role of information technology for such a simple thing as "money". The following case studies are included in this study to show the diffusion of these new payment methods.

3.1. Payment systems

"Payment system - a set of instruments, banking procedures and, typically, interbank funds transfer systems that ensure the circulation of money." (European Monetary Institute, 1997 - p.206)

Payment systems constitute part of the basic structure of a country's economy and financial markets. A payment system includes payment instruments as well as the various facilities required for transferring funds. Payment systems fulfil a variety of tasks, such as the payment of households' daily purchases and bills. Payments of businesses and public sector entities, as well as the handling of inter bank payments and transactions between residents and non-residents. On the one hand, the payment systems process a large number of small-value payments, and on the other, they handle a small number of large-value payments with special requirements for safety and speed. Small-value payments normally involve day-to-day payments by households and small enterprises, whereas large-value payments often involve banks' and industrial firms' foreign exchange, securities and money market transactions as well as some trade-related transactions. (Hirvonen et al, 1992)

The significance of payment systems as one of the basic pillars of the financial markets has grown as the production of goods and services has come to rely increasingly on specialisation and trade. So their importance is being further enhanced by the process of international integration are currently under way. Efficient and reliable payment flows are an essential requirement for the successful functioning of today's market economies. (Hirvonen et al, 1992)

A starting point for development of new payment systems happened in the middle of 1970's, when a common on-line based system was created between different banks. A few years later, it became fully automatic, which made it possible to transfer daily payment information in a machines readable form. This new system created a ground for new payment services for customers, because all banking affairs could be done through a one specific bank. The reference bank giro was the first service using this new technique (1979). This new system required also more effective computers and better software to make it possible to handle all information. (EV-Kehitysyhtiöt & Fistec, 1989)

Historically payment system, transactions were exclusively provided by the banks. However, the dominance of small payment systems by the banking industry is being challenged by a nascent industry reacting to consumer demands. Today many non-bank entities provide these services. In fact, the competition for the provision of payment system mechanisms "has turned monetary value transfer into a commodity." The banking industry has trailed other industries in developing and offering electronic money payment systems for small-value transactions. For example, mass transit and telephone companies have offered stored value card technology for nearly a decade. (Heinonen, 1989)

Electronic payment systems developed for transferring bank payments between the banks are becoming increasingly common in all the industrialised countries. They speed up payments transfer and improve the quality of payment transmission. Compared with traditional methods of transmitting payments, the new systems involve significant economies of scale and rationalisation gains. It would hardly be possible to increase the volume and value of payments at the present pace without corresponding advances in payment technology. At the same time, the implementation of new payment systems is helping to enhance the planning and monitoring of bank liquidity. As the systems require large investments, they also call for co-operation between banks and participation by the central bank. The payment system is a complicated and complex institution of society, which changes along with technological and social progress. (Hasko & Lahdenperä, 1992)

The payment system's enabling mechanism is of particular importance because of its wide use as a means of payment, its availability, its universal acceptance, and its geographic dispersion. The role of a reliable and efficient payment system as a competitive factor has grown along with the internationalisation of economies. A payment system must not only be secure and sound, it must also be cost-effective and compatible with systems used in other countries. The more efficient the payment system is, the less economic resources it ties up.

3.2. Payment methods

In case of payment systems, banking sector has succeeded well by coming up to expectations set by the fast developing market needs and other areas of society. Globalisation and faster communication have caused some changes in payment methods, too. Credit cards and travel cheques, as well as internet payments in our days, have been some solutions from banking side to secure its position in financial markets. Many of these innovations have opened up new markets and have had great effects in the whole society. Take credit cards for example, they introduced cashless shopping. A couple of years later, when a credit card company VISA started operating world wide, there was no need for currency when travelling. Due to plastic card, the financial market opened up some new dimensions for their customers. This was the beginning of global money. The following chapters describe some payment methods which are in use nowadays. These methods have also got influences from the developing information technology, as we can see. Cash and cards are not the only methods nowadays, like they were ten years ago. The competition is hard among these new methods.

3.2.1. Cash and Cards

Money is a media that people are willing to accept for the goods, securities, and services that they sell. Money serves three purposes. First, money serves as a media of exchange. Because people readily accept money in trade for goods and services, transactions are greatly simplified. Second, as a standard of value, money serves as a measure for the value of a good or service and therefore provides a standard for making comparisons between different goods and services. Finally, money functions as a store of value. Money can be saved and used in the future. (Saarinen, 1996)

Cash dominates the global payment market. Cash offers both privacy and anonymity because traditional currency does not contain information that can be used to identify the parties or used to determine the transaction history. Every day of the year, millions of cash payments are made around the world. Within the global payments market cash accounts for approximately 90%, of all transactions (about 95% in U.K. Source: European Monetary Institute, (1996) p.582). Other payment methods typically require some form of clearing and settlement-impossible for private individuals, impractical for small value payments and expensive for small retailers. (Eriksson & Kokkola, 1992)

In u.k, the availability of cash has also increased over the last decade, thanks to the growing number of ATMs. Individuals can make cash withdrawals at any branch of any bank, irrespective of the bank at which the account is held. Cash withdrawals are executed through two networks, Bankomat and Minuten. In mid-1994 the banks, with the exception of one major bank, came to an agreement to connect the two networks. The inter-linking between these two networks was completed in the autumn of 1995. (European Monetary Institute, 1996 - p.582)

Payment cards comprise bank (debit) cards, credit cards, combination (multifunction) cards, charge cards and euro-cheque cards. ATM cards (including cash cards) also belong to the range of instruments that can be used in connection with bank accounts. In terms of technology the cards can be divided into basically magnetic stripe cards and smart cards. There are some significant differences between one kind of card and another. A credit card allows you to pay via instalments and/or a revolving line of credit, with the limit set by the issuer. Generally, if you pay the entire bill at the end of the month, no interest is charged. If a balance is outstanding, interest is charged at a predetermined annual percentage rates that differ from issuer to issuer. A debit card is directly linked up to your checking or savings account, and the amounts of your purchases are deducted directly from it. In fact, a debit card functions as a paperless checking account.

In India, the use of cards as payment media has grown gradually over time. From the available statistics, it is fairly evident that traditional credit cards have never played an important role in the Indian payment system, and, moreover, that their significance has diminished over the last few years. Instead, debit cards have gained in importance, most notably debit cards linked to bank accounts and known as bank cards in India. They usually combine several functions: those of a debit card for paper-based as well as EFTPOS (Electronic Funds Transfer at Point Of Sale) transactions, an ATM card for cash withdrawals, and a credit card, to the extent that the bank account to which the card is linked has an overdraft facility attached to it. (European Monetary Institute, 1996 - p.583)

Cash, cheques and credit cards, they have all had an enormous impact in our daily life. When credit cards appeared in the market, in the beginning of 1980s, it was something new. When people found out how practical they were, cards became popular very fast. Credit cards have succeeded in keeping their leading position all these years and I suppose, that they will continue to be one of the most common payment methods in the future as well.

3.2.2. Electronic money

Despite the rapid growth of the Internet and online services, there will be a need for cash in the future. But what do we mean with cash after ten years, it might be something else than coins and paper money. The small-value transactions will be the big question. Nowadays the use of a payment mechanism called electronic money is increasing rapidly. Many banking people and analysts think that electronic money is the solution in the future.

"Electronic money products are defined as "stored-value" or "prepaid" products in which a record of the funds or "value" available to a consumer is stored on an electronic device in the consumer's possession." (Bank for International Settlements, 1996)

Electronic money is a payment mechanism that is a direct substitute for traditional cash; value is transferred electronically to pay for goods and services at vending machines, retail establishments, over networks, or through direct person-to-person exchanges. It has been suggested that electronic money is likely to "lead to a new concept of pocket money, give birth to a new commercial payment system for the Internet, change the way governments pay out benefits electronically, and revolutionise the movement of value over telephone lines and airwaves." The use of electronic money in low-value, high-volume transactions opens up a wide variety of new services and changes the way in which old ones can be delivered. (Pauli & Koponen, 1997)

3.2.3. A case of Stored Value Card

Stored value cards, credit card-sized devices, also known as "smart cards," are electronically encoded with value using an integrated-circuit chip embedded within the card. The stored value may then be drawn down at will, by the user to effect purchases. The smart card concept is the electronic equivalent of carrying a wallet full of cash. The card may be disposable or capable of being replenished with value. Current technology enables value to be replenished through an ATM terminal, a telephone equipped with a card reader, or a personal computer equipped with a card reader. Consequently, stored value cards provide a secure offline transaction alternative in environments where online processing is time consuming and expensive.

The use of electronic money could influence the level of costs, benefits and risks facing consumers in their day-to-day economic transactions. Potential consumer benefits could include the availability of lower cost, faster and more convenient means of payment, as well as increasing the diversity of payment options available to consumers who have a diversity of preferences and circumstances. Those who object to visions of a cashless economy often stress the continuing need for currency. The advent of smart cards makes this argument less tenable. Indeed, low-value, frequent transactions are those for which stored value cards are ideally suited. (Group of Ten, 1997)

Smart card pilot projects of various designs have been started since 1995 in most European countries, including Belgium, UK, Austria, Germany, the Netherlands, Denmark, Finland, and Switzerland. Involved are (besides banks and credit card companies) retailers, telecommunications, and public transportation industries. Before they come into wide-spread use, an extensive infrastructure of terminals has to be installed. (European Monetary Institute, 1996.)

Table 1. Use of Electronic Money

Cards,

(1000)

Transactions / month, (1000)

Cards /

person

Transactions / person / year

Transactions / card / year

Quick (A)

3000

25

0,429

0,043

0,1

Proton (B)

60

200

0,016

0,238

5

Danmont (DK)

790

310

0,144

0,676

4,7

Avant (FIN)

417

214

0,08

0,514

6,2

Chipknip (NL)

60

80

0,004

0,064

6

Monedero (E)

50

56

0,001

0,02

3,37

Cash (CH)

2000

60

0,286

0,103

0,36

Source: European Committee for Banking Standards, Overview of European Electronic Purse Projects.

The table above shows the use of electronic money in some European countries. As we can see, it has not become a very popular one payment method. There are not so many shops accepting these new cards, so people still carry cash with them and use it too. One thing, which might play a little role from my point of view, is that re-loading your smart card costs in Finland 2 FIM (=3 SEK). My opinion is that it has to be free when you use your money. There is still a lot work left for those, who will make these new cards more common ones.

"In India, the use of prepaid cards or smart cards has been limited, with the exception of public telephones. However, the market interest in prepaid cards is growing, and various system designs are being discussed by banks and other institutions. In today's India, there are some retailers that offer their cardholders the possibility of "prepaying" for their purchases by opening interest-bearing deposit accounts linked to their cards. These cards are now quite widely used by a large number of households." (European Monetary Institute, 1996 - p.584)

At this moment, it looks like the future of electronic money is full of possibilities. If the majority of sellers and buyers will begin to trust the security of electronic money and when they realise how easy it is to use, there will be no limits in the future. The service providers will have a possibility to make business world-wide, without any high billing and banking costs. It might be possible that in the beginning of the 21st century, the "CyberBucks" are competing with cash and after that year after year, it will pass the cash. The new era will begin, the "e-money" -era.

3.2.4. Internet payments

The most important characteristic of Internet payments is its trans-nationality; "digital" cash has no national borders, that is, it is not controlled by any central bank of any nation state. If digital cash circulated only within a traditional national border and was controlled under a central money authority, there would be no economic implications, because, in that case, digital cash would be nothing more than a convenient transaction method such as a credit card or prepaid card. But, in reality, digital cash has no national borders, a fact which will bring both new benefits and new problems to economy as a whole. (Tanaka, 1996)

The Internet and World Wide Web have dramatically boosted interest in network payment systems and digital cash and increased their significance. The technical challenges are tougher because payment systems must now work over world-wide open "best-effort" networks and serve new kinds of businesses and payment models made possible by such universal network connectivity. The opportunities have attracted a wide range of players, from big and established organisations such as MasterCard, Visa, Microsoft, and the major banks, to newcomers such as Digi-Cash, Cyber-Cash and First Virtual, to name only a few. There will be more than one way of paying for something on the Internet, so it will be interesting to see, which will be the most popular one in the future. (O'Mahony et al, 1997)

All of these new types of payment methods, Internet payments, contain both good and bad features. All these methods are based on a slightly different kind of technique than the others, and there is a continuing movement of entries and exits of these methods at markets. It seems that all of these new innovations have a common barrier security. The ones who solve this problem will survive. Customers and banks are setting demands on security. They want to be sure that the new method is functioning without problems and they want secure their money all the time. Nowadays when Internet and Internet payments are rather new ones, there has not appeared a method, which is so much better than the others, so far.

3.2.5. A case of E-cash

Payment from any personal computer to any other workstation, over email or Internet, is now becoming reality using electronic cash technology. Digi-cash, E-cash is the first of its kind to be used in Europe. The system consists of a kind of virtual ATM from which the user withdraws money in an electronic format onto his computer's hard-disk and can spend it from there at shops on the Internet. With the aid of E-cash small purchases, such as buying a desktop wallpaper or getting some derivate price-information analysed, up to 20 USD are easily done on-line over the Internet. All this can be achieved without the customer having to reveal his identity or any credit card information. <Digi-Cash>

In October 1995 Mark Twain Bank in St. Louis, began providing a limited number of accounts for conversion from conventional money. By now, the system is fully operational. The E-cash denomination is US Dollars but the bank's multi-currency facilities allow transfers by check or wire from many countries. Merchants include used car dealers, health food and software houses, Internet providers and several online malls with dozens of shops, mostly in the US but also in Australia, Denmark and Sweden. E-cash users can buy music CDs, translation services, sunglasses, Australian sheepskin, or the services of a dating agency. <DigiCash>, <Mark Twain Bank>

The second E-cash system went live in Finland in March 1996, supported by Merita Bank and operated by the Internet provider EU Net. At the end of August 1996, there were more than a dozen shops providing services in Finnish Mark denominated E-cash, including weather information and screen savers, real-time financial market information on stocks, options and futures. A third E-cash pilot project was announced in May 1996 by Deutsche Bank. They expect to learn from the operating systems in the US and Finland, but also see differences regarding the target groups in Germany. Therefore, the pilot project intends to bring the supply and demand side for electronic commerce together and provide them with a payment system. Next in line might be Sweden, where the Swedish Post holds the accounts of over 75% of Swedish households has licensed Ecash. EUNet is also preparing Ecash systems in other countries and other currencies, including the ECU. Then, also currency conversion will become possible. <Deutsche Bank>, <EUNet>

3.2.6. Other developments

Prepaid cards were initially developed as a single-purpose payment instrument for which the card issuer and the goods or service provider were one and the same (e.g. telephone cards). Further innovation in this area has resulted in the development of the multi-purpose prepaid card or "electronic purse", which can be used at the outlets of several service providers for a wide range of purposes.

Visa is working on a microchip based stored value card a convenient and safe alternative to cash and coins for transactions less than US$10, such as those made in fast food restaurants, convenience stores, vending machines, gasoline/petrol stations, pay phones, road and bridge tolls, public transportation, video games, school cafeterias, and cash lanes at supermarkets. Another kind of card, Visa Interactive, will provide armchair banking; an on-line alternative to signing checks and licking stamps. You will be able to electronically access your accounts and access numerous electronic banking services such as funds transfer, balance inquiries, transaction data, and e-mail. You can access your bank anywhere through a continuum of access platforms including the touch-tone phone, screen phone, PC, and Personal Data Assistants and Communicators. <VISA>

4. DEVELOPMENTS IN BANKING SERVICES

Before financial institutions offered full-function ATMs, tele-banking, screen phones, and PC/home banking, consumers conducted their financial business in local branches. Customers interacted face-to-face with a branch customer service representative to open new accounts, obtain service, or resolve problems. Customers knew if there was ever a problem with their account, they could return to the representative and fix it. The consumer's relationship with his or her bank was as much a personal one as a business one. The face-to-face service construct engendered trust and loyalty.

Due to changing consumer preferences, consumers increasingly began to utilise self-service banking channels. Customers have embraced the first self-service offering from financial institutions - the ATM - as well as its technologically advanced relatives: telephone banking and PC/home banking. Typically, the self-service consumer is more sophisticated, better educated, and most importantly, more time-starved than the average customer. The result is a customer that physically visits the local branch less and less. Customers have their own bank at home.

In this chapter some most important developments in the banking services are introduced. The study concentrates mainly on the effect of the development of information technologies. The more specific introduction of Automated Teller Machines is also given. When the previous chapter dealt with payment methods, this chapter includes some important developments in the banking services sector, particularly in self-services.

4.1. History

The role of information technology has grown and changed continuously in the banking sector. The banking industry has used IT to enable increases in the volume of transactions as well as the development of new products; applications have ranged from back-office (check and accounts) processing, mortgage and loan application processing, and the electronic funds transfer to more strategic innovations such as automated teller machines and new kinds of securities. The use of IT has also had some important customer - supplier effects. For the customers of service providers, It has been used to improve the quality and variety of services in many industries, especially through its ability to amass, analyse, and control large quantities of specialised data (National Research Council, 1994, p.17). Such improvements include error reduction or increased precision, faster or more convenient service, and improved security, safety, and reliability.

The banking industry is a major factor in the economy. Although it has grown at a moderate rate over the last two decades, the most significant changes in this period concern its character rather than its size. For most of its history, banking has been subject to extensive federal and state regulation. However, partial bank deregulation in the late 1970s and early 1980s led to a sharp increase in the variety of services and products offered by commercial banks (National Research Council, 1994, p.81). Driven by both technology and competition from non-bank financial institutions, increasing product diversification continues today in commercial banking, although it is still constrained to some extent by current regulations.

Given the magnitude of the banking industry's investments in IT over the last two decades, large increases in productivity might have been expected. One reason these have not appeared in measures of productivity is that such measures in the banking industry remain highly problematic (National Research Council, 1994, p.81). For example, the 24-hour availability through automated teller machines of many deposit and withdrawal services previously accessible only during bank hours. A second reason for the lack of large increases in measured productivity is that early applications of IT proved to be costly and cumbersome (India times, 1994, p.81). Software and equipment had to be updated and replaced frequently. A great array of new products constantly called for new software and communication capabilities. Cost control and productivity tracking systems lagged behind the new technologies in a rapidly changing marketplace. The result was that tangible paybacks from IT investment were delayed.

The following examples are taken from the banking world of Finland, which is one of the most advanced in the world. The systems and connections between banks have based on the use of information technology for a long time. In the 1960's information technology was used to raise the cost-effectiveness. In the 1970's information technology was used as a strategic competitive possession and in the 1980's it (IT) became a key-factor in creating new services.

960s: It was an increasing amount of transactions in the banking sector in the 1960's, which created a growing demand for new personnel. This increasing amount of personnel was one of the main reasons that forced banks to use the automatic data processing. The competitiveness was developed, by improving the effectiveness of business. There were two main aspects that played an important role in this process: one was the requirement of personnel and the other was the cost-savings, which became possible by simplifying the routine-based work. Also by computerising these basic routines it became possible to develop some new types of services. One of the first services was so called "wages and salaries direct to bank accounts", which helped people to familiarise with bank services in their daily businesses. This new service led to a rapid growth of banking customers.

970s: The 1970's was a decade, when banks changed-over to the real-time data processing systems. A large percentage of paper-based transactions were transmitted and processed electronically. Automated Teller Machine services and direct electronic deposits and withdrawals by large automated users replaced many paper processes. As new products and services expanded, and as margins became less predictable, commercial banks began investing in front-office automation to provide better information to personnel related to customer service and to enhance the delivery of products and services. The amount of transactions increased much faster than it was expected, so the real-time system was the only alternative to keep the amount of personnel constant and to hold down the increasing costs of handling information and the operating rooms.

980s: Banking services for private customers largely consist of personal service, supplying bank-notes and providing payment services. In the 1980's, it became possible to serve customers outside the bank-office in the form of self-service. This kind of self-service has provided a new and a flexible way to customers to conduct their banking affairs. The reason for this fast growing self-service have been short opening hours at bank offices, rush hours at specific times, the huge amount of withdrawals (about 50% of all transactions) and also an attempt to keep down the rising costs. The first step in self-service was the automated teller machine.

In the late 1980s, the banking industry began to focus on automation of data communications. The installation of on-line terminals in the early 1970s enabled automation of the customer interface and front-office applications in such areas as corporate treasury. ATMs, first introduced in the late 1970s, have become an agent of a strategic change in banking.

990s: The last ten years of 20th century have been characterised by a rapid growth of personal computers. Personal computers have become very common ones and have created a demand for new types of banking services. Home banking by using computer is the newest service for banking customers.

(Source: Lehti & Kari, 1996, p.122-134; Hirvonen et al, 1993, p.88-107,)

4.2. A case of Automated Teller Machine (ATM)

"The ATM is the cornerstone of self-service banking. It gives vending-machine convenience to consumers for deposits and withdrawals of cash - transactions that have historically played a key role in bank branching decisions." (Lipis et al, 1985 - p.28)

The first self-service equipment, which was installed in the mid-1970's, consisted of cash dispensers that were separate from other activities. ATMs of the type currently in use with on-line links to customers' account data were introduced in the early 1980's. Towards the end of the 1980s, note dispensing cash machines were joined by self-service machines that were capable of paying bills and printing out bank statements. The range of services has subsequently been complemented by ATMs that exchange foreign currencies and count and dispense coins. In addition, banks' self-service branches are equipped with self-service terminals that dispense information. (Hirvonen & Keskinen, 1992)

In U.K, banks began to implement a bank bar code system from late 1993 onwards in order to rationalise the giro system. The payee pre-prints the bank bar code on the giro form that is sent to the payer. The code contains all the billing and payment information necessary for the payee to recognise the payment (account number, reference number, due date and amount of payment, etc.). The coded data in form of barcode is read and payment is made by passing the giro's bar code through a code-reader installed in an ATM or bank terminal. The system reduces manual work and mistakes, especially erroneously entered reference numbers, and thus speeds up the input process. (The Finnish Bankers' Association, 1997)

4.3. Problems with Automated Teller Machines

When a new technological innovation appears to the markets, it usually faces all kinds of challenges. There are both social as well as technical factors that need to be considered (Utterback, 1994, p.74). In the world of banking it is often so, that as long as theold and familiar bank-services are easily available, interest in new technology in form of automatic services is strongly limited (Lehti & Kari, 1996, p.123). Even today, many private customers find some automatic services difficult to operate (source: Interviews & Questionnaire). When ATMs appeared, some people were scared that they might lose all their money or machine might take their cards. Especially it was difficult for older people to accept this new technique and these new advantages of them. It was not so easy to trust a new technology.

In the beginning of ATM era, the climate was a big problem here in Scandinavian countries. The new technology, often imported from warmer countries, was not enough temperature resistant as it was required to be. Temperature differences sometimes 60 degrees during a year, was too much for these high technology based machines. This problem was solved by installing ATMs inside, the shopping centres or placing them in the entrance hall of bank offices, which were open around the clock. But for ATMs to have a possibility to serve customers day and night, it was necessary to make some big changes inside the computer centres of banks. These centres were not able to deal with so much information. So, ATMs stayed closed few hours a day. This problem was solved by increasing computer power in these centres and by expanding the use of real-time applications (Source: Interviews).

When a new product technology enters to the market, it is often expensive (Utterback 1994 - p.92). The production of this technology is small-scale and is located near user or source of innovation, which in this case are industry pioneers and product users (p.94). In the case of ATMs, banking groups bought and installed their own machines by themselves. These ATMs worked only with specific ATM-cards given by a certain bank. After a couple of years it was found out, that it was too expensive for banks to have their own ATMs and cards. The solution was common use, which made it possible to use all ATMs with any ATM-card (in the middle of 1980s in Finland and about ten years later here in Sweden).

When the above improvements within ATM technology were realised, the whole system became so much better that popularity of ATMs started growing rapidly. Step by step people found out the good qualities of them; it was easy and safe to use them, and the most important one, it was always open. Due to ATMs attracting more and more customers, queues in the bank offices shortened dramatically. Now the banking personnel started to be worried about losing their jobs, because one of their most common duties was dispensing cash to customers. However, such fear was unnecessary. Instead of decreases of human resources in the bank offices, personnel found themselves to be re-trained for managing problems created by ATMs. The lines went down during transactions, cards were swallowed by the equipment, notes had to be filled in the machines, papers for printing alike, users claimed that they did not receive all the money they specified. Only to mention a few new every day issues that personnel had to be able to deal with.

4.4. Automated Teller Machines today

The network of ATMs offers a new alternative way in our daily banking affairs. It is estimated that over 80 per cent of the bulk services provided daily by banks could be automated or handled on self-service basis. The ATM represents an effort by banks to bring their services closer to the people. It has value to consumers through its ability to increase time and place convenience for the routine banking functions of obtaining cash and making deposits. To the bank, the ATM offers a more cost-effective means of delivering these routine functions and frees branch personnel for selling services with a greater return. (Kontkanen, 1991)

The rapid spread of ATMs, from which cash can be withdrawn round the clock, has boosted the use and competitiveness of cash. This has happened primarily by improving the availability of cash since an ATM can be thought of as a new service outlet for a bank. As a result of the expansion of the service outlet network, i.e. of the combined sum of traditional bank offices and ATMs, it is estimated that the public now withdraws smaller sums than before from deposit accounts but at more frequent intervals. (Kontkanen, 1991)

After all of those developments, occurred in a world of ATMs, it can be considered that the ATM has been a radical innovation. It was an example of how a radical technological innovation can emerge and successfully invade the established technology in almost any circumstance. Maybe the biggest benefit was, that cash can be withdrawn 24 hours a day. ATM was also easy to use despite of its technical qualities. Like Utterback writes, "radical changes create new businesses and transform or destroy existing ones" (Utterback, 1994 - p.158). ATM was exactly something "new" in the 1970's, it was a combination of high-tech and money - people's own money inside a strange machine. Maybe it was that combination, a worry about own money and excitement before each withdrawal, which made ATMs so popular as they are today.

4.5. Home Banking

Banking services are increasingly being used directly through customers' own data systems or banks' self-service terminals. The range of services offered varies from bank to bank, and services are expanding all the time. The exchange of data in machine-readable form reduces both the customer's and the bank's overlapping working routines and the number of mistakes occurring at work. The use of electronic banking services is not dependent on time or place. The customer can handle his banking transactions at a time that is convenient for him, irrespective of the bank's business hours.

4.5.1. Tele-Banking

Telephone Bill Payment (TBP) is a funds transfer service that allows consumers to pay their bills by contacting their financial institution and authorising it to debit their account and transmit funds to the payees they specify. The TBP user benefits from the convenience of being able to take care of a number of transactions with one telephone call rather than having to write checks, match the remittance documents, place them in envelopes, and address, stamp, and mail them. Nowadays, having agreed on the use of the telephone service with his bank, a customer may, for example, arrange an automatic payment service, negotiate loans or matters relating to deposits, pay bills or ask for the account balance or details of the latest transactions by telephone. (Lipis et al, 1985)

One might think that this is a perfect solution to make some business with bank, but telephone banking contains some problems too. During an important transaction, there might be some disturbing factors in telephone lines, so that the whole connection goes down. How can the customer be sure that the transaction has been successful? Another problem which has become current nowadays is security. Banks and telephone companies have been developing different kinds of methods to make sure that customers can be safe. There are really big differences in the length of password between banks. In some cases it is only three digits, if you know the identification number of a certain person (HSBC, India), and in other cases the length of password is up to sixteen digits (HSBC, U.K). It is suspected that longer passwords might cause the discontinuation of telephone banking.

4.5.2. Personal Computer (PC) Banking

The continued development of the personal computer has given many households the opportunity to conduct financial transactions from their homes, or indeed from any location where they can connect their portable computers to telephone networks. Through the use of special software and a modem, they can connect to the system used by their financial institution to examine accounts, issue orders to transfer funds among their own accounts, issue orders to transfer funds to the accounts of other parties (e.g. to pay bills or send funds to others), and apply for loans. (Lipis et al, 1985)

In some cases, households dial a number that connects them directly with their financial institution. In other cases, households connect to their banks by using the Internet. After gaining access to the World Wide Web portion of the Internet through their Internet service provider, households go to the Web page sponsored by their bank and conduct their business.

Most retail electronic banking involves transmission of information over relatively protected telephone networks or limited access networks of computers called intranets. To date, such systems have not given rise to significant security breaches. The widespread availability of powerful home computers poses the risk of financial crime, creating incentives for maintaining tight controls and security systems. Strong security systems will be especially important for successful banking and commerce over the more open Internet, where packets of information can pass through a number of computers, each one accessible to a large number of people, before reaching their final destination. (Hirvonen, 1989)

It was in October 1995 when Sparbanken Finn began with their PC Banking ("Datorbanken") in Lund, Sweden. It became possible for customers to do banking affairs when they had time. Datorbanken allows you, for example, to pay and track bills electronically, download your personal bank and credit-card statements, transfer funds, and conduct key financial transactions at home, 24 hours a day, seven days a week. In the beginning it was only a PC that was needed. Nowadays it is possible to contact to the bank via a special designed Screen-phone or via Internet. Internet made it possible to use Datorbanken anywhere in the world. You only pay the charge for the local calls. (Sparbanken Finn, 1998)

5. ANALYSE ON QUESTIONNAIRE SURVEY

The main reason for this questionnaire survey was to find out, how do banking customers perceive the use of ATMs. Have there been any changes in customers opinions during those years, they have used these machines, and if so, what kind of changes and why? Another thing is to find out if there are some kind of trends in this process, and if there is, what are those trends? An interesting question was as well, if there are some differences among customers who use ATMs more often and customers, who perhaps need ATM services only once a week or once a month. Also the security of ATMs have been an important issue during the last five years. There have been more and more criminality against ATM-machines and against people who use them. Because of this increasing criminality, the questionnaire survey consisted some "safety" questions as well.

This questionnaire consists 85 responses, 44 from Sweden and 41 from Finland. 50 questionnaires were sent, or delivered, in both of these countries, so the frequency of responses was 88% in Sweden and 81% in Finland. Repliers were not chosen by using any kind of academic questionnaire rules or methods, so the results of this survey do not give a general picture of the situation of these two countries.

This survey consists responses from Sweden and Finland, so it might be possible to find out some similarities and differences between these two countries. Are there some differences in customers' perception of ATMs in these countries and if there exist some, what are those? In table 2, two responses have not been useful to this study, so those have been taken away. Otherwise, this analyse consist all responses I managed to get.

Table 2. User-friendliness in accordance with years used.

(4) How user-friendly do you find ATM?

User-friendly *

Cannot say

Not user-friendly **

SWE

FIN

SWE

FIN

SWE

FIN

(1) How many years have you used ATMs?

New users

(<10 years)

64%

37%

3%

2%

33%

61%

Old users

(10< years)

46%

83%

7%

0%

37%

7%

Average

55%

60%

0%

%

35%

39%

* User-friendly includes both "Very friendly" and "Friendly".

** Not user-friendly includes both "Not so friendly" and "ATM does not like me".

Table 2 shows, how the long term use of ATMs has affected people's opinion on user-friendliness of those machines. General trend in Finland is an increasing user-friendliness (people who find ATMs friendly & very friendly) of ATMs, the longer you have used them - the more you like them. That number increases from 37% (new users) to 83% (old users). The more specific analyse of responses shows that the number of "very friendly" decreases from 9% (new users) down to 5% (old users).

In Sweden, according to the survey, 37% of people who have used ATMs more than 10 years find ATMs "not frindly" (= not so friendly & ATMs do not like their customers). The number is only a little smaller, 33% among people who have used ATMs less than 10 years. It is also interesting to notice that the proportion of customers who find ATMs "very friendly" and "friendly", has decreased quite rapidly. This trend goes to an opposite direction in Finland.

Reasons for the quite high percentage of "unfriendliness" of ATMs (35% respective 33% average) according to my interviews were, that ATMs are made to be as long standing as possible, they are not made to be as user-friendly as possible. This means that ATMs are mainly made of metal and other long-lasting materials (machines are usually outside, they have lots of customers, there is mischief against them, weather conditions), and these might cause, that some users do not create a positive attitude or "a nice picture" of ATMs. What was also mentioned, was that especially some older people have usually more problems with ATMs than the younger users. Nowadays people are also demanding more and more services and features than earlier (possibility to pay bills in Sweden and safety aspects in Finland). ATMs have to face those demands as well. However, according to my interviews, banking personnel have never heard some proposals for upgrading ATMs from their customers.

Table 3. User-friendliness in relation to frequency of use.

(4) How user-friendly do you find ATMs?

User-friendly *

Cannot say

Not user-friendly **

SWE

FIN

SWE

FIN

SWE

FIN

(5) How often do you use an ATM?

3 times a week

72%

94%

0%

6%

28%

0%

Once a week

52%

65%

2%

0%

36%

35%

Once a month

83%

33%

7%

0%

0%

67%

Average

69%

64%

0%

2%

21%

34%

* User-friendly includes both "Very friendly" and "Friendly".

** Not user-friendly includes both "Not so friendly" and "ATM does not like me".

In table 3, I have compared if there is some kind of trend between the user-friendliness of ATMs and the user-frequency (=how often do you use ATMs). It is easy to find out a common trend in Finland, where 94% of people who use ATMs more often than once a week think that ATMs are user-friendly. That number decreases to 33% among those people who use ATMs at longer intervals. It seems to be so, that the shorter frequencies of use of ATMs, the more you find those machines user-friendly.

What is interesting to notice in Sweden, is that 72% of people who use ATMs more often than once a week think that ATMs are user-friendly. That number increases to 83% among those people who use ATMs once a month. I did not manage to find some explanations to this phenomenon. Customers' opinions seem to go two different directions in these two countries.

Table 4. Safety of ATMs.

(11) (11) Do you feel yourself and your money safe when you use ATM?

YES

NO

SWE

FIN

SWE

FIN

(1) How many years have you used ATMs?

New users

(<10 years)

90%

84%

0%

6%

Old users

(10< years)

67%

91%

33%

9%

Average

78%

88%

22%

2%

What can be noticed in table 4 in Finland, is the proportion of the people who don't feel themselves or their money safe when they are using ATMs, has decreased from 16%, among customers who have used ATMs from six to ten years, to 9% among customers who have used ATMs more than ten years. In Sweden, the same proportion increases from 10%, among people who have just started to use ATMs, to 33% among long time users. Here do we have the same kind of paradox in these two countries that we had already in the table 3. It is quite interesting to notice so different opinions between these neighbouring countries.

There was one question in my questionnaire when I asked people if they have any proposals how to develop ATMs, so there were two people who said, that they would like to see more ATMs in safely lighted places. What was also proposed as an important thing according to three of those interviewed, was that there should be more security cameras. All of these safety proposals came from Finland. The reason for this might be that there had been a large misuse of ATMs just before of my questionnaire.

When I started analyse in-depth the answers I had received from both countries, I noticed that 50% of those who don't feel themselves safe when they are using ATMs were women between 41 and 60 years. There were also some younger women, so that the total proportion of women in this case was almost 80%. By placing or replacing ATMs to well lighted, and also wider places, might have positive effects in many of these customers.

Table 5. Functions of ATMs.

(8) (8) Are there enough functions in ATMs?

YES

NO

SWE

FIN

SWE

FIN

(1) How many years have you used ATMs?

New users

(<10 years)

60%

95%

40%

5%

Old users

(10< years)

38%

96%

62%

4%

Average

49%

95%

51%

5%

Table 5 illustrates two totally different phenomenon in two different countries. In Finland, only small proportion of people think that there are not enough functions in ATMs. In Sweden, the dissatisfaction was much bigger among those people, which were used ATMs for a long time, than among the "beginners". In Finland, there are more banking functions in ATMs, almost all of those functions people need in their daily banking businesses, except the possibility to put in money into account. In Sweden, ATMs are servicing bank-customers only by giving some money for them (except Nordbanken's office in Malmö, where ATMs have many other functions as well). The questionnaire also shows, that in Finland, more people concentrate their attention to the safety issues of ATMs than in Sweden. In Sweden, people are interested to get more functions in the ATMs, for making it possible to do more banking businesses with those machines. The most important ones were possibility to pay bills (4 proposals), possibility to put in money on account (3 proposals), and an easier way to check how much money there is in the account (3 proposals).

To mention some other interesting results from my study, for example, average distance to the nearest ATM in Sweden is more than two times longer (1200m) than in Finland (550m). This reflects to the fact, that 61% of Swedes would like to see more ATMs in their own towns. The corresponding persentage is only 22% in Finland. Another interesting result was queue time, that was generally longer in Sweden than in Finalnd. The reason for this might be the fact, that there were 860 ATMs per 1,000,000 inhabitant in Finland, when that number was only 266 ATMs per 1,000,000 inhabitant in Sweden (Source: European Monetary Institute, 1997, p.169). Finally, the proportion of people who prefer bank-offices when they withdraw cash is a little bit larger in Sweden (20%) than in Finland (7%).

When I was looking for some numbers of ATMs in Finland, I found out an interesting life cycle in their case, too. In the very early period, banks were pushing only few ATMs to markets. After a couple of years, when people became familiar with ATMs and noticed those opportunities ATMs were offering, they started to want more machines. During this "pull takes over" period, the number of ATMs increased rapidly. What happened then was that a new technology entered to the markets. This new technology made it possible to make transactions between bank accounts. At the same time, the number of bank cards and EFTPOS-terminals increased rapidly, which meant, that the need to have cash in the wallet was not so important. The number of ATMs started to decline a little, when old machines were taken out from markets, but they found an "optimum balance" and have stayed at that level since then. It is interesting to see, what is going to happen with those new giro ATMs.

Figure 1. Diffusion of ATMs & Giro ATMs.

Source: Suomen Pankkiyhdistys

6. CONCLUSIONS

This study shows, how payment methods and services have become more and more information technology based during the last twenty years. But what has happened during this diffusion process is, that banks have decided on their own what kind of services and payment methods they are going to provide to their customers. It has not been like Rothwell and Walsh argue, that good communication and effective collaboration with users play an important part in this process. According to my interviews, banks have never got any kind of propositions from their customers. Instead linkages between banks and the new technology providers are important ones in the development and diffusion process of new methods and services. But the final customer (the user of these services) has been left to the backstage in this process.

This study also shows, that banking customers have received quite well these new payment methods and services. Credit cards, for instance, have been popular ones among customers, because of the ease of use in doing businesses. Electronic money has also started its diffusion process, but it has not been as big a success as credit cards were when they were introduced. What is important to mention here is that at the same time when electronic money becomes more popular, the role of ATMs is diminishing, because you do not need that "extra cash" if you are able to make your small payments with electronic money as easily as with a "traditional" money. What has happened with payment services, is that role of so called self-services is increasing rapidly (source: Interviews). In case of ATMs, customers have perceived this new service pretty well in both Sweden and Finland, where the amount of satisfied customers is bigger than the amount of unsatisfied ones (Tables 2 & 3).

What it comes to differences between these two countries (Sweden and Finland), one might consider that those countries differ quite a lot from each other, in case of banking. As Rosenberg mentioned, each country has its own visions about what is important and what might be worth developing just in one specific country. Sweden and Finland have chosen their own ways, but the interesting thing is, that the Swedish banking systems have not developed as fast as the Finnish ones. There are some old traditional systems still in use in Sweden (e.g. paper giro) and the amount of manual work is much higher than in Finland (e.g. bank bar code already in 1993). Despite of this "traditional" technique in Sweden, customers seem to be quite happy with their banking situation, because there has been only few complains on the banking personnel (source: Interviews).

In many cases, technology has helped people in our daily duties. It is almost impossible for a modern human-being to live without all these high-technology based products. All the time new innovations appear to market, trying to become dominant ones, but some of these developments include negative effects as well. In May 1998, a telecom satellite stopped functioning. It had far-reaching effects in the United States, where 80% of all ATMs and EFTPOS-terminals stopped working. How is it possible that only one error can cause so much trouble? How can we be sure that it will not happen again? Excellent technology does not always guarantee that everything becomes better. It is difficult to know when we are taking one step too much.

During the last decades of the 20th century, the idea of developing new services has not come from customer's side. Banks have been able to develop these new services and products as they have liked. Each of these products has passed a long test period before they have been accepted to the public-use. All new inventions have not passed this process. But the products which have succeeded, have qualities like long-standing, possibility for re-developing and they have to be easy to use (EV-Kehitysyhtiöt & Fistec, 1989, p.54). The customer has had only one alternative: you have to take what is offered. When we think of a modern society, it is almost impossible to survive without an own bank account for instance.

But there was a change in the monarchy of banks in the middle of 1990's, when the competition became much harder in the banking sector. One reason was the internationalisation, when banks from other countries started their operation offering services much cheaper and being more customer-friendly. "The old" banks reacted quickly by offering more alternatives for their customers and asking their opinions about new services and so on. Customers' role became more important for banks, because they did not want to loose them. Nowadays you might hear a customer saying, that "If you (bank) do not fix it, I will change my bank!". Ten years ago you could not hear something like this.

7. ACKNOWLEDGEMENTS

I wish to express my deepest gratitude to Prasada Reddy Ph.D., my supervisor, for his interest and support throughout this study.

I am grateful to Ms. Sara Godman, who assisted me with banking literature in the very beginning of this study.

I am greatly indebted to Mr. Ville Hintsanen, Team leader in Payment Systems department in OKOBANK, for his valuable help with payment systems.

My respectful thanks are due to Mrs. Mary Murphy-Brown, Sparbanken Finn, for devoting me some of her valuable time.

I wish to thank Mrs. Hannele Laxman and Mr. Pauli Laxman, for their assistance in collection of interviews in Finland.

Finally, I owe my warmest thanks to my mother and father, for their help and support.

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9. APPENDIX

Automated Teller Machine (ATM)

. How many years have You used ATMs ? (1-5) _______________

(1=I have never used 2=1-5 years 3=6-10 years 4=11-15 years 5=16- )

2. Who told You first about ATMs? (1-5) _______________

(1=Friend 2=TV-news 3=bank-personnel 4=nobody 5=someone else)

3. Who explained how they function? (1-5) _______________

(1=Friend 2=TV-news 3=bank-personnel 4=nobody 5=someone else)

4. How user-friendly do You find an ATM ? (1-5) _______________

(1=very friendly 2=friendly 3=? 4= not so friendly 5=ATM doesn't like me)

5. How often do You use an ATM ? (1-5) _______________

(1=daily 2=three times a week 3=once a week 4=once a month 5=once a year)

6. How long do You have to queue before it is your turn to use ATM ? (1-5) _______________

(1=no queue 2=1-2 minutes 3=3-5 minutes 4=6-10 minutes 5=11- )

7. Where would You like to see more ATMs ? _______________________________________

( shopping-centres, gas-stations, railway-stations, bus-stations, theatres.........)

8. Are there enough functions in ATMs ? (YES/NO) _______________

9. Is it easy to make mistakes when You use ATM ? (YES/NO) _______________

IF YES --> How easy / difficult is it to correct these mistakes ? (1-5) _______________

(1=very easy 2=easy 3=? 4=difficult 5=it is too late to do something)

0. Are there enough ATMs in your town / village ? (YES/NO) _______________

1. Do You feel yourself, and your money, safe when You use ATM? (YES/NO) ______________

2. Bank-office / ATM - what do You prefer when You make your withdrawals ? ______________

3. Is there something You would like to develop in ATM ? _____________________________

4. How many meters (about) is it to your nearest ATM ? _______________

5. What makes You use ATMs? _______________________________________________

6. Sex ? female ___ male ___

7. Profession ? _______________________

8. Age ? 1-25 ___ 26-40 ___ 41-60 ___ 61- ___

Thank You!