An Assessment of Factors Affecting the Performance of Outsourced ATM Service among Commercial Banks in Kenya

Abstract

The study was an assessment of the factors affecting the performance of outsourced ATM service among commercial banks in Kenya. Following the huge investment and high monitoring costs of ATMs in Kenya, many financial institutions in Kenya have opted to outsourcing the ATM services. Outsourcing in this study was taken to mean the supply of ATM maintenance and repair services. One outsourcing firm known has been responsible for supplying outsourced ATM services to 23 of the commercial banks in Kenya. The research design employed in this study was descriptive. The population of this study was 43 commercial banks. The target population of this study comprised of information technology managers and ATM Managers in 23 commercial banks in Kenya conducting outsourced ATM services. This allowed for generalization of the findings to the whole population. The sample size was 46 managers from the 23 commercial banks. Primary data was collected using structured questionnaires. Data analysis involved two types of statistics: descriptive statistics and inferential statistics. Results indicated that the factors influencing ATM outsourcing were; Increased Productivity, Concentration on Core Activity, Increased Capacity, Cost, Technology, lack of manpower, Efficiency and Speed. The findings indicated that service quality affected the performance of outsourced ATMs services positively. In addition, the study found that change in operating environment had a positive relationship with the performance of outsourced ATM services. Commercial banks should therefore continue with strategic planning mechanisms. Such plans should include provisions for continuous environmental scanning where banks scan the environment for opportunities and threats.