THE IMPACT OF ATM SERVICE QUALITY ON CUSTOMER SATISFACTION IN THE PRIVATE COMMERCIAL BANKING INDUSTRY IN YANGON, MYANMAR

Abstract

The financial system has an important role to play in the development of the economy of a country. Since the 2011 political reforms, Myanmar's Banks and Financial Institutions Law was passed in 2016 by the parliament. In the past, Myanmar's Financial Institutions Law, which was enacted in 1990, provided only very general rules for local financial institutions. Myanmar is largely a cash-based economy. The people of Myanmar have less confidence in the banking system than in other countries in the region, having experienced a banking and currency crisis in the past. That is why most people prefer to keep cash in their hands or buy property to secure their financial situation.

However, in the past couple of years, the financial sector took important steps to reduce cash transactions: 21 out of 28 banks joined the SWIFT system, whereby local banks can make financial transactions to foreign correspondent banks. In 2011, the Myanmar Payment Union (MPU) was established by Myanmar banks to serve as a national payment switch for Myanmar. MPU provides electronic channels such as the Automated Teller Machines (ATM), Point of Sale (POS) terminal, and mobile banking to support non-cash payments. MPU membership consists of three state-owned banks and 14 non state-owned banks. In 2015, MPU became a public company, and 23 out of 28 Myanmar Banks joined as members. MPU cardholders can access almost 1,700 ATMs nationwide and use almost 3,500 POS terminals in Myanmar. In addition, the cardholder can also purchase products on 32 e-commerce websites. It is the first time in 50 years that foreign banks can support the country’s economy with their extensive international experience and worldwide networks. In 2016, the Central Bank of Myanmar granted licenses to 13 foreign banks to open a branch in Yangon.