Nigerian bank customers are expected to face further service disruptions as several financial institutions transition to new core banking systems to enhance operational efficiency and improve customer experiences. In recent weeks, some banks have already begun system migrations, leading to temporary issues with transactions and account access, with more banks set to follow suit in the coming months.
These upgrades, while essential for improving banking operations, have already caused noticeable disruptions. Customers of Sterling Bank experienced several days of service outages in September when the bank transitioned from T24 to SEABaaS, a locally developed core banking system. Similarly, GTBank recently switched from Jordanian/UK-developed Basis/Banks software to India’s Finacle system, and Zenith Bank’s migration from Phoenix software (developed by Finastra) to Oracle’s Flexcube has left many customers without access to online services.
Despite announcements from some banks that services have been restored after significant IT maintenance efforts, customers continue to report issues, such as the inability to open mobile banking apps. Industry sources confirm that another major tier-1 bank is in the process of transitioning to a new system, which could result in further disruptions affecting millions of customers.
A banking industry source, who requested anonymity, explained that while these service disruptions are challenging, they are necessary to upgrade technology infrastructure and provide better long-term service. “Every bank aims to make daily transactions easier for customers, but system upgrades are critical to improving service quality and security,” he said.
The complexity of these migrations makes them anything but a quick fix. A backend developer at one of the tier-1 banks explained that moving to a new core banking system is a time-consuming process that could take weeks or even months to fully stabilize. Migrating customer data, integrating with various transaction channels like ATMs, USSD, and internet banking, and ensuring security measures are in place are all part of the lengthy process.
The migration is driven by several factors, including improved security, cost efficiency, and system flexibility. With increasing cybersecurity threats and the rising cost of maintaining foreign-developed core banking applications, banks are seeking solutions that offer better protection and reduce costs. Many top Nigerian banks, for instance, use expensive software from India, which incurs significant forex costs due to licensing and support fees.
However, these necessary upgrades come at a temporary cost to customer convenience. As one IT personnel pointed out, it’s like transferring data to a new phone—it takes time to move everything over and ensure smooth functionality. “Even with backup systems, like iCloud, it still takes time to transfer everything,” he explained, drawing a comparison to the bank’s migration challenges.
In light of the growing demand for electronic transactions, Nigerian banks are investing heavily in IT infrastructure to handle increased volumes while also strengthening their cybersecurity defenses. As the nature of crime shifts from physical armed robberies to digital threats, securing the digital banking space has become a top priority for financial institutions.
What to Expect
Customers should prepare for possible service disruptions as more banks undertake these system upgrades. While inconvenient in the short term, these migrations are necessary to ensure better banking experiences in the long run. Bank customers are advised to stay informed via official bank channels for updates on service availability during these transitions.
