Nigerian Banks’ IT Upgrades Cause Major Disruptions for Customers
Banks’ IT Upgrades Lead to Disruptions
Recent IT upgrades by Nigerian banks have caused significant disruptions, leaving customers unable to access essential banking services. The upgrades, which aim to improve digital infrastructure and enhance cybersecurity, have instead resulted in operational challenges, particularly for customers in rural areas. These disruptions have caused inconvenience for many Nigerians, and the situation is expected to worsen as more banks announce similar upgrades.
Sterling Bank’s System Migration
The first major disruption occurred when Sterling Bank migrated its core banking system from T24 to SEABaaS, a locally developed custom-built platform. This migration led to widespread system outages, leaving customers unable to complete transactions for several days. The bank’s intention was to modernize its infrastructure to better handle the increasing demands of digital payments, but the process caused unexpected difficulties.
Zenith Bank’s IT Upgrade: Major Delays and Protests
Zenith Bank’s system upgrade began on October 1, 2024, when the bank announced routine maintenance. The upgrade involved migrating from Finastra’s Phoenix core banking system to Oracle’s Flexcube. While the goal was to improve service quality, the result was a system shutdown that lasted for over a week. Customers were unable to access banking services, leading to delayed salary payments for companies using Zenith Bank.
Several companies reported delays in processing payroll, leaving employees frustrated. This led to protests outside Zenith Bank branches, with customers demanding immediate access to their funds. The prolonged downtime raised concerns about the bank’s preparedness for such a major upgrade, especially given the critical nature of banking services.
Other Banks Following Suit
Following the challenges faced by Sterling Bank and Zenith Bank, other banks have announced their own IT upgrades. Guaranty Trust Bank (GTB) will begin transitioning to the Finacle Core Banking Application Systems on October 11, 2024, with services being disrupted for 11 hours on October 13, 2024. Similarly, Access Bank announced plans to upgrade its systems from October 12 to 13, although it has postponed the exercise for now. These banks are taking proactive steps to inform their customers about the planned service disruptions.
The Digital Payments Surge and Cybersecurity Concerns
The surge in digital payments in Nigeria has driven the need for banks to upgrade their IT systems. According to the Nigeria Interbank Settlement System (NIBSS), cashless transactions in the country rose by 84.37 percent, reaching N572.63 trillion between January and July 2024. However, this increase in digital transactions has also led to a rise in fraud losses, which have grown by 496.96 percent over the past five years.
In response to these challenges, Nigerian banks are investing heavily in technology upgrades. Six commercial banks increased their spending on technology and cybersecurity by 176.09 percent, reaching N196.89 billion in the first half of 2024 compared to the same period in 2023. These investments are aimed at combating the growing threat of fraud in the digital payments sector.
Customer Reactions to IT Disruptions
The ongoing disruptions have sparked widespread frustration among customers, many of whom have taken to social media to express their dissatisfaction. Below are some social media reactions:
- @CuteNaija: “All my workers I paid with Zenith Bank have not received salaries 48/72 hours after the transfer. This upgrade is frustrating.”
- @ToluWrites: “Sterling Bank’s system migration is making life difficult. I haven’t been able to make a payment for days!”
- @FemiOlu: “These bank upgrades are necessary, but the inconvenience is just too much. We need a better transition plan.”
- @AdaN: “Zenith Bank’s system downtime is affecting businesses. How are we supposed to function without access to funds?”
- @KunleTech: “I understand the need for IT upgrades, but a week-long disruption? That’s unacceptable.”
- @LolaJ: “Sterling Bank, please fix your system. This outage is affecting everything!”
- @BankWithFaith: “Why do banks always carry out these upgrades without considering how it affects their customers? #frustrated.”
- @NaijaBiz: “Zenith Bank’s upgrade is delaying our payroll. Employees are understandably upset.”
- @Omoluabi: “Banks are spending more on tech, yet the service is getting worse during these upgrades.”
- @TechInsider: “GTB’s planned upgrade better not turn out like Zenith Bank’s. We can’t afford another disruption!”
- @DigitalNaija: “Cashless transactions are the future, but not if banks keep experiencing these downtimes during upgrades.”
Conclusion: The Future of Banking in Nigeria
The current wave of IT upgrades in Nigerian banks reflects the growing demand for better digital payment systems and enhanced cybersecurity. However, the resulting disruptions have caused significant inconvenience for customers. As more banks follow suit, it is essential for financial institutions to improve their migration strategies and ensure minimal disruptions during upgrades. While the upgrades are necessary to meet the demands of an increasingly digital financial landscape, customer experience must remain a priority.
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