As financial organizations rush to transition their core banking systems to more secure software, customers of Nigerian banks should prepare for the risk of greater service disruptions.
It is anticipated that the action, which many banks have already started, will pick up steam in the upcoming weeks, possibly resulting in more disruptions and delays in transactions.
In an interview with THISDAY yesterday, Dr. Uju Ogubunka, the president of the Bank Customers Association of Nigeria (BCAN) and a former registrar of the Chartered Institute of Bankers of Nigeria (CIBN), criticized the banks for not informing their clients sufficiently about the upcoming disruptions.
“The ultimate goal is to improve the system and services for customers, but it’s debatable whether all these upgrades should happen simultaneously as it’s causing major disruptions,” stated Ogubunka. Furthermore, a lot of banks neglected to notify their clients on time, which left them unprepared.
Ogubunka emphasized the significance of improved communication in light of the millions of customers impacted, particularly those who are less tech-savvy.
Not all clients are up to date with technology. To assist clients in adjusting, banks must take the time to explain these changes and perhaps offer some training. Things are becoming worse because of the absence of planning, he continued.
But a banking industry insider who begged to remain anonymous claimed that the disruptions were just getting started and that additional banks were getting ready to move their systems.
He pointed out that the urgency to handle growing expenses and security issues was the driving force behind this upgrading frenzy.
The source claims that a significant number of Nigerian banks have been paying for core banking software in US dollars, which is a significant cost considering the continuous depreciation of the naira.
“The banks pay in dollars for each account held, in addition to the cost of supplementary services,” he stated. These costs are no longer manageable given the depreciation of the naira. For this reason, banks are searching both domestically and internationally for less expensive options.
Among the first to see service disruptions following its September switch from the T24 system to the locally created SEABaaS platform was Sterling Bank. During the migration, customers were unable to transact for days. Joining the wave, GTBank has revealed its intention to move from UK/Jordan software vendor ICS Financial Services to India’s Finacle platform.
Similarly, when Zenith Bank started moving from Phoenix, created by UK-based Finastra, to Oracle’s Flexcube on October 1, there was a significant service interruption. Access Bank, which had informed its clients of a migration, later re-announced to its customers a revised migration date.
The source went on to say that banks were being pressured to improve their systems due to security concerns. Cyberattacks aimed against financial institutions have increased and Systems that are safe and economical to use are essential for banks. The main goal of this migration trend is to protect against those issues.
Nonetheless, there is still cause for concern given how quickly different banks are updating their systems concurrently.
Due to the concurrent nature of these migrations, the sector is experiencing service disruptions, and additional banks are predicted to follow suit. Ogubunka and other industry watchers have responded to this by urging a more measured and customer-focused strategy.
“Yes, the goal is to improve service quality, but banks should not rush the process and neglect the needs of their customers. Without adequate preparation and communication, we will continue to see more disruptions, and the frustrations will only deepen,” Ogubunka said.
To prevent more interruptions, the president of BCAN asked banks to give priority to consumer education and make sure that changes go more smoothly.
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