Nigeria’s Banking System Upgrades: A Digital Transformation in Progress

In recent months, Nigerian banks have embarked on significant core banking system upgrades to improve efficiency, reduce costs, and enhance customer experience. What began with Sterling Bank’s system migration in September 2024 has now become an industry-wide movement.

Sterling Bank made the strategic decision to switch from Switzerland-based Temenos T24 to SeaBaaS, an indigenous solution by Peerless, reflecting the growing trend to domesticate banking technologies. CEO Abubakar Suleiman emphasized that this migration would reduce technology costs, further supporting financial inclusion. Nigerian banks have historically relied on costly foreign systems, spending hundreds of millions of dollars annually on maintenance. By adopting locally-developed solutions, banks aim to not only cut costs but also foster innovation within the country.

GTBank, another major player, transitioned from ICS Financial Services (UK) to Finacle by EdgeVerve Systems (India). This shift aligns with the broader industry trend of moving away from foreign providers to more adaptable solutions that better serve Nigeria's unique market needs.

Service Disruptions: A Temporary Challenge

These upgrades, while crucial for long-term improvement, have led to temporary service disruptions. Sterling Bank customers experienced mobile banking access issues for nearly two weeks in September, while Zenith Bank customers faced login difficulties for three days following an October 1 system update. First Bank customers were unable to access digital services for six days due to similar upgrades.

GTBank and Access Bank both recently announced system upgrades. GTBank warned of service disruptions on October 13, while Access Bank postponed its upgrade initially scheduled for October 12 to avoid further inconveniences.

Driving Innovation in Nigerian Banking

The ongoing upgrades are part of a broader strategy to enhance the customer experience through seamless, efficient, and innovative services. While some disruptions have occurred, they highlight the commitment of Nigerian banks to remain competitive in the digital banking era. Industry leaders, such as Rasheed Bolarinwa, head of the Association of Corporate and Marketing Communication Professionals in Nigerian Banks (ACAMB), note that the system upgrades are essential for maintaining cutting-edge service delivery.

Colocation facilities and undersea cables, vital for banking infrastructure, also play a role in the ongoing maintenance efforts. Any disruption in these facilities, such as those recently reported, further underscores the need for continuous system optimization.

The Path Forward

While these upgrades pose short-term challenges, they reflect the Nigerian banking sector’s commitment to innovation and cost efficiency. As local solutions like SeaBaaS gain traction, Nigeria’s banks are setting a precedent for self-sufficiency and reducing dependency on foreign technologies. As such, customers can expect more streamlined services and secure transactions in the near future.

Conclusion

The ongoing digital transformation of Nigeria’s banking industry showcases the sector's adaptability and focus on technological advancement. Despite temporary setbacks, Nigerian banks are positioning themselves for long-term growth, aligning with global trends while driving local innovation.

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