Nigerian bank customers should expect more disruptions in banking services over the coming weeks as several financial institutions undergo major system upgrades. The upgrades aim to enhance operational efficiency and improve customer experience as banks race to modernize their technology infrastructure.
Some banks have already begun the migration process, with several customers experiencing difficulties accessing their funds and carrying out transactions. Sources within the banking industry revealed that more banks are in the process of transitioning to new core banking systems to strengthen their technology platforms.
Although one industry insider hinted that the Central Bank of Nigeria (CBN) might have instructed banks to carry out these upgrades, other sources suggest that the banks are independently working to enhance their services and respond to growing technological demands.
Service Disruptions Already Experienced
Tier-2 bank Sterling Bank was among the first to carry out its system migration earlier in September, moving from its T24 system to SEABaaS, a custom-built core banking application developed locally. Customers faced service disruptions for days, unable to complete transactions or access their funds.
Similarly, GTBank recently migrated from the Basis/Banks software, provided by ICS Financial Services, to the Finacle system, developed by Indian banking technology firm Infosys.
Zenith Bank also experienced a significant service outage on October 1 as it transitioned from its Phoenix system by London-based Finastra to Oracle’s Flexcube. While the bank announced that its services had been restored after “significant progress” in its IT maintenance, many customers reported ongoing issues accessing the bank’s mobile app and other digital services as of early October.
Industry sources revealed that another tier-1 bank is on the verge of switching to a new core banking system, which could similarly affect millions of its customers in the coming weeks.
Why System Migrations Take Time
According to a backend developer at one of the tier-1 banks, migrating to a new core banking system is a complex process that requires time to stabilize. “This is not a simple on-and-off switch; it could take anywhere from two weeks to a month,” the developer explained. The process involves moving customer biodata and ensuring that the new system integrates seamlessly with various channels such as ATMs, USSD, and internet banking platforms.
The developer likened the migration to switching to a new phone, saying, “You don’t just move everything in one go; it takes time, and even after a while, you may still need to retrieve additional data.”
The Motivation Behind the Migration
A senior IT professional from one of the top banks explained that several factors are driving the shift to new core banking systems, including improved security, flexibility, and cost management.
With increasing cybersecurity threats facing financial institutions, banks are seeking more secure systems to protect against hacking attempts. Furthermore, many Nigerian banks currently use software developed abroad, particularly in India, which incurs significant foreign exchange costs for licenses and support services.
“These core banking applications come with heavy financial commitments, from licensing fees to annual support payments. By upgrading, banks hope to reduce these costs while gaining better control over their technology infrastructure,” the IT expert said.
Impact on Customers
While customers have expressed frustration over the disruptions, banking officials stress that the upgrades are necessary to improve service delivery in the long term. “It’s a bitter pill to swallow, but it’s all about providing a better customer experience in the future,” said a source familiar with the migration process.
He emphasized that once the upgrades are completed, customers will enjoy more seamless transactions, faster service delivery, and enhanced security features.
What You Should Know
The migration to new core banking systems comes at a time when Nigerian banks are increasing their investments in IT infrastructure to accommodate the growing number of electronic transactions. With more Nigerians embracing digital banking, there has been a corresponding rise in cyber threats, prompting banks to strengthen their cybersecurity architecture.
Industry experts note that while physical bank robberies are becoming less frequent, cybercriminals have shifted to the digital space, where they can inflict more damage on financial institutions. This reality has driven the urgency for Nigerian banks to adopt more advanced technology systems to protect their assets and customer data.
For now, customers are advised to remain patient as the banks work through these necessary upgrades, with the expectation that the long-term benefits will outweigh the short-term inconveniences.
