AFRICA

Nigerian Banks Rush to Migrate Core Software, More Service Disruptions Loom

Customers of Nigerian banks are to brace up for the possibility of more service disruptions as financial institutions race to migrate their core banking systems to more secure software.

The move, which many banks have already begun, is expected to intensify in the coming weeks, potentially leading to further outages and transaction delays.

President of the Bank Customers Association of Nigeria (BCAN) and former Registrar of the Chartered Institute of Bankers of Nigeria (CIBN), Dr. Uju Ogubunka, while speaking with THISDAY, on Friday, criticised the banks for failing to adequately notify their customers about the impending disruptions.

Ogubunka said, “The ultimate aim is to improve the system and services to customers, but whether all these upgrades should happen simultaneously is debatable, as it’s causing major disruptions. Additionally, many banks failed to give enough notice to their customers, leaving them unprepared.”

With millions of customers affected, Ogubunka highlighted the importance of better communication, especially for those less familiar with technology.

“Not every customer is technology-compliant. Banks need to take time to explain these changes and even provide some training to help customers adjust. The lack of preparation is making things worse,” he added.

However, an insider within the banking industry who pleaded anonymity argued that the disruptions were only beginning, saying more banks were preparing to migrate their systems.

He noted that this rush to upgrade was driven by the need to address rising costs and increasing security threats.

According to the source, many Nigerian banks have been paying for core banking software in United States dollars, a heavy burden given the ongoing devaluation of the naira.

He said: “The banks pay in dollars for every account held, along with the cost of additional services. With the naira’s decline, these expenses have become unsustainable. That is why banks are looking for cheaper alternatives, whether local or foreign.”

Sterling Bank was one of the first to experience service outages after it transitioned from the T24 system to SEABaaS, a locally developed platform, in September. Customers were unable to transact for days during the migration. GTBank has also joined the wave, recently announcing its plan to switch from Jordanian/UK software provider ICS Financial Services to India’s Finacle platform.

In the same vein, Zenith Bank experienced a major service outage on October 1 when it began migrating from Phoenix, developed by UK-based Finastra, to Oracle’s Flexcube. Access Bank, which had scheduled its migration, recently notified its customers of a postponement. They noted that a new date for migrations would be communicated to their customers.

The source further explained that security concerns were also pushing banks to carry out the systems upgrade.

“There has been a rise in cyberattacks targeting financial institutions. Banks need systems that are not only cost-effective but also secure. This migration trend is largely about safeguarding against those threats,” the source said.

However, the speed at which multiple banks are upgrading their systems at the same time remains a source of concern.

The simultaneous nature of these migrations is leading to service disruptions across the industry, with more banks expected to follow suit. This has prompted Ogubunka and other industry observers to call for a more measured and customer-focused approach.

“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.

The BCAN president urged banks to prioritise customer education and ensure smoother transitions to mitigate further disruptions.

Nume Ekeghe

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