Nigerian bank customers are bracing for increased service interruptions as financial institutions across the country expedite the migration of their core banking systems to more secure and cost-effective software. While many banks have already begun this transition, the process is expected to intensify in the coming weeks, potentially leading to frequent transaction delays and unexpected outages.
The President of the Bank Customers Association of Nigeria (BCAN) and former Registrar of the Chartered Institute of Bankers of Nigeria (CIBN), Dr. Uju Ogubunka, has expressed concerns about the limited communication from banks regarding these disruptions. During an interview with THISDAY, Dr. Ogubunka emphasized that customers were not adequately informed about the potential impact of these system upgrades.
“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,” said Dr. Ogubunka.
He highlighted the importance of better communication from banks, particularly for customers who are less familiar with digital banking. “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.
According to a banking industry insider who spoke anonymously, further disruptions are likely as more banks prepare to migrate their systems. The shift is primarily driven by rising operational costs and heightened security concerns. The insider revealed that the current expenses, including fees paid in dollars for each account held and additional service costs, have become unsustainable due to the naira’s decline. Consequently, banks are exploring cheaper alternatives, both local and foreign.
“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,” the source stated.
Several banks have already experienced challenges during their system upgrades. In September, Sterling Bank was among the first to face service issues after moving from T24 to SEABaaS, a locally developed platform. Customers reported days of limited access to services during this migration.
Similarly, GTBank recently announced its switch from the Jordanian/UK-based ICS Financial Services software to Finacle, an Indian platform, aiming for enhanced efficiency and security. In another instance, Zenith Bank suffered a major outage on October 1 while transitioning from UK-based Phoenix by Finastra to Oracle’s Flexcube, disrupting customer services.
Access Bank had also planned to migrate its systems but decided to postpone the transition, promising to announce a new date for the update. The bank has assured customers that it will take all necessary steps to ensure a smooth migration when the time comes.
The insider also pointed out that increasing cyberattacks on banks are a significant factor behind the ongoing system migrations. Financial institutions are under pressure to adopt more robust security measures, and upgrading to more secure platforms is seen as a critical step to safeguarding customer data and assets.
“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 explained.
While the primary goal of these system upgrades is to enhance service quality and security, the simultaneous implementation by several banks has raised concerns over its impact on customers. Dr. Ogubunka and other industry experts have called for a more strategic, customer-oriented approach to minimize disruptions.
“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,” Dr Ogubunka said.
The BCAN president urged banks to focus on educating customers and ensuring smoother transitions to prevent further inconveniences. With many customers still struggling to navigate the digital banking space, effective communication and training will be crucial in helping them adapt to these changes.
As the wave of system migrations continues, Nigerian bank customers are advised to prepare for potential service interruptions while banks work to achieve a more seamless, secure, and efficient banking experience.
