In a bid to stay aligned with the evolving banking system, several Nigerian banks recently upgraded their core banking platforms.

This trend was initiated by Sterling Bank on September 10 when it transitioned to a new system called SeaBaaS.

Due to this migration, customers faced difficulties, with some unable to access their funds for several weeks.

Following Sterling Bank’s lead, other institutions like Zenith Bank, Guaranty Trust Bank (GTB), and First Bank also undertook similar upgrades.

These changes led to various service disruptions, failed transactions, and customers being unable to pay for services or complete purchases.

WHAT IS A CORE BANKING SYSTEM? 

A core banking system is software used by banks to manage essential processes like account management, transactions, and risk monitoring.

It processes daily transactions and updates accounts and financial records.

WHERE DID THE BANKS FALL SHORT?

The banks made some critical errors during the migration. They did not adequately inform their customers about the upcoming changes and disruptions.

They also failed to provide proper guidance to elderly customers, who may not be as tech-savvy, to prepare them for the updates.

Another issue was that many banks scheduled their migrations simultaneously, making the process less customer-focused.

Additionally, they did not offer temporary solutions that could help high-performing account holders mitigate potential losses during the transition. The absence of a phased, customer-friendly transition plan led to further disruptions.

WHY IS THE UPGRADE NEEDED?

Due to the ongoing naira devaluation, many banks are shifting to more affordable core banking systems that offer the same functionalities as their previous, more expensive versions.

Security threats such as frequent cyberattacks and account fraud have also driven this migration to safer, fraud-resistant platforms. The primary goal is to protect customer accounts from hacking and unauthorized withdrawals.

These modern systems offer banks increased flexibility, scalability, and the ability to collaborate with third-party providers, enabling them to introduce new, innovative services to their customers.

The upgrade also facilitates routine maintenance of these critical banking platforms.

DOES THE MIGRATION NEED CBN APPROVAL?

Core banking migrations do not require formal approval or directives from the Central Bank of Nigeria (CBN).

However, banks typically inform the CBN of their plans out of courtesy.

Most importantly, customers’ funds remain secure during these system upgrades.