System upgrades leave bank customers frustrated

Due to the continuing core banking applications, bank customers have been experiencing difficulties accessing their funds for a few weeks. This is because of network disturbances. An increasing number of transactions went wrong, causing investment organisations' business to stagnate. Writer Justice Okamgba

Customers of Optimus by Afrinvest were alerted via email that there could be brief delays in transactions as a result of the Nigeria Inter-Bank Settlement System and bank outages.

"We would like to inform you about some temporary delays in processing withdrawals," the email said in part. The Nigeria Inter-Bank Settlement System (NIBSS) problem and outages at some banks—namely, GTCO, Zenith, Sterling, Stanbic, and Standard Chartered—are to blame for this. If any of these banks is connected to your Optimus by Afrinvest account, you may encounter delays in receiving funds in your bank account or depositing funds in your wallet.
We really regret any inconvenience that this may have caused. You may be confident that we are keeping a close eye on the matter and will notify you as soon as things resume as planned.

Customers of the investment company i-invest, which deals in stocks, Treasury bills, and other financial services, were also advised that its operations might be impacted by a scheduled update by its partner bank.

"This is to inform you about a planned upgrade that may affect your transactions temporarily," the company stated. Our partner bank will be doing maintenance to enhance your experience; this could result in funding and withdrawal delays or disruptions.

The upgrade is slated to take place on Sunday, October 13, 2024, at 12:00 am, and on Monday, October 14, 2024, at 9:00 am. We are sorry for any difficulty that you may have had and value your patience.
While some banks have declared that their system upgrades are complete, others are still in the process of completing the shift. Many consumers are now unable to obtain basic banking services due to the disruptions brought on by the system improvements, which raises questions about the institutions' overall readiness.

Prior to the extensive system overhaul, which aims to enhance the customer experience in the primary, banks have depended on foreign firms to handle their IT infrastructure, incurring large maintenance costs in foreign currency.

Nonetheless, a few banks, such as Sterling Bank, have begun to move towards locally created alternatives.

According to the most recent industry data, the tier-2 lender, which has a market value of N115.16 billion, moved from the Temenos T24 system, which is situated in Switzerland, to SeaBaaS, an in-house solution created by Peerless.

August marked the start of the system upgrade to the new SeaBaaS, which was finished in September. Over 3 million of its clients were unable to use any of Sterling's financial channels during the upgrade.

"The process of migration is intrinsically intricate and intimidating,” stated Bobola Ojo-Ami, Head of Marketing at MIM Finance and an IT specialist.

"Banks are never really ready; forethought merely prepares them for what is to come. Their true struggles arise when they are actually migrating.

Tier-1 bank GTBank switched from India's Finacle system, provided by EdgeVerve Systems, to ICS Financial Services.

On October 13, the bank sent out a notice to its clients about possible service interruptions. To prevent more annoyances, Access Bank decided to postpone its system upgrade, which was originally planned for October 12.

Similar difficulties were encountered at Zenith Bank, whose clients had trouble logging in for three days after a system update on October 1.

Customers of FirstBank experienced even greater delays as a result of their upgrading, as they were unable to use digital services for six days.

IT specialist Ojo-Ami contended that a strong business continuity plan—which included the option to revert to the old system in the event that the new one poses serious difficulties or impairs service delivery—was an essential part of the migration process for big banks.

He warned that while having a rollback option was necessary, it was not always easy to use.

Ojo-Ami claims that in some circumstances, sticking with the new system rather than going back to the old one might be more beneficial for banks.

Post-migration testing and staff training are essential components of the system update that may need an extra month or two.

Continuous monitoring is carried out once the new system goes online to guarantee data integrity and operational effectiveness.

He clarified that banks were moving millions of consumer records across hundreds or thousands of branches and different platforms.

According to him, the bank also needed to train thousands of employees on the new systems, and depending on certain needs, hardware infrastructure modifications might be necessary to make room for the new technology.

Communication gaps.

Consumers have complained about certain banks' failure to notify them in advance of an update process on several platforms, including social media.

Customers who are frustrated complain that the outages not only make it difficult for them to obtain financial services, but they also negatively affect their trust in the institutions, which was once seen to be the most precious asset in the banking industry.

Ojo-Ami emphasised that during the move, clients must be made aware of any interim fixes or other options for support.

In order to prioritise migration duties, he encouraged banks to notify clients of any periods when they would be unavailable and let them know what to do in those situations.

Customers are reassured by this degree of transparency that they are appreciated and that the bank is dedicated to meeting their needs throughout the migration process. “Without this clarity, customers may feel disenchanted and consider switching to another bank, as trust is the most critical currency in banking,” Ojo-Ami added.
Enakirrerhi Truthful, an artificial intelligence researcher at RealSearch and Partners Inc., claimed that during the upgrades, banks neglected to plan for the worst-case situations.

According to Truthful, the disruptions caused delays in personal transactions and had an impact on enterprises, highlighting the necessity for more thorough scenario planning.

Additionally, this interruption exposed a deficiency in backup plans. What happens in the event that an upgrade goes wrong? Do we have a fallback strategy? The answer seems to be no for a large number of the banks.

"We witnessed directly how essential our banking system is to our day-to-day existence. Grocery payments were unpaid for, businesses were unable to process payments, and even overseas transactions were impacted. The implications of this went beyond a simple technological error; it also affected trade, security, and even public trust in the financial system," he said.
Updates to the system are required

Aituaz Kola-Oladejo, the Executive Director of Financial Services inventors, a non-profit group including more than 3,500 inventors, stated that updates were essential for maximising resources, improving efficiency, and lowering susceptibility to fraud and threats.

"Given the rapid advancement of digital technology and the exponential growth of digital financial transactions, I think the upgrading is imperative.

Kola-Oladejo declared, "Financial institutions must conduct stress and capacity tests on the resilience of their systems."
She continued by saying that the improvements were essential for fixing security holes that scammers take advantage of and enhancing the general user experience.

The real GDP of Nigeria increased from 2.98 percent in Q1 2024 to 3.19 percent in Q2 2024, with the banking industry accounting for 16.36% of the country's total GDP, according to the National Bureau of Statistics.

Speaking, Abiola Jimoh, co-CEO of XChangeBOX, identified the urgency of infrastructure upgrades.

Although the improvements were required to improve banking services, he pointed out that the customer confidence is being harmed by the delays in updating important systems.

While banks are making improvements to their systems, more frequent updates ought to be made. Regretfully, he said, "We are still having a lot of infrastructure problems even if we have made progress with banking services.

Fintechs to the fore

When the outage was at its worst, a lot of users looked for other options and started using fintech platforms for their financial transactions, like OPay, PalmPay, and Monie Point.

This pattern is similar to what happened two years ago when the Central Bank of Nigeria redesigned the naira and caused a cash crunch.
Jimoh said that newer, tech-driven banks assisted during the system disruption and lauded the role of fintech in easing some of the burden.

He stated, "The situation would have been much worse if not for the new banks and fintech players stepping in just like they did during the cashless policy period." "The entire banking ecosystem's trust is impacted by these delays."
Jimoh believed that fintech was a vital ally in fostering the banking industry's sustainable expansion in Nigeria.

Fintechs are assisting in enhancing the work that traditional banks do. We must keep helping them in order