Transaction Trauma: How Bank Breakdowns are Disrupting Lives

The recent breakdown in Nigerian banks’ services has caused widespread disruption, leaving countless customers stranded without access to their funds. With bank apps crashing and transactions failing, many Nigerians are facing severe difficulties, from missing urgent payments to being unable to cover essential expenses, fuelling growing frustration across the country, writes Festus Akanbi

Imagine a desperate bank customer standing at an Automated Teller Machine (ATM), eyes bloodshot from lack of sleep, frantically trying to withdraw money he cannot access. His phone battery is dying after hours of attempting failed transactions on the bank app.

Another account holder’s child is sick, lying helpless in the hospital, needing urgent care, but without cash in hand, even the smallest treatments are delayed. His heart races as he calls customer service, only to be put on hold, the hollow, repetitive music in his ear amplifying his despair. Every passing minute feels like an eternity, knowing his money is locked in the system while he watches his world unravel, powerless and paralysed by the failure of the banking system. That is the current level of frustration of Nigerian account holders in money deposit banks.

To say the least, currently, Nigerians are beyond frustrated with the constant failure of bank apps and their inability to make simple transactions.

It is infuriating that Nigeria, despite being a leader in digital penetration in Africa, treats something as basic as transferring money or paying bills as mind-boggling rocket science. Every day, people are stuck refreshing apps that either crash or freeze, leaving them stranded. Imagine being in an emergency or trying to make an important purchase, only for your bank app to fail you yet again!

To worsen the case, going into the banking halls has not made any significant change either, yet Nigerian banks are flaunting eye-popping profits every quarter of the year.

According to a Lagos-based school proprietress, who was caught last week in a drama over an incomplete fund transfer to a client, “The lack of improvement despite endless complaints amidst the competition for humongous profits, feels like a blatant disregard for the struggles of millions of Nigerians.”

Disruptive Systems Upgrade

It seemed that many of these banks didn’t see the need to inform their customers early enough about what would be the impact of their planned system upgrade. It was the Chairman of the Association of Corporate and Marketing Communication Professionals in Nigerian Banks (ACAMB), Mr. Rasheed Bolarinwa, who was quoted by TheCable as saying that the disruption occurred because some financial institutions migrated their entire system from one core banking application to another – owned by the same software company – while some switch to an entirely different technology outfit.

So, it was a complaint galore from customers of Sterling Bank in September who raised the alarm on X that they could not access the lender’s mobile banking app for transactions for two weeks. However, further inquiries showed that the problem was caused by the system upgrade by Sterling Bank, which switched from Switzerland-based Temenos T24 to SeaBaaS by Peerless, an indigenous core banking solution.

For GTBank, which had been having issues with its mobile banking apps for some time, the time had come to upgrade its system as it migrated from ICS Financial Services, situated in the United Kingdom, to EdgeVerve Systems’ Finacle, based in India.

The upgrade wasn’t smooth as many Nigerians in their frustration took to various media platforms to register their displeasure over their inability to access their funds in the bank.

THISDAY gathered that Zenith Bank’s customers were not left out in the frustration of accessing banking services, especially their bank’s mobile app. However, the bank informed its customers via text, email, and social media platforms that its app would be automatically updated to a new version on October 1.

Today, the bank insists it has resolved all issues but a handful of customers still alleged that they still have issues with the debit cards.

Almost all the banks are in this situation. Even Access Bank had to postpone its system upgrade. Narrating his experience, a Lagos-based journalist (names withheld) gave an account of an embarrassing situation he had in a Facebook post, last week. “It happened to me in Navy Town Satelite, Lagos. After eating at a restaurant. I was about to pay and the bank decided to mess up. Inside Navy Barracks fah! It wasn’t funny at all. But thank God for a compassionate woman at the restaurant. Maybe I would have been locked up in a guardroom.”

Another respondent narrated how his debit card from another bank couldn’t work after he had purchased fuel at a filling station. He resorted to begging and eventually, another customer offered to pay on his behalf.

Fintech Companies to the Rescue

In the ensuing confusion, frustration, and disappointment from the traditional money deposit banks, analysts said the pendulum of patronage is swinging in the direction of fintech and digital banking in Nigeria.

Analysts said such operators like Opay, Moniepoint, Paga, e-Transact, Palmpay, Kuda, Eyowo, and Fair Money, among others which used to be popular among the poor segment of society, are becoming popular among the middle class of Nigerians. Operators described fintech start-ups as digital natives who disrupted legacy banking with digital functionalities, simplicity, big data, accessibility, agility, cloud computing, contextuality, personalisation, and convenience. Companies under this category are not only improving the financial consumer experience, but are changing the way people pay, transfer money, lend, borrow, and invest. Digital banking is traditional banking dressed up in a digital wrapper.

Expressing his disappointment in the traditional banks, a school proprietor told THISDAY how his driver saved him from embarrassment last week when he couldn’t settle an obligation through bank transfer. “We needed to buy fuel on our way from a trip. The fuel had already been dispensed but my bank apps (two different banks) failed me. The fuel attendant was already hauling insults at me when my driver brought out his debit card for one of these fintech companies and paid on my behalf. To say I was embarrassed was to say the least.”

Also, a senior executive with a manufacturing firm narrated his experience in an interview with THISDAY last week. As the custodian of a fund contributed by people to bail out a distressed neighbour, the account holder literally relocated to the banking hall to determine his balance since his bank apps did not work. He was under severe pressure from neighbours who wanted to know how much had been contributed so far.

Financial service analysts said with the ease at which holders of these fintech companies do their transactions, it won’t be a surprise if many Nigerians decide to drop some of the traditional banks for the likes of Opay, Kuda, and Eyowo, saying after all, what is important is to have access to one’s account.

A Lagos-based entrepreneur, Mr. Oladosu Morakinyo, explained that most of the traditional banks do not grant loans to poor savers except big companies with fat accounts in their banks.

“Why will a salary earner continue to suffer this epileptic service from big banks that are not ready to advance their loans? So, we should not be surprised at the rate ordinary people are opening accounts with these fintech companies,” he stated.

In Search of Affordable Banking Apps

According to the Chief Executive Officer (CEO) of Sterling Bank, Abubakar Suleiman, before the third quarter (Q3) of 2024, all Nigerian banks were using foreign-based core banking application systems, which cost millions of dollars in maintenance.

Suleiman had said Sterling Bank’s migration to SeaBaaS would allow the lender to domesticate its technology cost and reduce the cost of financial inclusion.

“African banks spend hundreds of millions of dollars annually on foreign core banking applications, further putting pressure on the continent’s balance of trade,” he said.

President of the Bank Customers Association of Nigeria (BCAN) and former Registrar of the Chartered Institute of Bankers of Nigeria (CIBN), Dr. Uju Ogubunka, expressed frustration over the limited communication from banks regarding these disruptions. He pointed out that banks should have better-informed customers about the potential impact of these upgrades.

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.”

Banks are making money and for competition, they are making so much noise about their gains. One wonders why the consumer protection department of the Central Bank of Nigeria has not waded in considering the pains and frustration of bank users. Certainly, this is the time to do that.