How Nigerian Banks Can Navigate Network Glitch By Maymunah Abdulwahab

Recent core banking upgrades across Nigerian Deposit Money Banks (DMBs) have sparked operational disruptions, leaving customers frustrated and unable to complete basic transactions. Despite reassurances, prolonged IT glitches have hindered account access, disrupted transfers, and eroded customer trust.

Given the centrality of core banking systems to bank operations, these disruptions underscore a need for effective strategies to reduce service interruptions during important transitions. Banking systems manage fundamental operations, from account balances to transactions, making them the backbone of financial institutions.

With rapid advancements in digital finance, Nigerian banks have embarked on system migrations to enhance efficiency, integrate new technologies, and strengthen security. However, upgrading these systems can be challenging and risky, as evidenced by the issues currently impacting customers.

Many banks have faced extended disruptions, affecting everything from daily customer transactions to business operations. For smaller enterprises, which rely heavily on dependable banking systems, even minor interruptions can have significant economic impacts.

To minimize customer disruption, banks could implement a staged migration. Rather than transitioning all data and operations at once, banks can upgrade their systems in phases—starting with non-critical operations and gradually moving to critical ones. This approach would reduce the likelihood of complete service outages and give bank staff time to adapt to the new system progressively.

Banks could also divide their customer base by region or account type, implementing upgrades in cycles. This would limit downtime to a subset of customers at any one time, reducing operational load. Performing upgrades during off-peak hours, such as from 10 p.m. to 6 a.m., when transaction volumes are lower, could minimize disruptions to daytime operations.

Clear communication is essential here; banks must inform customers of expected downtimes in advance, using channels such as email, SMS, or app notifications, so they can plan around potential service outages. Customer support is crucial during system upgrades. Banks should reinforce their customer service departments to provide faster response times and robust troubleshooting.

Proactive updates through mobile apps, social media, and customer hotlines can keep customers informed about service status and any disruptions. Additionally, banks could offer alternative service channels, such as ATMs, mobile, and SMS-based transactions, to ensure access to critical services even if core systems are temporarily down.

Banks could enhance system resilience by deploying failover mechanisms and secondary systems to take over in case of primary system failures. This approach helps maintain continuity during upgrades, enabling essential transactions like fund transfers and balance checks to proceed without interruption.

Additionally, cloud-based storage solutions for critical banking data provide backup, reducing the risk of data loss during transitions. FinTech companies, such as OPay and PalmPay, have gained traction in Nigeria, especially when banks face technical issues. Banks could establish partnerships with these providers to offer temporary support for transactions during upgrade periods.

Customers could be directed to use these platforms for certain types of transactions, with the bank compensating any additional fees. Such partnerships would not only provide temporary relief during downtimes but also foster long-term innovation and service delivery improvements.

Core banking upgrades are essential for keeping pace with evolving technology and enhancing customer service. By adopting a phased approach, scheduling after-hours upgrades, and strengthening customer support, banks can better manage these transitions and minimize disruptions for customers.

Maymunah U. Abdulwahab is an intern at PRNigeria and a student of Ahmadu Bello University, Zaria. She can be reached via [email protected].