Retail banks upgrade tech to take on digital challengers

Nigerian banks invested heavily in new infrastructure last year, upgrading core banking systems to take on the threat from successful digital players. Ayodeji Ebo, MD of Optimus told TechCabal that improved core banking systems had stabilised services and the increased IT expenditure had mitigated the failure rate and downtime during financial transactions. "He added that the cost of the banking software--priced in dollars--nearly doubled due to the naira devaluation." Another expert told TechCabal that the cost of core banking licences and support to tier-1 banks is in the region of $10 million a year. "Still, banks see long-term benefits. Gbolahan Ologunro, portfolio manager at FBNQuest Asset Management, said the digital push is key to expanding retail customer acquisition and financial inclusion. 'Improving customer experience through digital platforms would increase the appetite of those who are yet to be banked and get themselves finally included in the financial net,' he said. Nigeria's financial inclusion rate rose to 64% in 2023, up from 56% in 2020, according to data from EFInA. The Central Bank of Nigeria expects that figure to hit 80% by 2026."