Tech upgrade gulps N178bn in five banks

The combined spending of five Nigerian banks on ramping up their information technology was N178.77bn in the first six months of the year, The PUNCH reports.

An analysis of the financial statements of Zenith Bank, Access Bank, Guaranty Trust Holding Company, Wema Bank, and United Bank for Africa for H1 2024 indicated that they were aggressive in boosting their digital infrastructure, as their investment in this regard jumped by 203 per cent from N58.8bn in the prior period of last year.

A breakdown of IT expenditures shows that Zenith Bank spent N23.10bn on technology in the first half of 2024, a 166.54 per cent rise from N8.67bn during the same period last year.

However, on October 1, customers of Zenith Bank took to social media to voice their frustrations regarding ongoing difficulties with online banking transactions.

Customers’ challenges in making payments and using various features were reported on X (formerly Twitter).

This followed a notification from the bank on Saturday that it would undergo routine maintenance from September 29 to October 1.

In a statement shared on X, Zenith Bank announced that the routine maintenance would commence at 12:01 am and conclude by 5:00 am.

The notice read, “Please be informed that we are currently undertaking routine maintenance of our information technology infrastructure to enable us to significantly improve the quality of service rendered to you.”

The bank specified that its mobile banking app, USSD service, Internet banking, and corporate Internet banking platforms would be unavailable on October 1 between 12:01 am and 2:30 pm.

Despite this assurance, customers reported being unable to log into the app or conduct online transactions as of 8 am on October 2, with the downtime extending into its third day.

The recent incident follows a broader trend highlighted in The PUNCH, which reported that complaints from bank customers surged over 63.54 per cent in 2023, reaching over 10 million, up from 6.12 million in the previous year.

More than half of those complaints were attributed to one of the country’s largest banks, including Zenith Bank, Access Bank, Guaranty Trust Holding Company, Wema Bank, and United Bank for Africa.

In the period under review, Wema Bank spent N1.13bn on technology and alternative channels, a 59.03 per cent rise compared to N708m in the same period of 2023.

Meanwhile, UBA saw IT-related expenses soar by 248.20 per cent to N6.70bn in H1 from N1.93bn in H1 2023.

Access Bank led the banks with the highest IT expenditure, investing N111.24bn; a 264.55 per cent increase from N30.47bn in the previous year.

GTCO IT expenses rose by 115.12 per cent to N36.60bn in the first six months of the year compared to N17.02bn in H1 2023.

In August, several financial institutions raising capital announced plans to allocate $1.20bn from their proceeds to invest in technology and strengthen their cybersecurity infrastructure.

The apex bank has also directed commercial banks with international authorisation to increase their capital base to N500bn, while national banks are expected to reach N200bn, and those with regional authorisation to achieve a N50bn capital floor.

In April, it was reported that the combined operating expenses of 10 Nigerian banks rose by 42.51 per cent to N3.23tn in 2023, compared to N2.26tn the previous year, underscoring the financial pressure facing these institutions as they strive to enhance their services amid rising operational costs and customer complaints.

The PUNCH reports that 10 commercial banks spent N81.92bn on communications and IT services in the first half of 2022.