FEATURES: Nigerians groan as banking service disruptions obstruct businesses, taint reputations

“I’ve also had to absorb the cost of failed transactions,” lamented Adeyemi Ademola, a food seller on campus at Usmanu Danfodiyo University, Sokoto (UDUS), her voice tinged with frustration and despair.

Struggling to keep her business afloat, Ademola’s story highlights the pervasive challenges stemming from disrupted banking services. Her small shop, which supplies staples like rice, beans, garri, and other essentials to students, has been eerily quiet. The culprit? Persistent banking service disruptions, especially from Guaranty Trust Bank (GTB) and Access Bank, which her customers rely on for online payments.

Ademola’s predicament mirrors the experiences of countless others who cannot access essential banking services. GTB’s ongoing downtime—part of its transition to a new core banking application system—has left many in limbo.

Even a visit to the customer care service of the bank brought little solace, as the explanation of “technical disruptions” linked to recent system upgrades felt more like a dismissal than a solution. Such upgrades, ostensibly aimed at fortifying defenses against cyberattacks, have instead sown doubt about the security and efficiency of these systems.

The upgrades, though necessary, come with inevitable growing pains. Migrating vast amounts of customers’ data and integrating it across multiple platforms—from ATMs to mobile apps—is complex and time-intensive. Customers, however, bear the brunt of these transitions, enduring weeks or even months of service disruptions that hinder daily transactions.

In the past quarter alone, several commercial banks in Nigeria have initiated IT upgrades to bolster their operations and prepare for an increasingly competitive future. While these efforts are laudable, they have had far-reaching effects, straining banking operations and customer satisfaction.

The National Bureau of Statistics (NBS) reports that the banking sector’s contribution to Nigeria’s GDP rose to 16.36% in Q2 2024, a testament to significant technological investments. Yet, for many, these figures are cold comfort amidst recurring downtimes and transaction failures.

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Ademola’s weariness is palpable. She confides that her trust in traditional banking institutions, once the cornerstone of financial stability, is eroding. The persistent disruptions have cost her business revenue and undermined the basic operations on which her enterprise depends.

Lost Sales, Revenue, and Opportunities

The ripple effects of these banking failures are felt across various sectors. Rabi’u Bawa, a POS attendant, recounts her struggles: lost sales, revenue, and opportunities due to failed transactions. The memory of a recent incident still haunts her—a Sterling Bank system failure that left her unable to process payments. The frustrated customer walked away, leaving Bawa to shoulder the financial loss.

“This isn’t an isolated incident,” Bawa said, her tone heavy with frustration. She’s frequently faced delayed payments and disputes stemming from unprocessed transactions. When her account is debited, but the recipient remains untouched, she finds herself mired in time-consuming and costly resolution processes, often at the expense of her reputation.

The disruptions have had devastating consequences for Adepoju Victor, an entrepreneur dealing with laptop repairs and phone accessories. “The stress and anxiety have taken a toll on my mental health,” he admits, his voice betraying sleepless nights spent worrying about his business. “The banks need to take responsibility for their actions and find a solution to this recurring problem.” His sentiment is echoed by many who have poured their resources and efforts into enterprises now threatened by systemic banking inefficiencies.

Service Disruptions Violate Customers’ Rights

The Federal Competition and Consumer Protection Commission (FCCPC) has weighed in on the crisis, warning financial institutions sternly. According to a statement by Tunji Bello, the Commission’s Chief Executive Officer, these disruptions inconvenience customers and infringe upon their rights.

“Interruptions that impede customers from engaging in transactions or accessing essential funds are not merely an inconvenience,” Bello asserts. “They may constitute a violation of fundamental consumer rights.” The Commission’s stance underscores the urgency for banks to address these disruptions swiftly and decisively.

As customers continue to grapple with the fallout of these disruptions, Nigeria’s banking sector must balance technological advancements with reliable service delivery. Until then, entrepreneurs like Ademola, Bawa, and Victor remain at the mercy of a system struggling to adapt to its own progress.

By: Wonderful Adegoke

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