In a strong show of commitment to digital transformation, six of Nigeria’s largest banks collectively spent ₦268.7 billion ($171.5 million) on IT infrastructure and technology services in 2024. This represents a 74.5% increase from the ₦153.8 billion ($98.2 million) recorded in 2023, driven by sweeping upgrades to core banking systems and increasing pressure from nimble fintech competitors.
The six banks; Guaranty Trust Holding Company (GTCO) Plc, Zenith Bank Plc, United Bank for Africa (UBA) Plc, Stanbic IBTC Holdings, FCMB Group Plc, and Wema Bank Plc are racing to modernize their systems to remain competitive in a financial landscape where fintech players like Opay, PalmPay, and Moniepoint are gaining significant ground, especially among digitally active Nigerians.
Leading the charge is GTCO, with an IT expenditure of ₦88 billion ($56.8 million), followed by Zenith Bank at ₦67.3 billion ($43 million). UBA spent ₦48 billion ($30.5 million), Stanbic IBTC allocated ₦33.5 billion ($21.3 million), FCMB committed ₦26.8 billion ($17.3 million), while Wema Bank invested ₦5.55 billion ($3.6 million).
Much of this spend has been channeled into core banking system migrations. In 2024, major banks including GTBank, Zenith, First Bank, Sterling Bank, and Access Bank initiated or completed system upgrades.
For instance, in October 2024, GTBank switched from its legacy Basis software to Finacle, developed by Infosys. Similarly, Zenith Bank migrated from Phoenix to Flexcube, a core banking application by Finastra. While these transitions aimed to boost system efficiency, they were not without challenges. Customers across several banks experienced service downtimes and delays during the migration period.
According to Ayodeji Ebo, Managing Director at Optimus by Afrinvest, the IT investments have led to increased system stability, reducing downtime and transaction failures. However, he also noted that software license fees—often denominated in U.S. dollars—became significantly more expensive due to the naira’s devaluation.
A core banking expert familiar with the process shared that tier-1 Nigerian banks typically spend over $10 million annually on licensing, implementation, and support for core banking platforms.
Despite these costs, banks are banking on long-term benefits. Gbolahan Ologunro, Portfolio Manager at FBNQuest Asset Management, emphasized that enhancing digital services is vital to expanding customer acquisition and deepening financial inclusion.
“Better digital experiences will attract more unbanked Nigerians, encouraging broader participation in the financial system,” he explained.
Nigeria’s financial inclusion rate climbed from 56% in 2020 to 64% in 2023, with the Central Bank of Nigeria targeting an ambitious 80% by 2026. Technology is seen as central to achieving this goal.
The surge in bank IT spending is also driving growth for tech service providers. Computer Warehouse Group (CWG) Plc, which offers managed services and banking software, posted a 428.4% increase in profit, reaching ₦3.04 billion in 2024—marking its first-ever billion-naira profit. CWG is a key vendor of Finacle, one of the preferred core banking solutions in Nigeria.
As the battle for relevance in Nigeria’s evolving financial sector heats up, traditional banks are realizing that staying competitive goes beyond periodic upgrades. The focus has now shifted to creating agile, secure, and customer-centric platforms that match the speed and convenience offered by fintech startups.
Legacy infrastructure is no longer an excuse. In today’s market, digital readiness determines market leadership.
