Six commercial banks in Nigeria ramped up their investments in information and technology (IT) by 44.66 percent, reaching a total of N205.34 billion, as electronic transactions gained momentum, according to a report by BusinessDay.
The surge in IT spending corresponded with a 43.73 percent increase in income from electronic transactions, totaling N331.61 billion, as revealed in the banks’ financial statements. This highlights a significant shift in the country’s payment landscape towards digital transactions.
Access Holdings Plc, the parent company of Access Bank, led the pack with the highest IT expenditure of N78.05 billion in the past year.
Other major players included Guaranty Trust Holding Company (GTCO), owner of GTBank, which increased its IT expenses to N50.24 billion, while Zenith Bank allocated N33.59 billion to IT infrastructure.
United Bank for Africa Plc (UBA) invested N23.19 billion, Stanbic IBTC Holdings Plc spent N19.34 billion, and Wema Bank allocated N1.42 billion to bolster their IT capabilities.
Among these banks, UBA reported the highest electronic banking income of N125.58 billion, followed by Access Bank with N101.62 billion, Zenith Bank with N51.82 billion, GTCO with N40.83 billion, Wema Bank with N7.35 billion, and Stanbic with N4.42 billion.
The surge in e-payment activities in Nigeria has been remarkable in recent years, with electronic payments growing by 54.55 percent year-on-year to N611.06 trillion in 2023 from N395.38 trillion in 2022, according to the Nigeria Inter-Bank Settlement System.
This growth has been partly fueled by the Central Bank of Nigeria’s (CBN) initiatives, including the introduction of withdrawal limits and the botched naira redesign policy in December 2022, aimed at promoting cashless transactions.
The CBN envisions a cashless economy by 2025, as outlined in its ‘Payments Vision 2025’ document, emphasizing the role of banks and fintech companies in facilitating online transactions.
However, as banks transition to digital platforms, challenges such as failed transactions and system glitches have become more prevalent, prompting customer complaints on social media platforms.
Despite these challenges, banks are expected to continue increasing their IT spending to accommodate the rising demand for cashless transactions in the country.
Industry experts, including Femi Adeoti, Group Managing Director of RoutePay, and Dahlia Khalifa, Regional Director for Central Africa and Anglophone West Africa at the International Finance Corporation, underscore the pivotal role of fintech in transforming Nigeria’s traditional banking systems and driving financial inclusion.
PLATFORM TIMES gathered that in response to recent downtime incidents, banks like GTBank have reaffirmed their commitment to ensuring service uptime and addressing technical issues promptly to minimize disruptions to customers’ transactions.
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