In 2024, six of Nigeria’s biggest banks spent a combined total of ₦268.7 billion ($171.5 million) to upgrade their technology infrastructure, according to financial statements filed with the Nigerian Exchange Limited.

This marks a major leap of about 74.5% from the ₦153.8 billion ($98.2 million) spent in 2023.

The driving force behind this spike? A need to modernize their core banking systems and catch up with fintech rivals like Opay, PalmPay, and Moniepoint, which continue to win over Nigerian customers, especially after the failed naira redesign in early 2023 revealed serious gaps in traditional banking systems.

Of the six banks, Guaranty Trust Holding Company (GTCO) made the biggest investment, putting ₦88 billion ($56.8 million) into IT.

Zenith Bank followed closely with ₦67.3 billion ($43 million), while UBA spent ₦48 billion ($30.5 million).

Stanbic IBTC, FCMB, and Wema Bank also made notable contributions, spending ₦33.5 billion ($21.3 million), ₦26.8 billion ($17.3 million), and ₦5.55 billion ($3.6 million), respectively.

Here’s a breakdown of their spending as shown in the chart (Source: Nigerian Exchange Limited): GTCO: ₦88 billion, Zenith Bank: ₦67.3 billion, UBA: ₦48 billion, Stanbic IBTC: ₦33.5 billion, FCMB: ₦26.8 billion, Wema Bank: ₦5.55 billion.

2024 saw major players like GTBank, Zenith, First Bank, Sterling Bank, and Access Bank overhaul their core banking platforms.

In October, GTBank moved from the BASIS platform to Finacle, developed by Infosys. Zenith Bank also ditched its older Phoenix system in favor of Flexcube by Finastra.

But these upgrades weren’t all smooth sailing. Many banks experienced long service disruptions that affected millions of customers.

Still, industry experts say the long-term benefits outweigh the short-term issues.

“The enhancement of core banking applications has stabilized the services of some banks,” said Ayodeji Ebo, Managing Director of Optimus by Afrinvest.

“The increased IT expenditure has mitigated the failure rate and downtime during financial transactions.”

One expert, who preferred to stay anonymous, explained that the devaluation of the naira made things even more expensive.

Some tier-1 banks now spend over $10 million a year just for licensing and support of these new systems.

Despite the challenges, industry leaders remain optimistic. Gbolahan Ologunro, a portfolio manager at FBNQuest Asset Management, said the focus on digital transformation is helping banks reach more customers and boost 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.

Thanks to these efforts, Nigeria’s financial inclusion rate rose from 56% in 2020 to 64% in 2023.

The Central Bank of Nigeria hopes this will hit 80% by 2026.

The IT upgrade wave has also helped vendors. Computer Warehouse Group (CWG) Plc, which provides IT services to banks and telcos, saw profits jump by 428.4% in 2024, reaching ₦3.04 billion for the first time.

CWG is one of the providers of Finacle, the new core banking software now used by several banks.

As the race to stay relevant continues, traditional banks in Nigeria are realizing that survival in the digital age means constant innovation, faster systems, and better customer experience.