Cutting IT Costs And Troubled Bank Customers

Can we develop a homegrown, bespoke core-banking app to cut costs big time?
You have been in this boat before. You have upgraded to a new mobile phone. It took you days to move data to the latest phone. In the process, you could not access your WhatsApp data. Your friends, colleagues, and relatives could not reach you on WhatsApp. The majority of the groups you belong to were worried sick. Are you well? Had something bad happened to you? They wondered why they could not reach you. Eventually, you solved the challenge. Still, you could not retrieve some friends’ data. You were troubled for days.
On The One Hand
By going offline for extended periods, the banks are saying, ‘Hey customers, your time is worthless. Let us make you wait hours or even days before you access your money. What the bank customers have undergone in the last week is not 24/7 banking but 24/7 frustration. This frustration was glaring: Missed payments. Late fees. Failed transactions. Endless hold times.
On The Other Hand
An IT expert shared that over the years no bank has asked the question, “How can the bank cut over seamlessly without disruptions?’’ He said some of the banks have turned a bad habit and culture into a norm. Then the banks had spent so much money to acquire software and hardware, yet their understanding of this tool ’’is not that deep. I would not delve into this because we hate criticism.’’
He added that the banks’ explanation would make sense to the troubled customers. What happened was pure “technical and operational incompetence.’’ A troubled bank customer told me in one of the banking halls that, “I have the right to speak because my business is crippled by the banks’ technical failure. The issue is not perception management. It is a rollout mismanagement. Regardless of whatever messaging the banks put out, if you rely on the banks, you are doomed.”
In The Long Term
Sterling Bank kicked off the service disruptions in September when it cutover to SEABaaS, a new custom-built core banking application locally developed. GTBank followed. It migrated to Finacle from Basis software. Zenith Bank also shifted to Oracle’s Flexcube from Phoenix. Industry reports showed that the banks are looking for systems with better security.
Besides, the banks are cutting costs on banking software, which they acquired with dollars. Many of the banks rely on software from India. The applications are valued in dollars. The bottom line is that the banks are cutting IT costs and in the process, they are troubling the customers with endless service disruptions. An IT professional friend said that anytime the bank switches platforms, service disruption could not be overruled. It is like buying a new mobile phone. Transferring your data from the old to the new phone will pose a little challenge.
On a broader scale, an IT guru noted that when it comes to improving IT infrastructure management in banking, cloud migration is significant. Because large on-premise solutions do not measure up on affordability, dependability, and standardisation. These are the qualities modern businesses need.
‘’The banks do not need to make incremental changes but should focus on the areas where they can make the biggest improvements with the least long-term disruption. Combining this approach with a thorough assessment of current application usage and future needs ensures a smooth transition to the cloud and helps prevent delays’’, she advised.
The banks have failed in this area with many days of service disruptions, which have led to unhappy bank customers. Some of these customers could not access their funds. They could not remit payments. They could not receive payment. The customers were – in the word of another friend – ’’groping in the dark.’’
Research further showed that modern customers and businesses expect more from their banks. Since many bank customers are digitally aware, they expect the banks to keep up with the same pace. Ok. Can we develop a homegrown, bespoke core-banking app to avoid service disruptions? Save cost and build the Nigerian software industry? Sterling Bank has demonstrated this approach with minimal disruption to service. Maybe this tactic will make the customers happy. Now with the banks’ IT cost-cutting method, the customers are troubled.
In The Short Term
If the banks embrace locally developed core banking apps, the Nigerian software industry will be the biggest beneficiary. Maybe the customers will not be troubled after all.