Sterling Bank, a tier-2 Nigerian financial institution with a market capitalization of ₦115.16 billion, is undergoing a significant transition in its core banking system, moving to a new custom-built software called SEABaaS. The migration, which started on August 30, has led to widespread service disruptions, leaving over 3 million customers unable to access any of the bank’s digital channels for several days. This has sparked a wave of complaints across social media platforms as customers expressed their frustrations with the ongoing downtime.
“I’ve been unable to open the One Bank app for over five days,” a Sterling Bank customer, who wished to remain anonymous, shared with TechCabal. The bank had earlier notified its customers about the potential service interruptions due to the upgrade but failed to provide details about the expected duration or extent of the disruption.
Understanding the Significance of a Core Banking System Migration
Upgrading or replacing a core banking system is a complex, time-consuming, and high-stakes endeavor for any financial institution. A core banking application is the central system that processes daily banking transactions, account management, and customer data, making it vital to the smooth functioning of any bank.
An unnamed software expert from a Nigerian bank emphasized the risks involved: “A core banking application is a critical tool for all financial institutions, so an upgrade of this nature is a big deal.” History has shown that such transitions can be problematic if not properly handled, with one infamous example being the Royal Bank of Scotland (RBS) in 2012. A failed system upgrade left over six million customers locked out of their accounts, resulting in a £56 million fine from regulators.
SEABaaS: The Future-Proof Banking Solution
Sterling Bank’s new core banking software, SEABaaS, was built to the bank’s specifications. While details about the system remain sparse, it appears that Bazara Tech Inc., a Nigerian software company, is behind its development. According to Bazara Tech’s website, SEABaaS is described as “a future-proof, platform-agnostic core banking SaaS solution designed to elevate user experience for enterprise customers.” The system boasts microservices architecture, APIs, hybrid and multi-cloud capabilities, a unified 360-degree customer view, and artificial intelligence (AI) and machine learning (ML) capabilities, promising to transform Sterling Bank’s operations.
Switching from its previous core banking system, Temenos T24, which is also used by major players like Keystone Bank and the Central Bank of Nigeria, Sterling Bank’s decision to develop a custom-built system is likely driven by cost, integration challenges with legacy systems, or a desire to avoid vendor lock-in. Other Nigerian banks, such as First Bank and UBA, use alternative popular software options like Finacle, underscoring the competitive landscape of core banking solutions.
Customer Discontent and the Way Forward
Despite the promising future SEABaaS holds for Sterling Bank’s operational efficiency and service offerings, the migration process has been fraught with customer dissatisfaction. Many users remain unable to access the One Bank app, leading to concerns that the prolonged downtime could prompt a mass exodus of customers to rival banks.
Sterling Bank has remained silent about the full details of the migration, but sources close to the bank have indicated that they plan to share more information about the new software and the upgrade process once the current service interruptions are resolved. In the meantime, the bank faces the urgent task of reassuring its customers and restoring full access to its banking services before further reputational damage is done.
As the Nigerian banking sector continues to evolve, Sterling Bank’s adoption of SEABaaS could signal a shift towards more custom-built, locally developed solutions. However, the success of this transition will depend largely on how swiftly and smoothly the bank can address the technical challenges it currently faces.
With major competitors closely monitoring the situation, the pressure is on for Sterling Bank to ensure that SEABaaS delivers on its promise to revolutionize banking services while avoiding the pitfalls of failed implementations seen in global banking history.
In the coming weeks, Sterling Bank is expected to provide a full public rollout of the new system, marking a significant step in its digital transformation journey.