The surge in demand for digital banking services, especially in the wake of COVID-19 crisis, appears to be taking its toll on banks information technology (IT) infrastructure, given the spike in network outages recorded in the industry in recent weeks.
Findings by New Telegraph show that in the last two weeks, some lenders have reported network downtime that lasted for more than three days, a development that caused a lot of inconvenience for many customers, who, in line with the advice of the Nigeria Center for Disease Control (NCDC) and other public health authorities, have avoided entering banking halls since the outbreak of coronavirus, thereby embracing digital platforms. Specifically, the outage at FCMB was so serious that it led to the lender’s Managing Director, Mr. Adam Nuru, apologising via email to the bank’s customers and also informing them about measures that the financial institution was taking to resolve the problem.
For instance, one of the emails he sent to a customer, following the resolution of the problem, which was sighted by New Telegraph, partly reads: “Dear …, Yesterday, I wrote to you to provide an update on our efforts to resolve the service outage on our banking channels.
“I am pleased to let you know that the issues have now been fixed and service is fully back up on all channels. Going forward, we have strengthened our structures to ensure the stability of our platforms, thereby delivering seamless performance and user experience. As we ramp up on service delivery, due to the current backlog of transactions, you might initially experience some slowness, but this will be very temporary. “Again, I wish to tender our unreserved and heartfelt apologies for every inconvenience caused by the service outage. There are no words enough to express how painful it has been, knowing the challenges you faced over the last few days.
We have already taken extensive and incisive steps to nullify the risk of recurrence in future. “Moments like this are defining in any relationship, and we will speed-by make this right and rebuild the trust you have in us. I assure you that FCMB remains committed to you and your dreams, and we will continue to relentlessly deliver excellent services to help you fulfil your aspirations.”
In fact, in what now appears to be the typical occurrence during public holidays in the country, many bank customers, a few days ago, complained about the poor online banking services that they experienced during the Eid-el-Kabir public holidays. Many of the customers took to social media to talk about the hassle they went through while trying to access banking services, especially through USSD codes, mobile apps, Point of Sale (PoS) platform and Automated Teller Machines (ATMs). Significantly, data obtained from the live transaction updates of the Nigeria Inter-Bank Settlement System (NIBSS) indicates that there was an increase in PoS transaction failure rate during the Eid-el-Kabir festivities.
For instance, the figures show that about 23 per cent (309,016) of a total 1.3 million transactions carried out last Friday (as at 4pm), failed. Also, the failure rate hit 16.98 per cent, as 385,960 out of 2.27 million transactions were declined on Saturday.
The data also indicates that issuer banks contributed the most to the failure of the transactions, as 68,697 and 32,230 of the failed transactions were attributed to errors on their platforms. This was closely followed by errors emanating from the customers, which accounted for 37,034 and 65,619 of failed payments respectively. Industry sources attribute the recent network outages to lenders’ failure to sufficiently invest in IT infrastructure that is roboust enough to absorb the increased pressure occasioned by the surge in the number of bank customers that have embraced digital platforms in the last few months. According to latest data from NIBSS, the value of transactions done across PoS channels in the country increased from N1.14 trillion recorded between January and May 2019 to N1.64 trillion within the same period in 2020. Commenting on the issue in a chat with New Telegraph, the Head of IT department of a Tier 2 lender, who did not want to be named, said: “The problem is that the harsh business environment is making more bank CEOs to be even more reluctant to spend the kind of money that is needed to procure the right IT infrastructure.
Those things don’t come cheap; so, most times, many bank MDs will ignore expert advice and prefer to buy what they consider to be cheaper, functional alternatives.” The bank official noted that although the industry recognised that there is a surge in the number of customers who have adopted digital banking due to concerns about contracting coronavirus, many CEOs are still finding it difficult to approve purchase of the right IT equipment. New Telegraph had reported in May that banks were seizing the opportunity brought by coronavirus containment measures (social distancing in banking halls) to boost their digital banking services.
The Chief Executive Officer, First Bank of Nigeria Limited, Dr. Adesola Adeduntan, for instance, told stakeholders at a virtual corporate customers forum webinar organized by the lender during the period that the bank would maximise the opportunities that have come to light due to the disruptions caused by the COVID-19.
He said that the bank had strengthened its digital channels, noting that 85 per cent of its transactions were now on alternative channels and that it will continue to push this to reach the 90 per cent set target. “COVID-19 is giving business leaders an opportunity to rethink on an established wisdom. It is a major crisis that we need to deal with and we must change it from a bad to good crisis. It offers an opportunity to reinvent our business. We have to think without the box,” Adeduntan said.