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In a bold move to modernize operations and stay ahead in an increasingly digital financial ecosystem, six major Nigerian banks collectively spent ₦268.7 billion ($171.5 million) on technology infrastructure and digital services in 2024. This 74.5% increase from ₦153.8 billion ($98.2 million) in 2023 signals a robust shift toward compliance automation, risk mitigation, and customer-centric banking, driven by intensifying competition from agile fintech players.
The banks—Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), Zenith Bank, Wema Bank, Stanbic IBTC Holdings, and FCMB Group—have significantly scaled their IT budgets, largely due to overhauls of core banking systems, essential for enabling real-time processing, regulatory compliance, and seamless customer experience.
GTCO led the pack with a spend of ₦88 billion ($56.8 million), followed by Zenith Bank at ₦67.3 billion ($43 million). UBA and Stanbic allocated ₦48 billion ($30.5 million) and ₦33.5 billion ($21.3 million), respectively, while FCMB and Wema invested ₦26.8 billion ($17.3 million) and ₦5.55 billion ($3.6 million).
This surge in IT spending comes as traditional banks face mounting pressure from fintech disruptors like Opay, PalmPay, and Moniepoint—whose popularity soared in the wake of Nigeria’s 2023 currency redesign crisis. The incident exposed the limitations of legacy banking systems and highlighted the urgent need for compliance management systems, regulatory change management, and digital transformation to ensure operational resilience.
In 2024, leading banks, including GTBank, Zenith, First Bank, Sterling Bank, and Access Bank, undertook massive core banking system migrations. GTBank transitioned from Basis to Infosys’ Finacle, while Zenith Bank replaced its legacy Phoenix platform with Finastra’s Flexcube. Although these upgrades initially led to service disruptions affecting millions, they are now stabilizing transaction services and enabling faster, more secure banking operations.
“The enhancement of core banking applications has stabilized the services of some banks,” noted Ayodeji Ebo, Managing Director at Optimus by Afrinvest. “The increased IT expenditure has reduced failure rates and transactional downtimes”—a crucial aspect of regulatory risk management and financial crime prevention.
Ebo further explained that the cost of software—typically priced in U.S. dollars—has surged due to naira devaluation, with Tier-1 banks reportedly spending at least $10 million annually on licensing and support for core banking software. Despite the high costs, industry experts emphasize the long-term benefits, including improved regulatory reporting, compliance analytics, and expansion of financial inclusion.
According to Gbolahan Ologunro, Portfolio Manager at FBNQuest Asset Management, digital transformation is essential for acquiring new retail customers and integrating the unbanked into Nigeria’s financial ecosystem. “Enhancing digital platforms improves customer experience and increases the appetite of those not yet banked to join the financial net,” he said.
Nigeria’s financial inclusion rate rose from 56% in 2020 to 64% in 2023, according to EFInA. The Central Bank of Nigeria (CBN) targets an 80% inclusion rate by 2026—an ambition supported by compliance-driven technology investments and collaborative regulatory frameworks.
IT vendors are also reaping the rewards of this digital acceleration. Computer Warehouse Group (CWG) Plc, which supplies managed services and banking software integration—most notably Infosys’ Finacle—posted a staggering 428.4% profit growth, reaching ₦3.04 billion in 2024.
As Nigerian banks continue to expand their compliance technology capabilities and adopt RegTech solutions, the focus is no longer solely on replacing outdated systems. Instead, the race is on to deliver governance, risk, and compliance (GRC) efficiency, faster innovation cycles, and superior customer experience in a competitive, tech-driven financial landscape.
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