Breaking: How Sterling Bank’s Recurrent Tech Meltdown Ruined Its Reputation

– Business owners lose millions as banking operations grind to a halt

– Medical emergencies stall as bank’s failed upgrade locks users out of their funds
– Angry customers storm branches, threatening to shut down operations if issues persist

It has been a season of silence from the vaults of Sterling Bank, but it is not the peaceful, solemn quiet of prosperity. Instead, this silence stretches like an unending night, where livelihoods flicker and die, and the urgent hum of commerce is stilled.

For two weeks now, customers of Sterling Bank have watched in growing frustration as the bank’s digital arteries have choked under the weight of its new core banking system. The promises of innovation and ease have soured into a painful experience for millions, and in the heart of Lagos, anger simmers, ready to erupt. …CONTINUE READING

“I’ve been unable to open the One Bank app for over five days,” lamented one customer in a social media post, reflecting the sentiments of many who have been left at the mercy of a system that seems to have forgotten them.

Across Nigeria, the story is the same: businesses unable to pay suppliers, individuals struggling to make critical payments, and ordinary people left counting the cost of an institution’s technological failure.

The scenes outside Sterling Bank branches are becoming emblematic of the widespread discontent. Customers, once loyal, now throng the premises demanding explanations and solutions. At the Iyana Itire branch, tensions ran high as frustrated individuals vented their anger, some calling for mass protests and legal action against the bank. “We’ll camp outside here until they fix this,” one protester declared.

The frustration reached a boiling point. On Wednesday, a group of agitated customers gathered at the gate, threatening to shut down the branch if their issues were not resolved.

“We’ve had enough,” said one customer, visibly angry. The group issued an ultimatum: if their funds were not credited to their accounts within the next 24 hours, they would shut down the bank’s operations themselves.

The loss of trust is perhaps the most damning outcome of this crisis. Even as Sterling Bank promises to resolve the issues in the coming days and prepare for a grand rollout of its new software, the damage to its reputation is already severe. Many customers are unwilling to wait for the bank to “pacify” them; they are simply moving on.

The accusation that the bank was using customers’ funds for other purposes stoked fears of mismanagement, adding to the cloud of uncertainty surrounding the crisis. Many customers voiced concerns that Sterling Bank, by withholding their funds, was further endangering their lives and livelihoods.

“They’re using our money for business and giving us excuses about system upgrades. I can’t even access my account to pay for urgent medical treatment,” said a customer at the Abule Egba branch.

For many Nigerians, the bank’s failure is more than an inconvenience; it is a life-threatening issue. One of the most harrowing aspects of the crisis is its impact on those needing urgent medical services. “I was at the hospital, and I couldn’t pay for my mother’s surgery because the app wouldn’t work,” said a distraught customer, recounting her ordeal. “I had to beg for help, and still, I’ve not been able to access my funds.”

Business owners have also been hit hard. A once-thriving Lagos trader disclosed that he lost several key suppliers because he was unable to make payments on time. “They think I’m unreliable now. How do I explain that it’s my bank and not me?”

The consequences of Sterling Bank’s inefficiency ripple across various sectors of the economy, from small businesses to service industries, each of them tethered to the bank’s now-stuttering engine. For many, the breakdown has brought their operations to a grinding halt, forcing them to consider alternative banking options. “I’m done with Sterling Bank,” said one customer in line at a Lagos branch. “As soon as I get my money out, I’m closing my account.”

The root cause of this banking catastrophe lies in Sterling Bank’s decision to switch from the Temenos T24 core banking system, used by several major Nigerian banks, to SEABaaS, a custom-built application from Bazara Tech Inc. The upgrade began on August 30 and was intended to be a transformative step forward in the bank’s operations. But the transformation has been anything but smooth.

While the bank had notified customers of potential service disruptions during the migration process, it provided no specifics, leaving customers ill-prepared for the magnitude of the outage. Over two weeks later, many banking channels remain inaccessible, rendering customers helpless in critical moments.

SEABaaS, described by Bazara Tech as a “future-proof, platform-agnostic core banking SaaS solution” that promises AI capabilities, hybrid cloud infrastructure, and seamless user interfaces, was meant to elevate the banking experience. Yet, the very complexity and ambition of this system seem to have bogged down its rollout, sparking questions about whether the bank fully anticipated the risks involved in such a massive transition.

The parallels to international banking failures are hard to ignore. A botched system upgrade by the Royal Bank of Scotland (RBS) in 2012 left over six million customers stranded for days, resulting in the bank being fined £56 million. Sterling Bank’s ongoing issues may yet spiral into a similar crisis if they cannot swiftly resolve the technical problems that have left customers in the lurch.

“This has become a recurrent trend with the bank. We experienced something similar in the last quarter of 2023 and early quarter of this year. I think Sterling Bank has more serious issues. This is more than an operational glitch. To worsen the situation, the bank has refused to put money in its ATMs. The Central Bank of Nigeria (CBN) must intervene before the bank ruins its customers completely,” said Mr. Thomas, an engineer and customer at its Abule Egba branch.

For Sterling Bank, the stakes could not be higher. The ongoing network problems have caused untold damage to its customer base and, by extension, the wider economy. The services sector, in particular, has been hit hard, with transactions delayed or outright blocked due to the bank’s inefficiency.

As the days drag on, more and more customers vow to close their accounts, and the specter of financial ruin looms large over Sterling Bank’s once-ambitious transformation. In the end, the bank may find that its quest for innovation has instead paved the way for an exodus—one that leaves a trail of disillusionment and distrust in its wake.