Wednesday , June 12 2024
Access, Zenith, UBA Splashes N134.8 Billion on IT Infrastructure in 2023

Access, Zenith, UBA Splash N134.8 Billion on IT Infrastructure in 2023

In a year marked by a surge in electronic business revenue for Nigerian tier-1 banks, IT infrastructure has become a top priority.

Driven by the Central Bank of Nigeria’s cashless policy and a growing preference for mobile and online banking, banks are witnessing a significant rise in e-business activities. However, analysts warn that continued growth hinges on robust IT infrastructure investments to ensure seamless transactions and robust security measures.

According to a financial report released, Access Holdings increased its spending on IT infrastructure by 75% to N78 billion in 2023. Similarly, UBA witnessed a staggering 149% rise in IT spending, reaching N23.2 billion compared to the previous year. Zenith Bank also increased its IT spending from N30.9 billion in 2022 to N33.6 billion in 2023, representing a 9% increase.

Together, Access Holdings, Zenith Bank, and UBA spent N134.8 billion on IT infrastructure for the period under study.

A report from the institution’s financial statement has also disclosed that the Nigerian tier-1 banks are now reaping the rewards of a booming e-business sector, with electronic business revenue surging in 2023.

Cumulatively, the Tier -1 banks earned N392 billion from electronic business in 2023.

A collective N392 billion ($900 million) was generated by the top five banks (UBA, Access Holdings, FBN Holdings, GTCO Holdings, and Zenith Bank) in 2023 from electronic business activities, including mobile banking, USSD channels, ATMs, and POS payments. This represents significant growth compared to the previous year.

UBA emerged as the leader, raking in N125.5 billion ($288 million), a 59% increase. Access Holdings followed closely with N99.1 billion ($228 million), reflecting a 66% year-on-year jump.

While FBN Holdings’ audited results are yet to be released, interim figures indicate a 20% increase in e-business income to N66 billion ($152 million) in 2023.

This growth in e-business revenue is prompting banks to ramp up their IT infrastructure spending. Access Holdings, for example, increased its IT expenses by 75% to N78 billion ($180 million) in 2023. Similarly, UBA witnessed a staggering 149% rise in IT spending, reaching N23.2 billion ($53 million) compared to the previous year.

“The growth in e-business revenue for the banks is an indication that the CBN’s cashless policy is having positive effects,” said Kayode Joseph, CEO of Chronos Technology. However, he emphasized the need for further investment “to address the issues of failed transactions and secure their systems against fraud.”

Analysts believe seamless transactions and robust security measures are crucial for sustained e-business growth. The increasing popularity of electronic payments is evident across the industry, with fintech companies also playing a significant role. According to the Nigeria Inter-Bank Settlement System (NIBSS), electronic payment transactions in Nigeria reached a record N600 trillion ($1.4 trillion) in 2023, a 55% increase from 2022.

 

About Bukola Olanrewaju

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