Technology investment, rather than balance sheet size, will determine leadership in Nigeria's banking sector following the ongoing recapitalisation exercise, industry experts say. While 21 banks have already met the Central Bank's minimum capital requirements ahead of the March 31 deadline, analysts emphasize that competitive advantage will stem from strategic technology deployment.
Financial institutions leveraging artificial intelligence for credit assessment, fraud detection, and asset management will gain significant advantages in Nigeria's increasingly competitive banking landscape, according to Uche Uwaleke, a capital market economist speaking at a recent Arthur Steven Asset Management webinar.
Several tier-one banks have already made strategic moves in this direction. Wema Bank has upgraded its ALAT digital platform, while UBA and Access Bank have invested in predictive analytics for credit risk assessment, improving lending decisions and processing times compared to competitors using traditional methods.
Fintech acquisitions are emerging as a key recapitalisation strategy as banks seek to rapidly enhance their digital capabilities. The sector accounted for 31 deals, representing nearly 46 percent of total M&A activity, with companies like Moniepoint, Stitch, and Rank executing multiple acquisitions to strengthen their market position.
Akinjide Akande, a sector analyst, emphasizes that technology adoption now fundamentally determines competitiveness across the financial system. "It will not only make transactions faster, but it also makes business decisions smoother," he notes, highlighting the importance of AI-driven systems in processing loans and detecting fraud in real time.
The push toward digital transformation is supported by Nigeria's large internet user base, with the National Bureau of Statistics reporting over 150 million users, primarily accessing services through mobile devices. This digital-first environment creates opportunities for banks with strong mobile banking platforms to capture younger customers and increase transaction volumes.
For investors, technology adoption has direct implications for stock performance, as automated systems deliver improved efficiency and service quality, supporting more stable revenue growth over time.
