Nigerian tier-1 bank Guaranty Trust Bank (GTBank) has obtained a court order to recover ₦1.9 billion mistakenly credited to customer accounts between October 28 and 29, 2024. The error occurred when the bank processed duplicate transactions while handling unapplied NIP (NIBSS Instant Payment) inflows.

Upon discovering the error, GTBank began an internal investigation, which revealed that some of the funds had been moved to other banks, according to court filings. The bank asked the court to place restrictions on accounts that received duplicate funds, and the order was granted by Justice F.N Ogazi of the Federal High Court, Lagos, on Thursday. The order has been served on receiving banks, clearing the way for the funds to be returned.

GTBank did not immediately respond to a request for comments. The incident coincided with a period of significant disruption in GTBank's services following its decision to switch its core banking application from Basis to Finacle in September 2024. Developed by Infosys, Finacle is the most popular banking application in Nigeria's banking industry, and GTBank's leadership visited India as part of the process of deciding on the switch.

While the switch to Finacle was expected to streamline operations and enhance customer experience, it was fraught with difficulty. After the bank announced the completion of the migration in October 2024, customers began reporting erroneous transaction alerts, and for weeks, the bank's banking channels were either unusable or unstable. GTBank customers shared their frustrations over the disruptions and the bank's silence on social media platforms like X between September and November.

The bank issued a public apology in November 2024. The court documents do not explicitly tie the duplicate transactions to the migration, but documented incidents of customers completing transactions without receiving credit or debit alerts may suggest a link.

Technology challenges centering around core banking upgrades were a major theme of 2024, with at least four commercial banks switching or upgrading their software. This led to weeks of customer disruption and a central bank directive stating that banks must first receive regulatory approval before commencing such upgrades in the future.

The incident highlights the importance of rigorous testing and quality assurance in core banking system upgrades to prevent such errors. It also underscores the need for banks to prioritize customer communication and transparency during times of technical difficulties. As the banking industry continues to evolve, the ability to mitigate risks and ensure seamless customer experiences will be crucial for maintaining trust and loyalty.

In the broader context, the GTBank incident serves as a reminder of the potential consequences of technical errors in the financial sector. As banks increasingly rely on digital platforms and complex systems, the risk of errors and disruptions will continue to grow. It is essential for banks, regulators, and industry stakeholders to work together to develop and implement robust risk management strategies and ensure that customer interests are protected.