Sterling Bank, a leading Nigerian bank with a market capitalization of ₦115.16 billion, has developed a custom-built core banking application software, SEABaaS, which it plans to license to financial institutions and fintech companies. This move is part of the bank's strategy to save costs by building its own core banking application software and then licensing it to other banks and financial institutions.

According to sources familiar with the matter, Sterling Bank has already pitched SEABaaS to MoMo, MTN's Mobile Money business, and is also targeting fintechs that want to move quickly and innovate. The bank believes that SEABaaS, built to give Sterling Bank the agility of a fintech, is perfect for fintechs that want to break free from traditional banking constraints.

Beyond fintechs, Sterling Bank also hopes to attract business from other banks, particularly tier-2 banks keen to localize costs. With tier-1 banks expected to spend ₦80 billion on licensing fees for core banking software in 2024 alone, SEABaaS may offer a more affordable alternative. However, industry insiders say that winning over banks will not be an easy task, as they will likely wait to see how SEABaaS handles end-of-year operations before committing.

SEABaaS was jointly developed by Bazara Tech Inc, Peerless Technologies, and a third undisclosed company. Although the exact cost of development is unknown, Sterling Bank was keen to localize costs, a significant consideration for banks that typically pay licensing fees in dollars for software like Finacle and Temenos.

This development is significant for the fintech and startup ecosystem, as it could disrupt the traditional banking software market and provide more affordable options for fintechs and banks looking to innovate and scale.