The effect of digital transformation on business banking regulatory compliance: A case study of First Bank Nigeria, Lagos.
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Background of the Study
Digital transformation in business banking is not only about enhancing operational efficiency but also about ensuring that regulatory compliance is maintained amid rapid technological changes. First Bank Nigeria, Lagos, has implemented various digital solutions—including automated reporting systems, digital risk assessment tools, and integrated compliance management platforms—to streamline its regulatory processes (Oluwaseun, 2023). These digital tools enable real-time monitoring of transactions and facilitate immediate compliance reporting, thereby reducing the risk of regulatory breaches. The bank’s digital transformation journey is driven by the need to improve transparency, accuracy, and timeliness in meeting statutory obligations (Ibrahim, 2024).
In the competitive landscape of business banking, regulatory compliance is paramount. Digital transformation supports the consolidation of data across multiple systems, enabling a unified approach to compliance management. Automated processes reduce human errors and ensure that compliance checks are consistently applied. However, the transition to digital compliance solutions also presents challenges, including the integration of new digital tools with existing regulatory frameworks and legacy systems, as well as the need for continuous system upgrades to adhere to evolving regulations (Adeleke, 2025). Furthermore, ensuring robust cybersecurity to protect sensitive compliance data remains a critical concern. This study examines the effect of digital transformation on regulatory compliance in business banking at First Bank Nigeria, Lagos, evaluating both the benefits and the challenges involved.
Statement of the Problem
Despite its investments in digital transformation, First Bank Nigeria, Lagos, faces several challenges in aligning its digital systems with regulatory compliance requirements. A significant issue is the integration gap between new digital platforms and older legacy systems, which often results in data inconsistencies and delays in compliance reporting (Chinwe, 2023). This misalignment can lead to inadvertent breaches and increased scrutiny from regulatory bodies. Moreover, the rapid pace of regulatory changes requires continuous system updates, which impose additional financial and operational burdens on the bank (Ogunleye, 2024).
Another problem is the limited digital literacy among compliance staff, which hampers the effective use of advanced digital tools. The resistance to change and the need for frequent staff training further exacerbate the situation, reducing the overall efficacy of digital compliance measures. Additionally, cybersecurity threats pose risks to the integrity of compliance data, and any breach could result in severe penalties and damage to the bank’s reputation (Akinola, 2025). These challenges underscore a critical gap between the intended benefits of digital transformation and the practical realities of regulatory compliance in business banking.
Objectives of the Study
• To evaluate the impact of digital transformation on regulatory compliance in business banking at First Bank Nigeria, Lagos.
• To identify integration challenges between digital tools and legacy systems in compliance management.
• To assess the role of staff training and cybersecurity in ensuring effective digital compliance.
Research Questions
• How does digital transformation affect regulatory compliance in business banking at First Bank Nigeria?
• What integration challenges exist between digital platforms and legacy systems in compliance management?
• How do training and cybersecurity measures influence the effectiveness of digital compliance solutions?
Research Hypotheses
• H1: Digital transformation significantly improves regulatory compliance in business banking at First Bank Nigeria.
• H2: Integration issues between new digital tools and legacy systems negatively impact compliance outcomes.
• H3: Enhanced staff training and cybersecurity are positively correlated with effective digital compliance.
Scope and Limitations of the Study
This study is confined to the business banking division of First Bank Nigeria, Lagos, with a focus on regulatory compliance issues related to digital transformation. Limitations include restricted access to internal compliance data and rapidly evolving regulatory standards.
Definitions of Terms
• Digital Transformation: The integration of digital technologies into business processes.
• Regulatory Compliance: Adherence to laws, regulations, and guidelines governing financial operations.
• Legacy Systems: Older IT infrastructures that may not integrate seamlessly with new digital solutions.
• Cybersecurity: Measures implemented to protect digital systems from threats.
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