The Impact of AI-Driven Digital Transformation on Customer Experience in FUGAZ Banks in Nigeria

Artificial intelligence (AI) has become central to the digital transformation strategies of Nigeria's five most systemically significant deposit money banks: First Bank, United Bank for Africa, GTBank, Access Bank, and Zenith Bank, collectively known as FUGAZ. These institutions have invested substantially in AI-driven technologies including chatbots, predictive analytics, fraud detection systems, and automated customer service platforms, with the stated ambition of improving customer experience and service delivery. Yet the relationship between these investments and their actual customer experience outcomes remains poorly understood and, in the existing literature, insufficiently examined. Operational metrics: transaction speeds, fraud detection rates, system uptime; have been measured with some rigour, but whether AI-driven transformation has made banking genuinely better for Nigerian customers, in the full sense of that phrase, has not.
This study argues that AI-driven digital transformation in Nigerian banking has delivered efficiency without consistently delivering empathy. The efficiency gains are real: AI has made routine banking transactions faster, more available, and more personalised for a significant portion of FUGAZ customers. But efficiency is not the whole of customer experience. When customers encounter banking services at their most consequential moments: a frozen account, a disputed transaction, a declined loan application, what they require is not speed but responsiveness; not automation but human judgment and felt fairness. These are precisely the dimensions of customer experience that current AI systems are least equipped to provide, and their systematic absence from AI-driven service design represents the central failure of FUGAZ banks' transformation programs as evaluated from a customer experience perspective.
This research employs a qualitative secondary research methodology, structured as an embedded multiple case study of FUGAZ banks. Drawing on fifty peer-reviewed academic publications and credible institutional reports sourced from Emerald Insight, ScienceDirect, ResearchGate, and Taylor & Francis Online, a structured PRISMA-informed literature selection process was followed. The resulting evidence was examined using thematic and comparative analysis. The study is guided theoretically by the Technology Acceptance Model (TAM): extended to incorporate infrastructure reliability, institutional trust, and digital competency as mediating factors specific to the Nigerian context, Service-Dominant Logic (SDL), and a project management benefits realisation perspective. Together, these frameworks provide a more complete analytical lens than any single model could, capturing technology adoption behaviour, value co-creation dynamics, and the gap between project delivery and actual customer benefit.
The findings reveal that AI-driven transformation has improved customer experience conditionally rather than universally. For urban, digitally literate customers engaging with routine transactions, measurable improvements in speed, availability, and personalisation are documented. For customers in rural areas, those with lower digital literacy, and all customers navigating emotionally weighted or complex interactions, the evidence is far less positive and in some cases points toward active deterioration in service quality since AI displaced human interaction. Infrastructure constraints, digital literacy gaps, institutional trust deficits, and weak AI governance frameworks are identified as the primary conditions that determine whether AI investment translates into genuine customer value. Across all five FUGAZ institutions, a systematic gap is observed between what AI systems have delivered technically and what customers have experienced in practice: a benefits realisation failure that cannot be resolved through further technical investment alone.
This research work concludes that FUGAZ banks must move beyond an efficiency-centred conception of AI's value to their customers. Sustainable improvement in customer experience through AI requires hybrid service models that preserve human interaction pathways for complex and emotionally weighted situations; targeted investment in customer digital literacy as a precondition for AI value delivery; transparent AI governance frameworks that address the accountability and redress gaps currently undermining institutional trust; and infrastructure-sensitive design that ensures AI services function reliably across Nigeria's diverse socioeconomic geography. From a project management perspective, AI initiatives in Nigerian banking should be evaluated not on deployment metrics but on whether their intended customer experience benefits are being realized and for whom.

Artificial intelligence; digital transformation; customer experience; Nigerian banking; FUGAZ banks; Technology Acceptance Model; benefits realization

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