Until the latter half of 2024, core banking applications (CBAs) attracted little public attention outside Nigeria’s banking industry. That changed when several major commercial banks switched or upgraded their CBAs, disrupting banking services for millions of customers. But five years before core banking was on Nigerians’ lips, the founding team at Kuda, a Nigerian neobank which boasts over seven million customers, knew that building its CBA could be the difference between success and failure. “It was, of course, one of the hardest and probably the most daring decisions I’ve ever taken in my professional life,” Musty Mustapha, Kuda’s co-founder and chief technology officer, said about the decision to build an in-house CBA. “I knew I had to stick my neck on the line with my founding partner, the investors, the board, and everybody else.” Banking’s economic logic has not changed much since its early days: institutions collect deposits from customers, guarantee access to the deposits, and finance the economy by extending credit. What has changed is the mechanics and machinery powering it. Today, the core banking application, an always-on ledger, is the software that records and powers every deposit, loan, and transaction in a bank. As the engine of modern banking, it ensures that accounts are updated in real time, that bank operations are reliable and scalable, and that the bank can launch and manage products. How it happened In 2019, Kuda was still small enough that its key decision-makers could fit on a small table. There were no headline venture capital firms like Target Global yet. The neobank was live and growing fast, but running on a third-party core banking provider. This is the model most financial institutions in Nigeria rely on because building core banking infrastructure takes time, effort, and capital that could be better spent elsewhere. Apart from Kuda, only a handful of Nigerian financial institutions, like Moniepoint and Sterling Bank, have developed their own core banking applications in-house. However, inside Kuda, the third-party CBA was starting to crack under the weight of the neobank’s ambition. More customers and product releases drove demand and a growing intolerance for instability, placing pressure on the CBA. Mustapha knew that this tension could jeopardise his young startup’s future. A series of conversations with his engineers and Kuda’s CEO, Babs Ogundeyi, led to what eventually became NERV, Kuda’s in-house core banking system, named after the human nervous system because it sits underneath everything and quietly controls how Kuda operates. Mustapha insisted on one point above all else during our hour-long conversation in October 2025: when Kuda started building NERV, Nigeria’s banking or fintech market had not built an in-house core banking system like Kuda was attempting to. “At the time when we built NERV, there was no fintech or banking-related company that had built its own core banking system,” he said. “NERV is the pioneer in-house-built core banking solution by a bank in Nigeria.” However, Moniepoint began its in-house core banking development in 2020, and several Nigerian companies like Appzone’s Qore already sold core banking products to Nigerian microfinance banks. NERV began as most banks think about CBAs: shopping. Musty approached multiple local and foreign providers, seeking a CBA robust enough for what Kuda wanted to become and cheap enough for what Kuda could afford in 2019. The startup eventually launched in August 2019 on a local core banking provider. Then reality set in as Kuda grew to a million customers quickly, and the system felt brittle under this weight. Mustapha described three issues that kept compounding: it could not scale with customer growth, could not be adapted to Kuda’s needs, and above all, could not be relied upon to stay up. “If you are offering a financial service, the minimum that you can do is to ensure that your systems are stable for your customers,” he said. “If you cannot achieve this, you can as well just pack your load and go home.” So, Kuda did what most institutions avoid: it kept looking for alternatives before deciding there weren’t any that met its needs within the constraints it had. At that point, Mustapha said that the question became existential rather than technical: what kind of company are we building? His answer was simple. “Kuda is an engineering-first company,” he said. “That is the kind of company we’re trying to build: using engineering resources to solve financial services problems in Nigeria.” Mustapha added that Kuda never needed to run a long persuasion campaign, even though building a core banking system could cost tens of millions of dollars and is slow. In September 2019, the company had raised only $1.6 million in a pre-seed round from angel investors and family offices. This lack of institutional capital meant fewer layers of approval, less red tape, and fewer people who could veto a high-conviction decision. But even then, Kuda avoided betting the business on a rebuild while it was still learning to exist. Instead, NERV ran in parallel to the existing CBA. Kuda continued operating on the third-party core while engineers built NERV in the background. That way, if it failed, the bank would not die. It would keep running, find a new provider, or endure the one it had. “It wasn’t like the company stopped operating,” Mustapha said. “We were still on the third-party provider system, still serving customers, still growing, but we’d decided and were treating it as a side project.” Kuda had another advantage; its engineering talent was willing to take on a long, invisible build while still maintaining production systems. “There’s no way I would have even attempted to go ahead with it if that quality was not there,” Mustapha said. “I’m speaking about an actually world-class team.” The mechanics of NERV NERV’s architectural choices were less exotic than the outcome itself. Kayode Ilesanmi, one of the engineers who built it, said the team started with a clear conclusion: if Kuda wanted scalability and flexibility, it couldn’t build a monolith. “We just had to say, ‘You know what, for
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