Worried by the increasing incidence of bank frauds due to the emergence of revolutionised payments system in the country, which also opened new windows for fraudulent manipulations, the Central Bank of Nigeria (CBN) initiated the Bank Verification Number (BVN) scheme last year. It is a system whereby individual banks collect their customers’ biometric data that is then collated to serve as a centralised biometric identification system for the entire industry.
Unfortunately, many bank customers are yet to key into the scheme, barely three months to the deadline given to all bank account holders to collect the new number. Obviously, many people do not understand its essence because, only a few years back, bank customers were asked to migrate to the 10-digit Nigeria Uniform Bank Account Number (NUBAN), as part of efforts to improve services in the financial sector. So, asking them to go for yet another scheme that seems to them to serve the same purpose as the NUBAN is unnecessary.
But this is where such bank customers are mistaken. Trust is a critical element in banking. Where this is eroded, people become wary of keeping their money in the banks. And in Nigeria, as in many other parts of the world where bank frauds are on the increase, it becomes imperative for the bankers and regulatory agencies to move miles ahead of fraudsters who are never tired of inventing new tricks to beat whatever security arrangements that are put in place, to checkmate their activities.
We also have people who take advantage of the lack of the centralised platform that the BVN offers to operate multiple accounts and take loans that they never intended to repay. The activities of such people who constitute serious risks to the banking sector would be drastically curtailed, if not eliminated, when every bank customer gets the BVN.
Part of the beauty of the scheme is that the individual bank customer’s biometric information that is generated from the registration is a once-and-for-all requirement. So, even if a customer has many bank accounts, all he or she needs do is register for the BVN in any of the banks and the information would automatically be linked to all his or her bank accounts as well as be integrated in the banking system, generally.
Because it is not easy to manipulate biometric information, BVN protects customer bank accounts from unauthorised access, thus strengthening the financial system; it also makes detection of fraudulent/duplicate bank accounts as well as blacklisted customers easier. When fully integrated, BVN is expected to provide a synchronised efficiency to banking since all banking operations will be verified using the same method, reducing cases of human error or inconsistency.
With BVN, transaction authentication would be done essentially using only biometric and a PIN; eliminating the use of cards. So, illiterate bank customers therefore do not have to worry much about the difficulties posed by the use of cards because transactions can still be done even if one forgot one’s PIN.
In order to make registration for the BVN customer-friendly, enrolling for the scheme has been simplified. All a bank customer is supposed to do is walk into his or her bank branch, fill and submit the BVN enrolment form; the customer’s biometric information such as fingerprints and facial imagery, signature, etc. are then recorded and an acknowledgment slip with transaction ID is issued to him or her. A BVN is then created and customer is alerted to arrange to pick it up. To guarantee the integrity of the process, registration can only be done by the individual customer in the bank, not online or by proxy.
Bank customers must take advantage of the initiative before the restrictions on customers without the BVN take off on July 1. With effect from that date, such customers would be deemed to have inadequate know-your-customers and their transactions may be declined. But the CBN and the deposit banks too must sustain the tempo of enlightenment until everyone that should be included has joined the scheme.
