In the coming days, many account holders with Nigerian banks will be working themselves into a frenzy as they make the last-minute rush to beat the Central Bank of Nigeria deadline for their Bank Verification Number registration. The CBN insists that any account holder, whether resident in Nigeria or abroad, who fails to submit to the process by October 31 will be denied access to his or her account. Yet, recent reports quoting the CBN indicated that only 21 million of the 52 million active accounts in the various banks in Nigeria had been registered.
The BVN is the latest in a country that has suddenly been bitten by the biometric registration bug. It is a concept that requires banks to collect the biometric features of their customers and store the data with the CBN. The purpose is to create a centralised biometric identification system —simultaneously available to all the banks — which would help in reducing the level of fraudulent activities in the country’s banking sector.
Among the advantages inherent in the project initiated by the Bankers’ Committee of the CBN, in collaboration with all the banks operating in the country, is the fact that it gives the customer a unique identity identifiable within the banking system. This, it is believed, will protect bank customers against unauthorised access to their accounts, enhance the chances of fishing out blacklisted customers and provide a standardised efficiency of banking operations across the industry. The exercise, at the end of the day, is meant to present biometric information as the means of verifying and authenticating the identity of customers.
What the exercise has succeeded in achieving, however, is that it has added to the pile of data on personal information that Nigerians are required to make available in the public space. Prior to the advent of the BVN, Nigerians were once made to present these same features in a National Identity Card Project embarked upon by the Federal Government that failed to achieve its intended purpose and has now been revived. To obtain a driving licence, one is also made to undergo data capturing with the Federal Road Safety Commission. At places of work, especially in government agencies, workers are likewise expected to undergo a biometric capturing process to help in checking the high incidence of “ghost” workers in the system.
Recently, many Nigerians had their telephone lines cut off because they had either failed to comply with an earlier directive to have their data captured by the telecommunications companies in the country or those companies had messed up the earlier data they had collected. Even at the point of taking a new Nigerian passport, the same data capturing routine is observed. There is a biometric epidemic in practically every aspect of the country’s public life which, apart from the inconvenience it imposes, could actually make people vulnerable to fraud because of the sheer volume of their personal information details that are in the public space.
The question therefore is, in a country where there is a very high level of crime, can these organisations capturing people’s personal data be trusted to handle such sensitive information responsibly? What is the level of preparedness to protect innocent Nigerians whose personal features are available everywhere from identity thieves with criminal intent? How safe are they from any form of harm — physical, social and economic — that could arise from this means? If a person has had his or her biometric features captured by a particular government agency, why can’t the information go to a central data bank, which could be accessed by any other agency, such that the person would not have to go through the same process repeatedly?
The fears are particularly valid in the banking system, where the level of fraud is very high and most of it had been pulled off through insider collaboration. Although bank customers have been made to understand that the BVN is meant to make their accounts more secure, a report stating that Nigerian banks lost N199 billion to e-fraud between 2000 and 2014 is bound to unsettle even the calmest and most trusting customer. The report, quoting Easy Solutions Limited, a fraud protection firm, indicated that electronic fraudsters had invaded the Nigerian banking system, deploying fake applications to steal personal and financial information.
In fact, an upsurge in 2014 reportedly took the incidence of fraud in the banking sector to an alarming dimension. Figures from the Nigeria Inter-Bank Settlement System Plc show that 1,461 cases of electronic fraud were recorded last year alone. According to The Telegraph, a British newspaper, more than £650 million was lost in the last two years to activities of Russian-based hackers. With the centralisation of customers’ personal information details through the BVN, what is the level of liability of banks in a situation where people’s lifetime savings are cleaned out?
To allay people’s fears, Dipo Fatokun, the Director of Banking and Payment System, said measures were in place to protect people’s money. He said, “We are not unaware that the fraudsters have become well-organised and seem to always be ahead of the curve in compromising implemented controls. Hence, we are committed to continuously improving the payment landscape to respond effectively to new threats.” But beyond merely responding to threats, more has to be done to ensure that depositors are not cleaned out. In the event of such fraud occurring, however, the bank involved should be held liable.
Besides, on the issue of deadline, it is wrong for the CBN to state that after October 31, customers would no longer have access to their accounts. With the way things are going, it is obvious that all the customers cannot be registered before the expiration of the deadline. What is best in this situation is to ensure that those who failed to comply should be allowed to do so whenever they are ready to access their accounts. The same privilege that is extended to new customers should therefore be accorded old ones that missed the deadline.
