Category: Money

If the Central Bank of Nigeria (CBN) sticks to its October 31 deadline, over 32 million customers who have yet to obtain their Bank Verification Number (BVN) may have their accounts frozen. COLLINS NWEZE writes.

WHEN the Central Bank of Nigeria (CBN) and Bankers’ Committee came up with the Bank Verification Number (BVN) for two reasons: to tackle rising fraud cases and to protect transactions. After all, banking thrives on trust and security of customers’ funds.

But with 17 days to go, only 20 million customers have obtained their BVN, leaving over 32 million others at the risk of being excluded from the system if the CBN sticks to the October 31 deadline. Initially, the deadline was June 30.

According to CBN Director, Banking Supervision Mrs. Tokunbo Martins, customers who fail to meet the deadline would lose their accounts, adding that there is no going back on the deadline.

“There will be no extension of the October 31 deadline. All efforts have been made by the Bankers’ Committee, the CBN and Nigeria Interbank Settlement System for customers to obtain their BVN. The customers, who fail to meet the deadline will not be able to operate their accounts until they comply,” she said.

The bank chief, who spoke on behalf of the committee members, said Nigerians in Diaspora could enrol at various embassies in their countries of abode or get enrolled by the consultant involved in the contract at a fee. He said non-compliant customers still had up till month end to get their BVN or face the consequences.

She said the BVN registration was a directive from the CBN to Deposit Money Banks to register their customers’ fingerprints biometrically in furtherance of the Know Your Customer (KYC) policy.

The BVN was introduced in collaboration with the Bankers’ Committee on February 14, last year to ensure unique identity for all bank customers and other users of financial services in the country by the use of the customers’ biometrics as means of identification. Initially, it was estimated that all customers would, within a period of 18 months, complete enrolment in the new system of customer identification. The enrollment for the scheme can be done in banks across the country.

The Nigeria Interbank Settlement System (NIBSS), which guides the modalities of the project, is working on ensuring the success of the exercise by collaborating with telecoms firms to create a platform through which bank customers can confirm their registration status.

Already, NIBSS has collaborated with one of the country’s telecoms service providers, Etisalat to roll out the BVN Query Service.

Speaking on the service, the Managing Director of NIBSS, Ade Shonubi, said the initiative was in response to growing public demand for confirmation of BVN status by those, who have enrolled on the platform. He added that the BVN Query Service will boost such efforts like KYC for banks.

Chief Marketing Officer, Etisalat Nigeria, Francesco Angelone, said the partnership with NIBSS on USSD BVN Notification Service was in line with the telco’s commitment to continue to create value for the consumers across all sectors, including the banking and telecoms industries.

“We are happy to be the first to offer this product among the operators because we believe that innovation is the way the telecoms industry must lead,” Angelone said.

He said Estisalat believes that going in this direction of offering value to the banking public is another way it can show the telecoms industry the way to go. “The integration with the banking industry is a pillar for development. Etisalat subscribers can check their BVN registration status and number by dialing a dedicated code for an instant response at a cost of N10 per Query,” he said. The Query Service is based on instant request – instant response and aims at providing utility for those who have enrolled on the BVN platform of the CBN.

While the deadline looms, stakeholders, including banks, urged their customers to  register. The Consumer Right Awareness Advancement and Advocacy (CRAAAI) also urged Nigerians to register for their BVN.

CRAAAI Chairman, Mr. Moses Igbrude, who spoke at a stakeholders’ forum on identity management in the economy, said identity management is a broad administrative area that deals with identifying individuals in a particular system.

He listed the system to include a country, a network, or an enterprise and controlling their access to resources within that system by associating, user rights and restrictions with the established identity.

He added that the role of technology in modernising the sector has witnessed a paradigm shift from the traditional methods of banking to digital channels which involve enormous levels of electronic data capture (EDC) of customer’s information. “Everybody needs security; if people are identified before they commit any crime, the person will be identified easily,’’ he said.

Sterling Bank Plc has deployed an innovative solution to enable customers who had previously enrolled for their BVN with other banks to upload same on its platform via their mobile phones.

With this development, customers are now able to comply with the regulatory requirement on BVN and save themselves the stress of having to come to the banking hall.

In a statement on how the development affects customers, the bank said its plan is to make the exercise seamless, easy and consistent with the move towards self-service that has become the order of the day. “Ultimately, it also enables the bank comply with the CBN’s position within reasonable time,” it said.

The lender said it would continue to improve customers’ experience at every touch point , which is in line with its brand promise. It disclosed that all BVN cards produced by NIBSS for its customers have all been distributed to all the customers who have registered.

Many of the bank customers, who spoke with The Nation, said they wanted the deadline extended by at least six months. Moses Abiola, said bank customers should be allowed to register. He said customers should not be punished because there are many challenges that made it difficult for them to register. “I visited my bank several times to register but they complained of poor network. I know that other customers had similar experience,” he said.

Michael Obi, a business woman based in Lagos, also said there were no nearby registration centres for her to register. She said bank should increase the number of registration centre to capture more customers. “I think the place where people can register are very few. Maybe, if  there more registration centre, more people will register,” he said.

Another customer, James Chukwu, said he filed to register because the process was too tedious. “What of all the data I provided in the course of registration. Why can’t the bank rely on those detail? he asked. He said the bank should make things easier for their customers by asking only relevant documents that have not been supplied earlier.

CBN Governor Godwin Emefiele said the biometric technology involves the recording of a person’s unique physical traits, such as fingerprints and facial features. This record, he said, could then be used to identify the person later.

He said the BVN became exigent, following the increasing incidents of compromise on conventional security systems, such as password and Personal Identification Number (PIN) of bank customers which has led to loss of funds. There is therefore, a high demand for greater security for access to sensitive or personal information in the banking system.

Also, once a person’s biometrics have been  captured, the person is given a BVN, which protects him.

He explained that fraud is reduced because no two persons have the same biometric information. “Banks will, therefore, be able to check the features of a person doing a transaction against the record which the bank has captured thereby correctly identifying the owner of an account,” he said.

A statement from the Bankers’ Committee insists that all bank customers in Nigeria are required to register or enroll for a BVN by June. However, to enrol, they must visit a branch of their bank, but the BVN given to a person by one lender will apply to that same person for any bank in the country.

The committee explained that since the BVN captures physical features, it is also very helpful for people who cannot read and write, thereby making sure that everyone is included in the financial system.

“It is expected to help the banking system identify customers who have been blacklisted by one bank and who move to other banks. There is also need to inspire confidence in the BVN registration process and use of information collected as well as helps public to distinguish between genuine BVN communication and requirements and the activities of fraudsters,” it said.

 

Why BVN?

Biometric security identification is a secure method of identification that eliminates issues with identity theft and fraud. Since it is unique to an individual, biometrics provides a strong link between the individual and the claimed identity.

“The process of enrolment is simple. Customers are to visit any branch of their bank; fill out and submit the BVN enrolment form; biometric information such as fingerprints and facial imagery  is recorded; acknowledgment slip with transaction Identity is issued; BVN is created and customer is alerted to arrange for pick-up,” it said.

The committee said the project protect customer bank accounts from authorised access, as biometric information is not easily manipulated. It strengthens the financial system by reducing the risk of unauthorised access to customer bank accounts. It also increases the efficiency of the banking industry as it reduces incidence of fraudulent/duplicate bank accounts, and easily highlights blacklisted customers.

“Besides, full integration of BVN provides standardised efficiency of banking operation. This means that all banking operations will be verified using the same method, reducing cases of human error or inconsistency. Implementation of BVN means transaction authentication without the use of cards, but instead using only biometrics and a Personal Identification Number (PIN),” it added.

 

Dermalog/Charms Plc

For the CBN, the exercise is a continuation of the $50 million biometrics project it instituted with the Bankers’ Committee, Dermalog and Charms Plc.

However, not until May, last year, did banks begin issuing BVNs to their customers mainly at their headquarters. Managing Director, NIBSS, Mr. Ade Shonubi, said to ensure an efficient implementation, a phased roll-out approach was adopted beginning in Lagos.

The NIBSS provides the infrastructure for automated processing, settlement of payments and fund transfer instructions between banks, discount houses and card companies in Nigeria. The firm is owned by all licensed banks, and the CBN. Discount Houses operating in Nigeria also hold substantial shares in the firm.

Biometric Project Manager, NIBSS, Oluseyi Adenmosun, said BVN gives a unique identity that can be verified across the banking industry making it easier for customers’ bank accounts to be protected from unauthorised access. It is expected to address issues of identity theft, and reduce exposure to fraud in the banking sector.

The manager added that the purpose of the project is to use the biometric information to authenticate customer’s identity during transactions.