The rising fraud cases in the financial sector and the need to protect customers’ transactions got the Bankers’ Committee thinking of a way out. So, it was not surprising that the Committee collaborated with the CBN, deposit money banks, Nigeria Interbank-Settlement System (NIBSS) to inaugurate a centralised biometric identification system tagged Bank Verification Number (BVN).
The enrolment deadline which ended yesterday means that over 16 million customers may be shut out of the banking system unless the deadline is extended.
NIBSS, which guides the operational modalities of the project, says it will act if the CBN decides to extend the deadline for customers to register.
But before yesterday’s deadline, stakeholders, including banks, urged their customers to come and register. The Consumer Right Awareness Advancement and Advocacy (CRAAAI) urged Nigerians to go and register for their BVN. Registration deadline was yesterday.
The Chairman of the CRAAAI, Mr. Moses Igbrude, who spoke at a stakeholders’ forum on identity management in the economy, organised to enlighten Nigeria, 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 banking 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.
Many of the bank customers who spoke with The Nation said they wanted to deadline extend by at least six months. Moses Abiola, a customer of one of the new generation bank said all 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 many other customers had similar experience,” he said.
Maurice Okafor, a business woman base in Lagos also said there were no nearby registration centre for her to register. She said bank should increase the number of registration centre to capture more customers. “I think the places where people can register are very few. Maybe, if there more registration centre, more people will register,” she 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 details? He asked. He said the bank should make things easier for their customers by asking only relevant documents that have not been supplied earlier.
The CBN Governor, Godwin Emefiele explained that the biometric technology involves the process of recording a person’s unique physical traits such as fingerprints and facial features. This record, he said, can then be used to correctly identify the person afterwards.
He said the BVN became exigent followingthe increasing incidents of compromise on conventional security systems like 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 has been properly captured, the person is given a BVN which protects bank customers, reduce fraud and further strengthen the banking system.
He explained that fraud is reduced because no two people 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 enroll, 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 enrollment 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 authorized 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 standardized 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 ending last year, did banks commence issuing BVNs to their customers mainly at their headquarters. Managing Director of NIBSS, Mr. Ade Shonubi said that to ensure an efficient implementation, a phased rollout 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 equally by all licensed banks in Nigeria, and the CBN. Discount Houses operating in Nigeria also hold substantial shares.
Shonubi explained that the BVN enables each individual to have a single identification within the financial system and gives each customer maximum protection and security of transactions. “In many advanced countries, biometric technologies have been used to analyze human characteristics as an enhanced form of authentication for real-time security processes. Biometrics refers to identifying an individual based on physiological or behavioral attributes – fingerprint, signature among others. The customers unique BVN is accepted as a means of identification across all banks,” he said.
Benefits to customers
Biometric Project Manager at NIBSS, Oluseyi Adenmosun said that 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 biometric information as a means of first identifying and verifying all individuals that have account (s) in any Nigerian bank and consequently, as a means of authenticating customer’s identity at point of transactions.
Adenmosun said the BVN would also provide a uniform industrially-accepted unique identity for customers and authenticate transactions without the use of cards, using only biometric features and PIN.
Enrolment process
Collaborating Bankers’ Committee position, Adenmosun said “the enrolment process is simple and easy”. He explained those banks customers are expected to walk into any branch of you’re their bank, fill and submit the BVN Enrolment form and also do data capturing (such as fingerprint, facial image among others.
He said an acknowledgment slip with the transaction identity is issued to the customer. Within 24 hours, the system confirms the application, the BVN is generated, and SMS is sent to the customer for pickup.
He said a customer can only enroll once, while his BVN will be linked to all his bank accounts across Nigeria banks. “The BVN solution is to ensure accountability, protect bank customers’ account from unauthorised access, reduce exposure to fraud, check identity theft, enhance credit advancement to Bank customers, and also encourage financial inclusion,” he said.
He said the initiative addresses issues of identity theft and ensures that your bank accounts is protected from unauthorised access, thus reducing your exposure to fraud. It will also promote a safe and sound financial system in the country, especially as it will keep records of suspected fraudulent individuals in the banking system.
“It will make life and banking operations easy for bank customers as BVN is accepted as a means of identification across all banks in Nigeria. This will improve speed of service and reduce queues in banking halls.
At the point of enrolment individuals shall be required to submit an acceptable means of identification, and update their information at the bank branch physically. Customers of banks will be required to enroll within a fixed period after which they shall no longer be able to operate their bank accounts,” he said.
