To protect customers and enhance confidence in the banking sector, the Central Bank of Nigeria (CBN), introduced the Bank Verification Number (BVN). The exercise, which involves capturing customers’ physiological attributes, such as, fingerprint, signature, among others, needs the collaboration of the National Identity Management Commission (NIMC) to succeed, writes COLLINS NWEZE.
Security is key in banking. This prompted the Central Bank of Nigeria (CBN) to introduce the centralised biometric identification system known as Bank Verification Number (BVN).
But the success of the project, launched in February, will largely depend on how stakeholders, especially, the National Identity Management Commission (NIMC) collaborate with the CBN.
CBN’s Deputy Director, Banking Supervision, Kelvin Ibedu, said the BVN project will be enhanced if there is harmonious implementation strategy with the NIMC.
He spoke at the second National Credit Reporting conference in Lagos, lamenting that CBN is working at cross-purposes with NIMC will not solve the identity crisis facing the country.
He said striking a convergence in what the CBN is doing with BVN and what NIMC is doing is key in achieving a sustainable identity management system for the country.
He said: “The CBN cannot wait for NIMC to do the work alone, even as the apex bank alone cannot achieve the desired result. The challenge is how do we marry the two processes? At what point do we reconcile both parties? We need to align with the Identity Management as convergence remains key in achieving the desired result.”
Ibedu said the BVN would help deepen the credit system because the benefit of having a unique identifier among all bank customers that registered cannot be over-emphasised.
He said the CBN’s mandate directing DMBs to enroll 40 per cent of their customers on the BVN platform by December 31, and 70 per cent by March 30, next year still stands.
He said the apex bank will monitor lenders to ensure compliance adding that the regulator will not be quick to fix deadline for the entire exercise.
Banks step up campaign
Findings have shown that banks have raised their communication and enlightenment programmes about the programme, advising their customers to comply.
An emailed note by Diamond Bank to its customers read: “We are pleased to inform you that you can now register for your Bank Verification Number (BVN) at Diamond Bank as directed by the Central Bank of Nigeria (CBN). This involves the issuance of a series of numbers (BVN) that uniquely identifies each customer in the Nigerian banking industry.
“The purpose of this exercise is to further improve financial service delivery by protecting you against identity theft, minimising your exposure to fraudulent transactions and increasing your accessibility to credit facilities and other financial services.”
The lender listed branches where customers could be enrolled. Similar message also came from GTBank to its customers, explaining that BVN is an initiative of the CBN to give customers a unique number that could be verified across the banking industry.
NIBSS’ position
Managing Director, Nigeria Interbank Settlement System (NIBSS), Mr. Ade Shonubi, said to ensure an efficient implementation of the sceheme, a phased rollout approach was being adopted beginning in Lagos.
He explained that biometric data capture machines had been deployed in about 1000 bank branches in Lagos while till date, over 16,000 BVNs had been issued. He added that 10,000 enrolment sets would be deployed across 5,000 bank branches nation-wide at full roll out.
He said bank customers in Lagos were already enrolling to get their BVN. He said servers in banks’ headquarter have been configured, deployed and tested, with their workers trained to carry out the enrolment and verification of customers.
Shonubi said BVN enables each individual to have an identification within the financial system and gives each customer maximum protection and security of transactions. There is no enrolment deadline for the public yet.
He said: “In many advanced countries, biometric technologies have been used to analyse 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.
“The BVN became exigent following the 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.”
Enrolment
Shonubi said the enrolment process is simple and easy. According to him, bank customers are expected to walk into any branch of their bank, fill and submit the BVN Enrolment Form and also do data capturing (such as fingerprint, facial image and 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.
He said a customer could only enroll once, while his BVN will be linked to all his bank accounts across the country. “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 would address issues such as identity theft and ensure that bank accounts are protected from unauthorised access, thus reducing 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.
NIBSS said: “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 would 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.”
Benefits to customers
Biometric Project Manager at NIBSS, Oluseyi Adenmosun, said the sceheme gives a unique identity that could be verified across the banking industry making it easier for customers’ bank accounts to be protected from unauthorised access.
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 requirements
A statement from NIBSS explained that a unique ID number shall be issued to every bank customer at enrolment and linked to every account that the customer has in all Nigerian banks. Individuals are required to submit an acceptable means of identification for enrolment.
Also, customers are required to enroll within a fixed period after which they shall no longer be able to operate their bank accounts.
“The customer’s all 10 fingers and facial image are captured making it possible for individuals performing banking transactions like applying for loans to identify themselves using their biometric features which will be matched against information in the central database at NIBSS,” it said.
Also, update of customer information is done at their bank branches physically while lenders are prompted during account opening and credit check if a customer has been blacklisted by any lender. The BVN and unique features of an individual shall be used in conjunction with a PIN on a point of transaction.
Adenmosun said though there was no perfect system, the essence of technology and safety measures was to frustrate fraudsters. He said the scheme would make it extremely difficult for the fraud perpetrators to succeed.
“It will not eliminate fraud, but it will cut it to the barest minimum. The biometrics cannot be easily stolen because it is based on once. Once the system captures it, (it is stored and cannot be compromised) because it is based on fingerprints,” he said.
Adenmosun said though the chip and pin technology was deployed in Automated Teller Machines (ATMs) and Point of Sale (PoS), they could be compromised, but the BVN makes that extremely difficult. He explained that for corporate accounts, the account signatories BVNs would be captured.
“In corporate accounts, it is only the signatory to the accounts that are captured, not directors of the company. The directors are not functional users of the accounts, and will not be captured.
“The whole idea of fraud mitigation is to provide special anti-fraud system for banks. It is going to handshake with the BVN project, so that every suspicious account is flagged off. So, we expect that every functional account will have a BVN, and if an account that is used for fraud does not have a corresponding BVN, then the concerned bank will face the full wrath of the law. That means the bank is allowing an account without BVN to run. That’s how we can track owners of fraudulent accounts.
“If you don’t have a BVN and the anti-fraud system throws up your account as a suspect, then that bank is also aiding and abetting you. Because the truth of it is that we can only mitigate, we can’t stop fraud people will try. And when they try, the account they are trying with, has already been enrolled in the BVN, we will know. And those kinds of accounts would have been stored in what we call a watch list,” he added.
He said that for every enrollment, the system will have a watch list where suspected reported accounts, relative to BVN, will be stored. “For every enrolment, the system will check the watch list and enquire if such BVN on a watch list. If it is, it will alert the account officer,” he said.
He said the technology makes it easier for banks to know which account holder is on the watch list and take extra precautions in handling transactions emanating from such accounts.
NIBSS provides the infrastructure for automated processing, settlement of payments and fund transfer instructions between banks, discount houses and card companies across the country. The firm is owned by licensed banks in Nigeria, and the CBN. Discount houses operating in Nigeria also hold substantial shares.
