The BVN, which allows every bank customer obtain a unique identity using biometrics (the capturing of fingerprints and bio-data) stored with NIBSS and accessible to all banks in the country, is aimed at mitigating the level of fraud in the banking industry by tackling the challenge of identity theft, and helping banks achieve a higher level of Know Your Customer (KYC).
The project is a follow up on recent advancements in the country’s payment system and technology targets to stem fraud with identity theft as a major tool of fraudsters. Banks have continued to maintain that identification has been a major factor militating against lending to some customer categories.
However, for these obvious reasons, last November, the Central Bank of Nigeria signed a contract of more than N8 billion with Dermalog Identification Systems for the deployment and implementation of a biometric system, which would help in resolving issues bordering on authentication as well as check money laundering activities in the financial system. The scheme was launched on February 14, 2014.
For the CBN, the exercise was a continuation of the $50 million biometric project it instituted with the Bankers’ Committee, Dermalog and Charms Plc and is expected to assign unique number to every bank customer for enhanced security of transactions.
It is also expected to promote the financial inclusion programme as banks customers who are not learned and have no valid means of identity would be able to open bank accounts with their biometrics and be confident that their funds are safe from fraudsters.
Meanwhile, the Managing Director of NIBSS, Mr. Ade Shonubi, stated that in order to ensure an efficient implementation, a phased rollout approach was being adopted, beginning with Lagos.
He said biometric data capture machines have been deployed to about 1000 bank branches in Lagos, adding that to date over 16,000 BVNs have been issued. At full roll out, about 10,000 enrolment sets will be deployed across 5,000 bank branches nationwide.
However, regulators of the project told Daily Sun that until May ending, banks could not commence issuance of BVNs to their customers and chose to issue to their staff mainly at their headquarters.
But investigations by Daily Sun revealed that even the staff of some banks in Lagos do not even understand the nitty gritty of Bank Verification Number or its purpose in the banking sector, which is the most important aspect of the exercise, while the banking public represented by customers are not aware and some are not fully in tune with the ongoing exercise.
Checks at some bank branches, including Union Bank, Zenith Bank, Diamond Bank, GTB, Skye Bank, Stanbic IBTC Bank, Keystone Bank and UBA showed mixed reactions.
At Diamond Bank, Broad Street, Lagos Island, an officer, after explaining to him in details what BVN is, disclosed that although the exercise had only kick-started at Adeola Hopewell and Norway branches, the bank was yet to secure the machine for other branches in the state.
At Skye Bank, Satellite branch, the staff said the machines were in place but are yet to commence biometric data capturing. But a banking officer at Stanbic IBTC Bank, Festac branch, said he was not aware of what BVN was set to achieve as he was mistaking it for Know Your Customer (KYC) for new account holders.
Other bank operatives at GTB, Unity Bank, Zenith Bank, Keystone Bank and Union Bank told Daily Sun they were not aware of the exercise and did not have the machines while those having the machines in store said they are yet to learn how to operate them.
Meanwhile, customers spoken to on the exercise and who expressed excitement over the project said they were yet to experience its implementation in branches where their accounts domiciled. However, those who have fore knowledge of it said they were yet to be enrolled by their banks.
But according to the promoters of the initiative, Nigerians may be wary of another biometrics registration, there is a genuine reason for bank customers to ensure that they get on board the BVN train. This is because the target of the BVN is not only towards increasing security of customers’ identity and funds but also to enhance banks’ confidence in their customers such that lending to the ordinary man on the street would increase.
On the enrolment process, Shonubi explained: “The enrolment process is simple and easy.” He explained that 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).
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 further explained that to ensure an efficient implementation, a phased rollout approach is being adopted beginning with Lagos.
Shonubi said a customer can only enroll once, while his BVN will be linked to all his bank accounts across Nigerian 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 the customer’s bank account is protected from unauthorised access, thus reducing his 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,” NIBSS said in a statement.
Meanwhile, the CBN said the biometric solution is aimed at providing a central database for the country’s bank customers.
The innovation means Automated Teller Machines (ATMs) and Point of Sale (PoS) machines will be biometric-based. This means the project will help fix identity challenges facing the banking system. The project, the CBN said, will be driven by satellite technology being worked on by the Nigerian Communications Satellite (NICOMSAT) and MainOne.
CBN Governor, Godwin Emefiele, who before his appointment was also Chairman, Bankers’ Committee Sub-Committee on Biometrics, believes the project is ambitious and will revolutionalise banking.
Emefiele said the project would lead to re-setting of credit standard in the banking sector as well as enhance consumer credit.
“It is a rare opportunity that needed to be embraced. This project has capacity to serve over 160 million people. The good thing is that even when one forgets his/her Personal Identification Number (PIN), once the information is verified, transactions can be done,” he said at the launch of the project in February.
Former CBN Governor, Sanusi Lamido Sanusi, who launched the project in Lagos, said it would be a game changer for financial inclusion, adding that it will address issues relating to unified identity for bank customers.
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BVN: Poor awareness, logistics blight implementation exercise |
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