BVN as a veritable tool for financial inclusion

The Bank Verification Number (BVN) initiative, a centralised biometric identification system for the banking industry introduced by the Central Bank of Nigeria (CBN) in February 2014, no doubt has the potential to strengthen the Nigerian banking system as well as engender financial inclusion.

Introduced in furtherance of the CBN’s efforts to develop a safe, reliable and efficient payments system in the country, the objectives of the BVN include to protect bank customers, reduce fraud, as well as reduce identity theft and unauthorised access to customers’ accounts.

With the increasing incidence of compromise on conventional security systems, particularly in password and personal identification number (PIN), there is a high demand for greater security for access to sensitive or personal information in the banking system. Consequently, the project gives a unique identity that can be verified across the Nigerian banking industry as customers’ bank accounts are protected from unauthorised access since biometric information is not easily manipulated. Besides, it will address issues of identity theft since no two people have exactly the same biometric data, thus reducing exposure to fraud.

The essence of the project is also partly for banks to know their customers better, while tracking their credit records and other details which will aid the operation of banks in general. All banking operations will be verified using the same method, which reduces cases of human error or inconsistency. Banks will therefore be able to check the features of a person doing a transaction against the record which they have captured, thereby correctly identifying the owner of an account.

There is no doubt that serial and delinquent borrowers contributed to the banking crisis in the country in the recent past. With the BVN, however, activities of serial debtors will be reduced if not completely eliminated as every account that the customer has is linked in all Nigerian banks. This is because individuals performing banking transactions, such as applying for loans, would be required to identify themselves using their biometric features which will be matched against information in the central database. It therefore enables banks to be prompted at points of transaction to check if a customer has been blacklisted by any Nigerian bank.

It is our belief that the economy stands to gain tremendously from the successful conclusion of this exercise as it provides opportunity for the CBN to deepen its banking inclusion strategy while banks could leverage it to create risk assets and, consequently, avail the critical sectors of the economy of the much-needed credit.

It is good that the CBN has directed that all bank customers must enrol for the BVN by June 2015. We commend those who have already done so. For those who may be discouraged by the thought that BVN is another cumbersome, time-consuming process, we can authoritatively inform that the registration process involves only very few simple steps: walk into any branch of your bank; fill and submit the BVN enrolment form; present yourself for data capture (facial image, fingerprints); collect an acknowledgement slip, and your Bank Verification Number will be generated and an SMS sent to you to that effect within 24 hours.

We therefore urge Nigerian bank customers who have not embraced this project to do so. However, they should ensure that they do not respond to suspicious emails pretending to be from their bank and requiring them to provide sensitive information online. We also commend the efforts of banks in sensitising and mobilising customers on the BVN initiative and urge them to continue to ensure that all bank customers get onboard.