Who lunched BVN
The BVN project launched on February 14,
2014 by the immediate past CBN governor, Mallam Sanusi Lamido Sanusi,
was driven at the time by the Bankers’ sub-committee on the Biometric
project, with the then Managing Director/Chief Executive Officer, Zenith
Bank Plc, who is now the CBN governor Mr. Godwin Emefiele as its
chairman at the time of its introduction.
The objective of the BVN initiative is
to protect bank customers, reduce fraud and further strengthen the
Nigerian banking system.
What the BVN is all about
It is the registration of customers in
the financial system using biometric technology. Biometric technology
involves the process of recording a person’s unique physical traits such
as fingerprints and facial features. This record can then be used to
correctly identify the person afterwards. Once a person’s biometrics has
been properly captured, the person is given a BVN.
Why BVN
Fraud is reduced because no two people
have the same biometric information. With the BVN, banks will 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. The BVN given to a person by one bank will apply to that
same person for any bank in Nigeria.
According to the CBN, the introduction
of BVN is targeted at addressing cybercrime, ATM fraud and other kinds
of financial frauds, as well as safeguarding customers’ funds to avoid
losses through personal identification numbers (PIN).
Aside this, the apex bank stated, “The
BVN will also strengthen the current Know Your Customer guidelines and
allow banks have more confidence in giving out loans. With the BVN, the
financial history of a customer is stored at a central location and can
be accessed by other banks who seek information about that customer.”
Also with the BVN, credit history of
customers who want to secure loans is made available to banks. Customers
with suspicious accounts or transactions will also be tracked with the
BVN, making it difficult for fraudsters to maintain bank accounts.
To enable their customers meet up with
the deadline, some banks have since late last year been offering their
customers the option of enrolling on Saturday, and in addition to making
the enrolment easier for the customers, the CBN, in its latest circular
on the BVN, directed that for existing customers, capturing signatures
and photo identification documents may not be necessary as the bank is
expected to have those records during account opening.
Since its launch, the CBN and banks have
been intensifying efforts to register their customers. They have also
intensified efforts in sensitising all their customers on the processes
of registration. Most of the banks have indulged in multiple
communication channels in wooing their customers to key in. The channels
include short text messages, messages displaced on their websites,
e-banking platforms, ATMs and flyers placed in strategic places in
banks.
The CBN and banks have also been
educating customers on activities of fraudsters. Fraudsters have been
sending bank customers emails, requesting them to supply personal
details so they could be registered on BVN online.
“We are saying that with this project,
people will be able to buy cars easily, do mortgage easily with the kind
of data that would be fed into the centralised system and access bank
credit easily. By extension, we would see how it would affect
productivity in the economy. Given the opportunity that we have right
now, where the customers’ biometric is given, it makes it comfortable
for us to lend money to farmers who need money to buy fertiliser, and to
cobblers, barbers, or any form of business,” he explained further.
Mr. Gunther Mull, Managing Director of
Dermalog Identification Systems, the German company that was engaged to
deploy and implement the BVN system, said the platform would make life
easier for banks and their customers.
Already the CBN is introducing measures to make Nigerians comply with the BVN, especially high net worth individuals.
The CBN has warned that any bank
customer without the number would be deemed to have inadequate
know-your-customers (KYC) and this may affect his or her transactions
with the bank. The regulator recently announced that from next month,
banks would stop honouring transactions from N100 million and above,
from customers that don’t have the BVN.
Such transactions, according to the central bank, include but are not limited to, money transfers, loans and contingencies.
As a
matter of fact, this will help check credit worthiness of borrowers as
the BVN initiative will provide a centralised customer biometric
information system in the banking sector which will make it difficult
for people who take multiple loans with no intension of repayment to
operate. There is no doubt that the activities of such people are
inimical to progress in the banking sector.
Case for BVN
According to Shonubi, “BVN removes these
losses. The beauty of it all is the unique identification in the
financial space. Generally, people say every Nigerian is a crook but in
actual sense, maybe only one per cent of Nigerians are crooks but the
remaining 99 per cent are considered crooks because of that one per
cent.
“So, BVN allows us, again, to find these
individuals and to create that blacklists that other stakeholders in
the financial space can have access to. With this, even foreigners
through their Banks, may be able to identify fraudsters that have been
tracked in the Nigerian Financial space. Secondly, the BVN would allow
us begin to build retail credit.
“Today, the Banks have concerns over
identification in retail lending that is why the entire retail consumer
lending portfolio is targeted at people with formal employment whose
employers can serve as a point of reference. There are however a lot of
self-employed people as well as others working in smaller organisations
who require this, but do not have access due to the identification
issue, as no bank will take the risk of lending to them – considering
cases of resignation and eventual run off, how will the Banks get
repayment? But with the availability of BVN, these set of individuals
will also benefit from Retail Lending as identification and tracking
issues will be mitigated. The third, which I have already alluded to, is
we want to be able to authorise financial transactions down the road,
on an Automated Teller Machine (ATM) or a Point of Sales (PoS). You can
use your biometric identifier to say ‘Yes, this is me and I am
authorising the payment.’ So, those are the three key focus areas that
led to the BVN project being conceived and implemented.”
In the view economic analysts, as CBN
implements the BVN initiative, it has to ensure the security of the
data, from rogue bankers and also importantly from damage, as has been
the experience with other sectors that engaged in biometric enrolments.
Besides, they said the apex bank should
also create measures to punish banks that might exploit the information
they have to blackmail customers with whom they have disagreements.
While majority agree the BVN is a great
initiative that would reduce illegal banking transactions and improve
national financial intelligence gathering, they however suggest that the
interests of account holders should be accorded importance so that
their increased confidence in the banking system would improve the
financial standing of banks.
According to Bamide Alo, “Customers will
use banks more when they know that their transactions are safe. BVN
offers vast opportunities to protect customers, banks and the entire
financial system.”
The CBN, he emphasised, “should enhance
the security of BVN to protect the entire financial system. It should be
on the watch for technologies to keep improving BVN capacities.”
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