In an effort to reduce incidents of fraud and protect customer accounts from unauthorised access, banks under the aegis of the Bankers’ Committee, have intensified enrolment of their customers on the Bank Verification Number (BVN).
BVN involves the registration of customers in the financial system using biometric technology, making accounts more secure using unique identifiers such as fingerprint.
The BVN is an initiative aimed at protecting bank customers and further strengthening the Nigerian banking system. It is an initiative of the Central Bank of Nigeria (CBN), in conjunction with the Bankers’ Committee, meant to address the safety of customers’ funds, avoids losses through compromise of personal identification numbers and other criminal activities in the industry. BVN should also encourage financial inclusion as those who have typically stayed away from mainstream banking due to low literacy levels will be able to open and access their bank accounts using their biometric information rather than traditional identification methods.
The BVN has been described as a ‘silver-bullet solution’ to many of the challenges in the banking industry. The BVN is a unique identifier for each bank customer across the financial industry, making it possible to build and track customer financial history and activity. This will allow banks access to more reliable information that could inform decisions on customer loan and credit applications and other complex transactions.
In addition, banks are also now able to reduce identity fraud within the financial industry and increase accountability levels.
As part of efforts to encourage enrolment on the BVN, the CBN recently directed banks to only honour transactions over N100 million from customers with BVN from March 2015. Such transactions, according to the apex bank, include but not limited to, money transfers, loans, and contingencies, among others.
The CBN, which also urged all bank customers to register for their BVN by June 2015, has warned that any bank customer without a BVN would be deemed to have inadequate know-your-customers (KYC) by that date.