Why bank verification number when there is NUBAN?

A lot of question has been raised about the essence of Bank Verification Number (BVN) when there is already a Uniform Bank Account Number (NUBAN). Does this imply that NUBAN is no longer effective? Before an answer is given to the above question, it is important to understand the two

concepts.

BVN is a biometrics identification of customers in the financial industry launched by the Central Bank of Nigeria (CBN) in February 2014, which is aimed at revolutionising the payment system in the country. The introduction of BVN authentication is targeted at addressing cyber crime, ATM fraud and other kinds of financial frauds as well as to safeguard customers’ funds to avoid losses through compromise of Personal Identification Numbers (PIN).

According to Isaac Okoroafor, acting director, corporate communications, CBN, BVN is a number that enables one person to have a single identity within the financial system. “We came up with this to achieve a few things; people who cannot read and write to use their biometrics which cannot be replicated, to tackle incidence of identity theft and enable banks to really identify their customers in the overall context of Know Your Customer (KYC) initiative,” Okoroafor says.

The NUBAN is a 10-digit bank account numbering system that is simpler to use than traditional longer account numbering structures, and is in line with requirements of the West Africa Monetary Institute, towards the economic integration of ECOWAS countries.

Every bank is required to create and maintain a NUBAN code for every customer account (current, savings, etc.) in its customer records database, and the NUBAN code would be the only account number to be used at all interfaces with a bank customer.

The CBN released the guidelines on NUBAN scheme in August 2010, to achieve uniform customer bank account numbering structure among all Deposit Money Banks in Nigeria, within nine months of that period. NUBAN has great potentials to resolve the observed problems with electronic payments in Nigeria, as many of them are related to specification of wrong beneficiary account numbers.

However, a number of operational modalities were released to the market by the CBN, to facilitate smooth and successful implementation of the scheme. As of today, the NUBAN project has been completely carried out by banks as every account holder has a NUBAN number.

Responding to the above question, Oluseyi Adenmosun, biometric project, Nigeria Inter-Bank Settlement System (NIBSS) plc, explaines that BVN identifies you across the banking industry, while NUBAN identifies you in your bank, saying “NUBAN is NUBAN, and BVN is BVN. Banks verification number identifies you across the industry. NUBAN identifies you in your bank. We

are not changing anything. NUBAN stays, BVN stays, they do separate things even though they look similar.”

To him, every bank has a server that warehouses all the database of all their account holders that have a BVN and even the banking network has branches, each bank branch will connect to that server, do the enrolment and that server pushes the data to the NIBSS.

“At NIBSS, we search through our own system, find out if there is a march, if there is no march, we will issue a BVN which we will go back to pick up. If there is a march, we will alert the bank to be aware that there is something suspicious and so the banks can take much more informed decisions,” says Adenmosun.

Explaining the reason for BVN, Okoroafor says: “The incidence of fraud in the banking system, identity theft, even the challenges that has to do with the inadequacies in our country and trying to situate this in the context of financial inclusion, and we realise that because so many people are not educated – they cannot read and write, they are unable to key effectively into the cashless policy and electronic banking policy.

“So, the bankers committee came up with a one bullet solution that will take care of these – that will check fraud, prevent identity theft, and make ordinary people who cannot read and write to also make financial transactions, and we came to realisation that we can do a few things to help solve some of these financial challenges in our financial system, the bank came up with this BVN.”

HOPE MOSES-ASHIKE