BVN: For a safer, better banking

What is Bank Verification Number (BVN)? It is a scheme introduced by the Central Bank of Nigeria (CBN) to protect customers’ transactions and enhance confidence in banking. It involves capturing customers’ fingerprint and signature, among others, at their banks, reports COLLINS NWEZE.

In banking, security is paramount to pro tect depositors’funds. It is in the light of this that the Central Bank of Nigeria (CBN), through the Bankers’ Committee, Deposit Money Banks and Nigeria Interbank-Settlement System (NIBSS), introduced the centralised biometric identification system, tagged Bank Verification Number (BVN).

The BVN became imperative following the increasing incidence of compromise on conventional security systems such as password and Personal Identification Number (PIN) of customers.

The BVN involves identifying an individual based on physiological or behavioural attributes, such as fingerprint, signature and others. The customers unique BVN is accepted as a means of identification across all banks system.

For the CBN, the exercise is 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.

However, not until May ending, did banks start issuing BVNs to their customers mainly at their headquarters. Managing Director of NIBSS, Mr. Ade Shonubi said to ensure an efficient implementation, a phased rollout approach is being adopted, beginning from 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 nation-wide.

Customers in Lagos, he said, are already enrolling to get their BVN. The Lagos project is the first phase of the countrywide roll out. He said servers in banks’ headquarters have been configured, deployed and tested, with their staff trained to carry out the enrolment and verification of customers.

But when The Nation visited some of the bank branches of Diamond Bank, GTBank, Stanbic IBTC Bank, Ecobank and Zenith Bank, the customer services officers were not even aware of the BVN.

At Stanbic IBTC Bank, Ikeja, an officer seemed at a loss, when asked about the BVN. He said he was even mistaking the BVN for Know Your Customer (KYC) for new account holders.

At Diamond Bank, Ogba, an officer said she was aware of the BVN, but has not been advised on the registration and capturing of customers’ data. At GTBank Matori Branch, an officer said the bank is working on branch rollout within a short time.

However, the BVN has already been deployed in all head offices of banks in Lagos, where enrolment began on March 31. It is expected to end the use of drivers’ licence, international passport and other forms of identification for account opening.

Shonubi explained that the BVN enables each individual to have one identification within the financial system and gives each customer maximum protection and security of transactions. There is no enrolment deadline for the public yet.

“In many advanced countries, biometric technologies have been used to analyse human characteristics as an enhanced form of authentication for real-time security processes. Biometric refers to identifying an individual based on physiological or behavioral attributes – fingerprint, signature among others. The customers unique BVN is accepted as a means of identification across all banks,” he said.

Enrolment process

Shonubi said: “The enrolment process is simple and easy.” He explained those 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 etc).

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 in Lagos.

He said a customer can only enroll once, while his BVN will be linked to all his bank accounts across Nigeria 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 your bank accounts is protected from unauthorised access, thus reducing your 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.

 Benefits to customers

Biometric Project Manager at NIBSS, Oluseyi Adenmosun said BVN gives a unique identity that can be verified across the banking industry making it easier for customers’ bank accounts to be protected from unauthorised access. It is expected to address issues of identity theft, and reduce exposure to fraud in the banking sector.

The manager added that the purpose of the project is to use biometric information as a means of first identifying and verifying all individuals that have account (s) in any Nigerian bank and consequently, as a means of authenticating customer’s identity at point of transactions.

Adenmosun said the BVN would also provide a uniform industrially accepted unique identity for customers and authenticate transactions without the use of cards using only biometric features and PIN.

Enrolment requirements

A statement from NIBSS explained that a unique ID number shall be issued to every bank customer at enrolment and linked to every account that the customer has in all Nigerian banks. Individuals are required to submit an acceptable means of identification for enrolment.

Equally, customers of banks are required to enroll within a fixed period after which they shall no longer be able to operate their bank accounts.

“The customer’s all 10 fingers and facial image are captured making it possible for individuals performing banking transactions like applying for loans to identify themselves using their biometric features which will be matched against information in the central database at NIBSS,” it said.

Also, update of customer information is done at their bank branches physically while lenders are prompted during account opening and credit check if a customer has been blacklisted by any lender. The BVN and unique features of an individual shall be used in conjunction with a PIN on a point of transaction.

Adenmosun said though there was no perfect system, the essence of technology and safety measures was to frustrate fraudsters. He said the BVN would make it extremely difficult for the fraud perpetrators to succeed.

“It will not completely eliminate fraud, but it will cut it to the barest minimum. The biometrics cannot be easily stolen because it is based on once and once the system captures it, because it is based on fingerprints,” he said.

Adenmosun said though the chip and pin technology is deployed in Automated Teller Machines (ATMs) and Point of Sale (PoS), they can be compromised, but the BVN makes that extremely difficult. He explained that for corporate accounts, the account signatories’ BVNs will be captured.

“In corporate accounts, it is only the signatory to the accounts that are captured, not directors of the company. The directors are not functional users of the accounts, and will not be captured.

“The whole idea of CBN behind fraud mitigation is to provide special anti-fraud system for banks. It is going to handshake with the BVN project, so that every suspicious account is flagged off. So, we expect that every functional account will have a BVN, and if an account that is used for fraud, does not have a corresponding BVN, then the concerned bank will face the full ambit of the law. That means the bank is allowing an account without BVN to run. That’s how we can track owners of fraudulent accounts.

“If you don’t have a BVN and the anti-fraud system throws up your account as a suspect, then that bank is also aiding and abetting you. Because the truth of it is that we can only mitigate, we can’t stop fraud completely people will try. And when they try, the account they are trying with, has already been enrolled in the BVN, we will know. And those kinds of accounts would have been stored in what we call a watch list,” he added.

He said that for every enrollment, the system will have a watch list where suspected reported accounts, relative to BVN, will be stored. “For every enrollment, the system will check the watch list and enquire if such BVN on a watch list. If it is, it will alert the account officer,” he said.

He said the technology makes it easier for banks to know which account holder is on the watch list, and take extra precautions in handling transactions emanating from such accounts.

CBN’s position

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.

Managing Director, Dermalog Gunther Mull said the company is both financially and technically competent to carry out its job. He refuted claims that the company is bankrupt, adding that it has been profitable, growing at over 15 per cent in the last 12 years.

He praised the CBN for the courage and commitment it has brought to the project, adding that in other countries where the project had been implemented, it was mainly government-driven.