A CRITICAL ASSESSMENT OF THE ROLE OF BANK VERIFICATION NUMBER (BVN) IN REDUCING FRAUD IN NIGERIAN BANKS. (A CASE STUDY OF CENTRAL BANK OF NIGERIA, UYO BRANCH)
BACKGROUND OF STUDY
The rate at which fraudulent activities is going on in the country these days is becoming unbearable; the federal government of Nigeria and the CBN have been on their toes to resolve the issue of frauds and to boost financial security in most of the Nigerian banking industry; because all these issues the central bank of Nigeria on February 2014 made it compulsory that all account holders should have a bank verification number so as to enable the account holder to have a single identity in all the banks in Nigeria; all he or she needs to do is to link it with his or her accounts. The essence of this system is to help the bank in the protection of their customers from theft and other financial/ economic crimes growing in the banking industry (Orji, 2014)
The Bank Verification Number (BVN) is a great step taken by the Central Bank of Nigeria, to strengthen the financial security and order in the banking sector of Nigeria. One of the importance of the BVN is that transactions will be safer once all protocol is duly observed. The essence of this BVN exercise is to ensure that bank transactions are safer and fraudulent transactions are minimized, if not totally eliminated. The central bank of Nigeria has put in a lot of effort to see the success of this exercise, but the general public does not know the importance of the bank verification number, but they started seeing the importance of the bank verification number when the central bank made it clear that the exercise will stop by October 2015.
The bank verification number system uses biometric technology to register customers in the banking sector. It records these physical features which are unique to individuals' fingerprints and the face; this technique was made effective because every individual has his or her own unique fingerprints. The record would be used to identify the person afterward. Once a person’s biometrics have been recorded, and BVN issued the account would be accessed through BVN. The major objectives of the initiative are to protect bank customers, reduce fraud and strengthen the Nigerian banking system. Biometric enrolment is helpful to people who cannot read and write. Their fingerprints and pictures would serve the same purpose as signatures.
1.2 STATEMENT OF THE PROBLEM
Without doubts, the Nigerian banking sector has contributed to the growth and development of Nigeria. The Nigerian banking sector has maintained the inflow of money in the country so as to stabilize the country’s economy. According to Udenze, 2014; stated that growth in this sector has been reduced due to high cases of economic and financial crimes; fraud and money laundry have a significant effect on the financial security in the Nigerian banking industry. They have caused damage to the reputation of the image of the country, loss of FDI, poor infrastructural development, dwindling confidence, and distortions in our political as well as financial systems, among other things.
In view of these crises crimes perpetuated by cyber thieves, the mandatory bank verification number exercise embarked by various banks nationwide has also caused congestions in banking halls. Although the exercise commenced in February 2014, the fire brigade approach of most Nigerians has warranted most bank halls to be filled to their maximum capacity. Queues in some banks even extended outside the banking hall. This development has caused confusion in some banking halls as other transactions are placed on hold due to inadequate staff to attend to clients or delayed indefinitely
1.3 OBJECTIVES OF THE STUDY
The main object of the research work is to elicit information on the impact of BVN on financial security in Nigerian Banks. Specific objectives of the study are:
To monitor the effect of the bank verification number on the level of financial crimes in Nigeria
To give everyone access to a single account
To help limit multiple accounts by a single owner.
To investigate the role of the central bank of Nigeria in the implementation of the bank verification number system
To investigate the impact of the BVN system on the level of financial safety in Nigerian banks.
1.4 RESEARCH QUESTIONS
1. What are the effects of the BVN on the level of financial crimes in Nigeria?
2. What is the impact of the BVN system on the level of financial safety in Nigerian banks?
3. What are the roles of the central bank of Nigeria in the implementation of the BVN?
1.5 SIGNIFICANCE OF THE STUDY
The research work is a very important one as it will investigate the role of the central bank of Nigeria in the implementation of the BVN system, the study will discuss the importance of bank verification number, the bank verification number initiatives will help limit everyone to a single account so as to monitor the level of financial crimes in Nigeria. The study will also discuss the role of the central bank of Nigeria in the implementation of the bank. verification number system. Finally, the study will discuss the role of bank verification number on the level of security.
1.6 SCOPE OF STUDY.
The research work is limited to the study of the impact of BVN on financial security in Nigerian banks.
1.7 LIMITATION OF STUDY.
The study is limited to the Central Bank of Nigeria, Uyo branch.
Udenze, B. (2014).
BVN: CBN targets 80% fraud reduction in
the banking sector. Obtainable at http//sunnewsonlinecom/new/bvn-cbn-targets-80-fraud-reduction-banking-sector.
Orji, V, O. (2015). Knowledge management systems: Issues,
challenges, and benefits. Communications of the Association for Information Systems, 1(7).