Nigerian banks plan to collect customer biometrics harmed by poor logistics
Just a couple months before commercial banks in Lagos, Nigeria were intending on launching the early stages of Bank Verification Number – a joint initiative led by the Central Bank of Nigeria (CBN) and the Nigeria Inter Bank Settlement System (NIBSS) designed to collect customers’ biometrics to curb fraud — it became apparent that poor logistics and inadequate reinforcement of shareholders may have already harmed the implementation, according to The Sun News Online.
The BVN would essentially provide all banking customers with a unique identity profile based on their biometrics, which would be stored with NIBSS and accessible to all banks across Nigeria.
The project is intended to prevent fraud in the country’s banking industry by decreasing the frequency of identity theft cases.
The Central Bank of Nigeria awarded Dermalog Identification Systems last November a contract valued at more than N8 billion (approximately $50 million USD) to deploy and implement a biometric system, which officially kicked off on February 14, 2014.
The contract was a part of the CBN’s biometric project it organized with the Bankers’ Committee, Dermalog and Charms Plc, which would effectively assign a unique number to every bank customer.
It is also expected to promote the financial inclusion programme as banking customers who have no valid means of identity would be able to open bank accounts with their biometrics and be confident that their funds are secure.
According to NIBSS managing director Ade Shonubi, biometric data capture machines have already been installed at about 1,000 bank branches in Lagos, bringing the total number of BVNs issued to 16,000.
When the project is fully rolled out there will be roughly 10,000 enrolment sets deployed across 5,000 Nigerian bank branches.
However, the Daily Sun reports that the project’s regulators said that banks were not able to begin issuing BVNs to their customers until the end of May and have mostly only issued BVNs to staff at their head office.
It was also reported that the staff at some banks in Lagos lack a firm understanding of BVN and its intended purpose, while most banking customers are relatively unaware of the project.
And while many Nigerians may be reluctant to the idea of biometrics registration in many cases, the project’s promoters said that they are confident that banking customers would take to BVN because it will help boost the security of customers’ identity and funds. Additionally, as banks’ confidence in their customers improves, the frequency of loans would also theoretically increase.
“The enrolment process is simple and easy,” said Shonubi, adding that once the project is fully rolled out, banking customers will be able to visit any branch location, fill and submit the BVN enrolment form, and complete their biometric data capturing process.
The acknowledgment slip including the transaction identity is given to the customer. The system then confirms the application and generates a BVN, then immediately sends the customer an SMS notification for pickup within 24 hours, said Shonubi.
The CBN said the biometric solution will serve as a centralized database for banking customers in Nigeria.