Biometric Verification Number: Reality and benefits

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  • Customers besiege banks as BVN registration deadlinesexpiresWhat is this Biometric Verification Number (BVN) allabout? What are the benefits to bank customers and theeconomy? These are the questions agitating the minds ofmany Nigerians, which were also expressed in some ofthe responses to the series on, BVN: facts behind theextension.The first reality about the BVN is that it is a response tothe problem of identity crisis in the banking industry. Formany reasons, banks are mandated to Know YourCustomers (KYC). They are expected to know where thecustomer lives, what he does etc. Among other things,the aim of this KYC requirement is to ensure thatfraudsters do not use the services of banks to perpetratecriminal activities like money laundering, Advance FeeFraud (419) etc.Because Nigeria does not have an established identitydata base, like the social security number in the UnitedStates, it became increasingly difficult for banks to reallyknow the true identity of their customers. More so, inNigeria, any document can be easily procured or fakedsuch that people can claim identities that are differentfrom who they are. As a result there has been instanceswhere the same person opens bank accounts in differentbanks with different names.Sometimes, the intention is not to commit fraud, while alot of times, the various accounts are opened and usedfor illegal or unethical purposes. For example, peoplewith such accounts have used them to breach foreignexchange regulations, as well as borrow from the variousbanks with such loans never to be repaid. The inability toeffectively ascertain the identity of bank customers hasbeen exploited to perpetrate various criminalities andmalpractice by organisations, bank customers, bankers,resulting in huge losses for the banks, their customersand the economy.The Biometric Verification Number (BVN) was conceivedto address this identification challenge. The idea is verysimple. Capture the finger prints and picture of everybank customer and save the information with a number,which can then be issued to the customer, and can beused to verify his/her identity.As the biometric (fingerprints and facial features) of eachcustomer is captured and a number, called BiometricVerification Number (BVN), is attached. These arestored in a BVN database created by the banking industryin the custody of the Nigeria Interbank SettlementSystem (NIBSS).So, if somebody walks into any bank, and says, I am Mr.XYZ, living in ABC town, all the bank needs to do toverify the information is to request for BVN of thatperson, enter it into the BVN database in order to call upthe identity (biometrics and other information)registered with the BVN. The other option, especially ifthe person says he or she does not have a BVN, is for thebank to capture the biometrics of the person, use it toconduct a search on the BVN database, to ascertain ifindeed the person is telling the truth.Thus, the first benefit and importance of the BVN is thatit helps banks to ascertain the identity of any customer.Consequently, the use of fictitious names and fakedocuments to open bank accounts for criminal purposeswill be greatly reduced. But there are other benefits. Tobe continued next week