CHAPTER ONE INTRODUCTION 1.1 Background of the study
The role of bank verification number, aimed at curtailing hazards associated with social security and credit risk cannot be underestimated (Leland and David 1977). In recent times, biometric technologies have been used to analyze human characteristics as an enhanced form of authoumatication for real time security processes.
Overtime, there has been increasing incidents of compromise on our conventional security systems 9password and pin) and thus, there is need for greater security on access to sensitive and also, personal information in the banking system.
In the same vein, the extent to which violation in the credit policies and credit monitoring system weakens the financial intermediary system continue to attract empirical and theoretical debate on how well bank verification system would thwart those issues of default and scam.
In the motive of considering and treating challenges with identity management, the central bank of Nigeria (CBN), through te bankers committee in collaboration with all Nigerian banks on February the 14th, 2014, launched a centralized biometric identification system which is known as Bank verification number (BVN).
The bank verification number would give every bank customer, a unique identity across the Nigerian banking industry that can used for easy identification and verification at point of banking operations.
Biometrics refers to identification of an individual based on psychological or behavioural attributes; fingerprint, voice, signature, facial features etc. Bank verification number (BVN) uses biometric technology to register customers in the financial system. It records these physical features which are unique to individuals; fingerprint and the face.
The record would be used to identify the person afterwards (Diamond 1991). Ones a person’s biometric has been recorded, and Bank verification number issued, the account would be accessed through the bank verification number.
The major objectives of the initiative are to protect bank verification number customers, reduce fraud and strengthen the Nigerian banking system as it also positively affects the economy in a general view. ResearchWap
1.2 Statement of the Problems
Bank verification number (BVN) is a great initiative that would reduce illegal banking transactions and improve national financial intelligence gathering which will soon boost the economy. The interests of account holders should be accorded importance so that their increased confidence in the banking system would improve the financial standing of banks. Customers will use banks more when they know that there various transactions at different levels are safe, Bank verification number (BVN) gives much opportunities to protect customers, banks and the entire financial system. However, the researcher is examining the implication bank verification number (BVN) on the Nigeria economy and banking sector. It is important to consider the paramount role of the banking sector in the country’s economy as it has been known to maintain the inflow of money in the country so as to stabilize the country’s economy. According to (Udenze, 2014) ‘growth in this sector has been reduce due to high cases of economic and financial crimes; fraud and money laundering have significant effect on the financial security in the Nigeria banking industry. This problem has caused on the reputation of the image of the country, loss of foreign direct investment (FDI), which would also possibly lead to poor infrastructural development, dwindling confidence and distortions in our political as well as financial system, among many other things. In view of these crises as a result of crimes perpetuated by cyber thieves, the mandatory bank verification number exercise, embarked on by various nationwide has also caused congestions in banking halls. Although the exercise commenced since February 14th, 2014, the fire brigrade approach of most Nigerians have warranted most bank halls to be filled to its maximum and even propably beyond its maximum capacity in recent times.
