‘BVN Challenges Stem From Banks’ Inefficiencies’
Mr Olaniyi Adekeye, a leading financial analyst in this interview with TOBI AWODIPE in Lagos speaks on the advantages and challenges of the Bank Verification Number as well as likely reasons why some people are yet to get theirs done.
What is the Bank Verification Number (BVN) and what are the benefits that can be derived from it?
The Bank Verification Number (BVN) is a process of registering your personal details with your bank and in return, you would be given a code, which would become your identifier. The idea of BVN was born from the need to give every bank customer a unique identification code that would support the Know Your Customer (KYC) initiative of the various banks. Banks are supposed to know and properly identify their customers as well as be able to trace them if the need arises. This is supposed to work both ways, for the customers as well as the bank. It is supposed to protect the customers by preventing or minimizing unauthorized access to customers’ accounts. This would however depend on the level of configuration of the entire process. One would expect that if it works well and in that case, if you want to use a cheque or any online platform banking application, all you need to do is put in your BVN.
Right now, some banks issue tokens to process online transactions, but with this number, you may not need all those secondary tools to personify your identity. Once you have the BVN, which is biometric in nature and has all your data, all you need is your fingerprint, seeing as it is unique to you, to facilitate transactions. Your fingerprint would automatically identify you. The truth is that ordinary identity cards are no longer enough to properly identify an individual and differentiate between genuine customers and fraudsters, seeing that fake identity cards are easily obtainable. So even if someone is in possession of your vital documents, that wouldn’t still be sufficient enough to use against you, steal from you or commit fraud in your name, because of the fingerprint factor on your BVN card.
The truth is that both the customers and the banks would benefit from proper use of the BVN because it would protect the customers as well as the bank from financial fraud.
The customers’ account is secure; nobody has access to it, since the fingerprint would be needed to authenticate transactions of any kind. Fraud has become so common these days and family members are defrauding each other, so anyone can fall victim, even from within. Sometimes, it may be that you were careless with your bank details or password or accessed your account in a public place and your password or details were gotten one way or the other, the BVN would protect you in this instance.
It was reported that some politicians and highly placed people as well as a number of individuals still do not have their BVN till now. With all the advantages you have listed, why do you think they are refusing to get one?
Personally, I couldn’t speak for them and they may have their reason(s). However, this may be an unexpected benefit for the bank because in the course of dealing with customers, they are supposed to be in control of the identity of the person they are dealing with. If they do not know whom they are dealing with very well, they might find themselves in all sorts of legal problems in the future.
Furthermore, some people collect loans from one bank/have banking issues and go and try to get loan from another bank without settling the previous debts. With the BVN, which is unified, once you get to another bank, that person would be flagged off immediately as a bad debtor by the original lending bank.
Formerly, there is no common platform that banks use, something like a credit bureau, where banks can check the credit worthiness of a potential customer. With the BVN, which boasts of a common database, banks can access it. So any bank you walk into today, with that number, your information is already known. The major advantages of the BNV still remains that the banks would know their customers well, as well as their credit worthiness.
It appears the BVN has several challenges because a lot of customers cannot access their accounts despite doing the process before the deadline and linking all accounts. Why is this so?
It is not supposed to present a challenge but given our history with logistics handling in this country, it is not surprising. It also stems from inefficiency on the part of the various financial institutions. Most people are experiencing problem from linkage of their accounts. I feel that the banks didn’t understand the process fully in the beginning, but they have improved now. In any case, it is a debit restriction that is being placed on the accounts and this can be easily rectified once you speak to the banks’ customer care.
The restriction is just to compel people to either get the BVN done or link their accounts properly. If you haven’t done your BVN yet, that one isn’t the banks fault, you chose not to be bankable. Don’t be deceived, some people haven’t done their BVN and they are accusing the bank of wrongdoing, you are at fault and not the bank.
In your opinion, what other factors are responsible for non-compliance?
Illiteracy and poor awareness about the process especially in rural places and amongst uneducated people is one factor. Some people are going about telling people that their accounts would be hacked into with the BVN registration but this is totally false.
Another factor, which some people have talked about, is the time factor. Some people are genuinely very busy and may not have the luxury of time to queue up in a banking hall for hours on end to get it done, while others in remote locations that come to the bank probably bi-monthly may not get the chance to do this. Some others were just negligent and thought it was unnecessary but I believe that by now, they know it is necessary. Luckily, those in the Diaspora have their deadline extended, so they still have time to do theirs.