CRITICAL ASSESSMENT OF THE ROLE OF BANK VERIFICATION NUMBER IN REDUCING FRAUD IN NIGERIAN BANKS
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CRITICAL ASSESSMENT OF THE ROLE OF BANK VERIFICATION NUMBER IN REDUCING FRAUD IN NIGERIAN BANKS
BACKGROUND OF THE STUDY
The rate at which fraudulent activities are occurring 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 of all of these issues, the central bank of Nigeria made it compulsory that all account holders have a bank verification number so that the account holder can have a bank account. The purpose of this system is to assist banks in protecting their customers from theft and other financial/economic crimes that are on the rise in the banking industry (orji, 2014).
The Bank Verification Nlumber (BVN) is a significant step taken by the Central Bank of Nigeria to improve financial security and order in Nigeria’s banking system. One of the benefits of the BVN is that transactions will be safer if all protocol requirements are met.
The goal of this BVN operation is to make bank transactions safer and to reduce, if not eliminate, fraudulent transactions. The central bank of Nigeria has worked hard to ensure the success of this exercise,
but the general public is unaware of the significance of the bank verification number; however, they became aware of the significance of the bank verification number when the central bank stated that the exercise would end in October 2015.
To register consumers in the banking sector, the bank verification number system employs biometric technologies. It records physical features that are unique to individuals,
such as fingerprints and facial features; this technique was made effective since each individual has his or her own unique finger prints. Following that, the record would be utilised to identify the individual.
Once a person’s biometrics have been registered and a BVN has been issued, the account can be accessed using BVN. The initiative’s main goals are to safeguard bank customers, reduce fraud, and enhance the Nigerian banking sector. People who are unable to read or write can benefit from biometric enrollment. Their fingerprints and photographs would function similarly to signatures.
1.2 STATEMENT OF THE PROBLEM
Without a question, the Nigerian banking sector has contributed to the country’s prosperity and development. The Nigerian banking sector has kept money flowing into the country in order to keep the economy stable.
According to Udenze (2014), progress in this sector has been slowed due to high rates of economic and financial crime; fraud and money laundering have a substantial impact on financial security in the Nigeria banking business.
They have, among other things, damaged the country’s prestige, lost FDI, inadequate infrastructure development, diminishing confidence, and distortions in our political and financial institutions.
In light of these crisis crimes perpetrated by cyber criminals, the necessary bank verification number exercise undertaken by various banks nationally has also resulted in banking hall congestion.
Although the practise began in February 2014, the fire brigade approach of most Nigerians has resulted in most bank rooms being filled to capacity. Queues outside some banks’ banking halls were even longer.
This event has generated consternation in certain banking halls, since other transactions have been put on hold or postponed indefinitely due to a lack of staff to respond to clients.
1.3 OBJECTIVES OF THE STUDY
The primary goal of the research is to gather data on the impact of BVN on financial security in Nigerian banks. The following are the study’s specific objectives:
To track the impact of bank verification numbers on the level of financial crime in Nigeria.
To allow everyone to use a single account
To assist in limiting the number of accounts owned by a single person.
To look at the involvement of Nigeria’s central bank in the implementation of the bank verification number system.
To look into the influence of the BVN system on the level of financial security in Nigerian banks.
1.4 RESEARCH QUESTIONS
1. How has the BVN affected the level of financial crime in Nigeria?
2. What effect does the BVN system have on the level of financial security in Nigerian banks?
3. What is the role of the Nigerian Central Bank in the implementation of the BVN?
1.5 SIGNIFICANCE OF THE STUDY
The research work is very important because 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 initiatives, which will help limit everyone to a single account in order to monitor the level of financial crime in Nigeria.
The study will also look at the involvement of Nigeria’s central bank in the deployment of the bank verification number system. Finally, the study will go into the impact of bank verification numbers on security.
1.6 SCOPE OF THE STUDY
The investigation of the influence of BVN on financial security in Nigerian banks is the scope of the research.
1.7 LIMITATIONS OF THE STUDY.
The investigation is limited to the Central Bank of Nigeria’s Uyo branch.
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