THE EFFECT OF BANK VERIFICATION NUMBER (BVN) ON FRAUD PREVENTION IN NIGERIA BANKING INDUSTRY AND NIGERIA’S ECONOMY


THE EFFECT OF BANK VERIFICATION NUMBER (BVN) ON FRAUD PREVENTION IN NIGERIA BANKING INDUSTRY AND NIGERIA’S ECONOMY

ABSTRACT:                         

The study examined bank verification number (BVN) and its implications on the banking sector and the Nigerian economy. 

The study made use of primary and secondary data. Primary data was obtained from questionnaires administered to 120 staff of selected banks in Nigeria. 

Secondary data were used to consolidate primary data. Data were collected on number of staff involved in banking sector, total amount involved in fraud, actual amount lost to fraud and number of fraud cases. The independent t-test statistic was utilized to test for significant difference in these variables in periods before (2010-2014) and after (2015-2017) the introduction of BVN in the banking sector. 

The findings showed that: There is significant increase in the number of fraud cases in the banking system in periods after BVN introduction; There is significant reduction in the total amount involved in fraud in the banking system in periods after BVN introduction; There is no significant reduction in the actual amount lost to fraud in the banking system in periods after BVN introduction; There is no significant reduction in the number of staff involved in fraud in the banking system in periods after BVN introduction.

The study concludes that BVN scheme in Nigeria has been partially effective in tackling financial crimes and preventing fraudulent activities in the Nigerian banking system. 

The study suggest that; The CBN should continue to ensure that financial institutions have through knowledge of their customers and their businesses and that banks operating in Nigeria are not used for the movement of illicit funds across the globe; The CBN should closely monitor compliance with the standards for the BVN operations in the Nigerian banking industry contained in its “regulatory framework for BVN operations and watch-lists for Nigerian financial system”. 

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), throughte 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.

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.

1.3 Objective of the Research

i. To examine the effect of Bank Verification Number (BVN) on the level of financial crimes in Nigeria.

ii. To examine the implication of Bank Verification Number (BVN) registration in fraud prevention in the Nigeria banking industry.

iii. To determine the threats and weaknesses of the implementation of Bank Verification Number (BVN).

1.4 Research Question

i. What are the effects of the Bank Verification Number (BVN) on the level of financial crimes in Nigeria?

ii. What is the implication of Bank Verification Number (BVN) on the Nigeria banking sector?

iii. What are the threats and weakness of the implementation of Bank Verification Number?

1.5 Research Hypothesis

Hypothesis One

H0: There is no significant effect of Bank Verification Number (BVN) registration on fraud prevention in Nigeria banking industry.

H1: There is significant effect of Bank Verification Number (BVN) registration on fraud prevention in Nigeria banking industry.

Hypothesis Two

H0: There is no significant role of Bank Verification Number (BVN) initiative in Nigeria banking industry.

H1: There is significant role of Bank Verification Number (BVN) initiative in Nigeria banking industry.

Hypothesis Three

H0: There are no possible threats and weakness to the implication of Bank Verification Number (BVN).

H1: There are possible threats and weakness to the implication of Bank Verification Number (BVN).

1.6 Significant of the Study 

The following are the significance of the study;

1. The outcome of the study will educate the general public on the benefits and implications of Bank Verification Number and its effect in fraud prevention in Nigeria banking industry.

2. This research will serve as a contribution to the body of literature in the area of the  effect of personality trait on students academic performance, thereby consisting the empirical literature for future research in the subject area.

1.7 SCOPE OF THE Study

The research work is limited to the study of the effect of Bank Verification Number (BVN) on the level of financial crimes in Nigeria and the impact of Bank Verification Number (BVN) on fraud prevention in Nigeria to ensure financial security in the Nigeria banking system. Therefore, there would be a practical examination, inside look on specific commercial banks in osogbo, osun state with regards to the Bank Verification Number as a phenomenon with a minimal level of discomfort to researcher.

1.8 Limitation of the Study

Financial constraint: Insufficient funds tend to impode the efficiency of the researcher in sourcing relevenat materials, literature or information and in the  process of data collection (internet, questionnaire, interview).

Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down  on the time devoted for  the research work.

1.9 Definition of Terms

1.10 Organization of the Study

This study will be divided into five chapters and presented as enlisted below:

Chapter 1: Introduction, background of the study, statement of the problems, objective of the study, research question, research hypothesis, significance of the study, scope of the study, limitation of the study, definition of terms, organization of the study. This chapter will

Chapter 2: Literature review and theoretical framework with respect to the  study consideration of previous research,  comparisons and contrasts among several studies.

Chapter 3: Research methodology and model specification.

Chapter 4: Data presentation, analysis and presentation.

Chapter 5: Summary, conclusion and recommendation

REFERENCES

Diamond, Douglas, 1991), Monitoring and reputation: The choice between bank loans and directly placed debt, journal of political economy.

Udenze, B. (2014), BVN: CBN targets 80% fraud reduction in banking sector obtainable at http//sunnewsonline.com/ne

.


TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.COM

Researchwap.com is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.com guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.com is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.com" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.