BoG fights customer ID fraud with verification system
The Bank of Ghana (BoG) is to introduce a new verification system that will assign specific numbers to bank customers in the various banks. Known as bank verification number (BVN), the new system will help the BoG and other regulatory institutions to identify each banking public with a specific number -- the BVN -- irrespective of the number of accounts, the customer operates in the banking sector.
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The BVN, when introduced, will be the replica of a national identification number (ID), although limited only to the banking sector, and it assign specific numbers to each customer, thereby making identification and tracking of customer transactions easier.
It is to be administered by the Payment Systems Department of the BoG, as part of efforts aimed at fighting customer identity fraud in the banking sector.
After detecting the incidence of fraudsters attempting to use the identities of customers to access their accounts, the Head of the Payment Systems Department, Dr Settor Amediku, told the GRAPHIC BUSINESS that BoG had now resolved to tackle the issue head-on, using the BVN.
"There have been some discussions on it recently and I think we are getting closer to the implementation stage," Dr Settor told the paper on December 21.
"The idea is to have one number that can identify a customer, no matter the bank he/she banks with or the number of accounts he or she holds."
"This way, we can identify all account holders and that should help to reduce the incidence of identity fraud," he added.
Learning from experiences
To help tap into the experiences of other countries, Dr Settor confirmed that a delegation from the central bank recently travelled to Nigeria, where it understudied the BVN system that had been operated by the Nigerian Central Bank over the last three years.
The idea was to understand how their system functions, how Ghana can improve upon the Nigerian version and what pitfalls to avoid, he said, adding that BoG was now due to meet the banking sector on the issue.
"We have scheduled some meetings with the industry stakeholders to try and discuss it with them and get their inputs," he said.
The President of the Ghana Association of Bankers (GAB), Mr Alhassan Andani, told the GRAPHIC BUSINESS in a separate interview that his outfit had heard of BoG's discussions on the BVN but was yet to be formally informed.
While patting BoG on the back for their intentions, Mr Alhassan said the association would not be able to comment properly, given the limited nature of information available to it on the matter.
"When they announce it formally to the banking sector and answer questions on how they are going to implement it, then we can speak properly on it," he said.
Customer identity fraud is rampant in the banking sector, with the advent of electronic banking spiking it.
Beyond the cost and risk to the banks and the customers alike, the unavailability of a unique identification system for bank customers in the country means that each bank would have to produce a 'know your customer (KYC)' document for each customer, something that is a burden to banks.
Should the BVN be successfully deplored, GAB's president said multiple KYC documents for single customers in different banks would now become a thing of the past and that should provide some relief to banks and customers alike.
"To be able to have a unique ID for a customer means a lot to banks and customers and it makes things very easier for banking. If you just provide the BVN, it will be easier for you to bank elsewhere and you will not have to be producing documents everywhere you go," he added.
Details for BVN
Once successful, the GRAPHIC BUSINESS learnt that customers will be given a specific period of time to acquire their BVNs, which will then merge all their accounts into the one number.
While individual account holders will be given single BVNs,the accounts of corporate and institutional customers with multiple signatories will be verified by the BVNs of the respective signatories.
It is, however, not clear what BoG's position will be on customers with multiple accounts that have different names but belong to one person.
The paper also learnt that details of customers, including their bio data, fingerprints and blood group, will be captured and stored for future verification purposes.
