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PROJECT TOPIC- IMPLICATION OF BANK VERIFICATION NUMBER POLICY ON CUSTOMERS SAFETY (A STUDY OF FIRST BANK ABAKALIKI BRANCH)

PROJECT TOPIC- IMPLICATION OF BANK VERIFICATION NUMBER POLICY ON CUSTOMERS SAFETY (A STUDY OF FIRST BANK ABAKALIKI BRANCH)

ABSTRACT

The study determines the effects of BVN policy on customer’s safety. Data were obtained through a primary source in which a sample of 98 respondents was drawn from among the staffs and customers of First Bank, UBA and Diamond Banks all in Abakaliki. Questionnaire structured on a five point likert scale was adopted in collection of data for the study. Attention was directed towards banks staffs and some bank cutomers of different banks. Data obtained were analyzed with the aid of percentage and mean analysis, while z-test statistics was adopted in testing hypothesis guiding the study. Findings from the study show that, to increase security and to prevent bank customers from illegal transactions the Central Bank of Nigeria (CBN) implemented a new verification system for bank customers in Nigeria called the Bank Verification Number; finally, the study shows that Bank Verification Number (BVN) implementation increases the confidence bank customer’s have in their dealings with the banks. The findings imply that BVN scheme has both positive and negative effect on bank customer’s dealings with the banks. The study therefore recommends that measures should be taken to ensure all their by boosting their confidence with the banks in their dealings.

CHAPTER ONE

INTRODUCTION

1.1: Background to the Study

Over the years, there have been a lot of problems in banking sector, specifically; the banking sector is filled with the problems of insecurity on customer accounts. Therefore the CBN faced with the problem of insecurity on customer accounts, the Central Bank of Nigeria (CBN) on February, 2014 initiated a compulsory bank verification number exercise which provides account holders with a unique number that enables the account holder to have a single identity in the banking system aimed at protecting bank customers from identity theft and other financial/economic crimes emanating in the banking sector of Nigeria (Orji, 2014)

The Bank Verification Number (BVN) is a bold step taken by the Central Bank of Nigeria, to strengthen security in the banking sector of Nigeria. One beauty of the BVN is that transactions will be safer once it is implemented fully. The BVN exercise aims at ensuring that bank transactions are safer and fraudulent transactions are minimized, if not totally eliminated. BVN uses biometric technology to register customers in the banking sector.

It records these physical features which are unique to individuals — fingerprints and the face. The record would be used to identify the person afterwards. Once a person’s biometrics have been recorded, and BVN issued the account would be accessed through BVN. The major objectives of the initiative are to protect bank customers, reduce fraud and strengthen the Nigerian banking system (Adekunle 2015).

Biometric enrolment is helpful to people who cannot read and write. Their finger prints and pictures would serve the same purpose as signatures. Multiple account holders would be covered with a single registration in any of the banks where they have accounts (Adekunle 2015). BVN will help the banking system reduce situations where loan defaulters, for instance, move from one bank to the other and the banks extend new credits to them, without knowing their history. Banks would be able to track transactions across all banks in Nigeria with more ease (Adekunle 2015).

Nevertheless, customer’s Bank accounts are protected from unauthorized access with the use of BVN. Through an enhanced biometric real-times security system, the danger of unauthorized access to customer’s bank account is brought under check. The BVN is encompassing in detecting fraud of whatever type, whether through unauthorized access or through illegally authorized forms and any other forms of fraud that’s against the rule of law and social justice (de Meza & David, 2010). The major objectives of BVN initiative are to protect bank customers, reduce fraud and strengthen the Nigerian banking system which gave rise to the research to study on the implication of BVN policy on customer’s safety.

PROJECT TOPIC- IMPLICATION OF BANK VERIFICATION NUMBER POLICY ON CUSTOMERS SAFETY (A STUDY OF FIRST BANK ABAKALIKI BRANCH)

1.2 Statement of the Problem

The banking sector of Nigeria has played the role of the intermediate body in regards to ensuring the smooth running of the economy and coordination other sectors involved in the circular flow of income in the Nigerian economy. However, growth in this sector has been reduced due to high cases of economic and financial crimes (Udenze, 2014). Fraud and money laundering have had adverse impacts on our national development and particularly on the financial system.

They have caused damage to the reputation of the image of the country, loss of FDI, poor infrastructural development, dwindling confidence and distortions in our political as well as financial systems, among other things. In view of these crises crimes perpetuated by cyber thieves, the mandatory bank verification number exercise embarked by various banks nationwide has also caused congestions in banking halls. Although the exercise commenced since

February, 2014, the fire brigade approach of most Nigerians has warranted most bank halls to be filled to its maximum capacity. Queues in some banks even extended outside the banking hail. This development has caused confusion in some banking halls as other transactions are placed on hold due to inadequate staff to attend to clients or delayed indefinitely. However, BVN is a great initiative that would reduce illegal banking transactions and improve national financials intelligence gathering which will boost the confidence customers have on their financial institutions and the economy at large (Ajijola,2015).

The interest of account holders (bank customers) should be accorded important so that their increased confidence in the banking systems would improve the financials standing of banks customer will use banks more when they know that their transactions are safe (Evangelista et al, 2001). BVN offers vast opportunities to protect customers, banks and the entire financial system. However, the research is examining the Implication of bank verification number (BVN) on customer safety

1.3 Objective of the Study

The objectives of the study are the examination of the implication of BVN policy on customer safety. Specifically this study is aim at ;

– To determine the relationship between BVN and bank customers transaction safety.

– To determine the relationship between BVN and banks customers information safety.

– To determined the effect of BVN on bank customer’s confidence.

1.4 Research Questions

This study could be guided by the following research questions:

  1. What is the relationship between BVN and bank customers transaction safety?
  2. What is the relationship between BVN and bank customers information safety?
  3. What is the effect of BVN on banks customers’ confidence?

1.5 Research Hypothesis

H0: There is no relationship between BVN and Bank customer transaction safety

H1 there is Relationship between BVN and banks customers transaction safety.

H0; there is no relationship between BVN and bank customer information safety.

H1 There is relationship between BVN and bank customers information safety.

H0: BVN does not have effect on bank customer confidence.

H1 BVN has effect on bank customer’s confidence

1.6 Significance of the Study

The study will aid in reducing queues at banking halls and reducing identity theft if successfully implemented. Bank managers and other stakeholder in the banking industry of Nigeria can use this system to restore confidence in the banking sector as more clients will be assured that their funds are safe.

The study will also serve as a guide to other student researchers who may want to conduct further research on the subject matter.

1.7 Scope of the Study

The relationship between banks and its customers is governed by the level of services rendered to the customers and the extent at which the security attached to the services rendered protects the interest of the customers.

The scope of this work is focused on the directed effect (negative and positive) and the after effect which comes as a result of the implementation of the bank verification number system by banks in Nigeria citing First bank Abakaliki Ebonyi state branch.

1.8 Limitation of the Study

As this is a relatively new area, not much research has been carried out due to non availability of important literature work and text. Due to the sensitive nature of the study this would place a constraint on the method of analysis available for the study, cost of material and time constrains in which this study must be completed. In spite of these shortcomings, this research was carried out comprehensively.

PROJECT TOPIC- IMPLICATION OF BANK VERIFICATION NUMBER POLICY ON CUSTOMERS SAFETY (A STUDY OF FIRST BANK ABAKALIKI BRANCH)

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