IMPACT OF BANK VERIFICATION NUMBER ON REDUCTION OF FRAUDS IN NIGERIAN BANKING INDUSTRY
This study examined the effect of bank verification number (BVN) on reducing fraud in Nigeria bank. The study was carried out using descriptive research design. The population of the study was made up of staff of First Bank Nigeria Plc. A total number of 129 copies of questionnaire were administered to respondents during the study; while a total of 98 copies were properly filled and returned for the analysis. Non-parametric test statistics of Spearman’s Rank Correlations with the aid of the Statistical Package for Social Sciences (SPSS 23.0) was employed to test the hypotheses in order to ascertain the relationship between the dependent and independent variables in each hypothesis. Test of hypotheses was undertaken at five percent (5%) level of significance. The result of the study revealed that bank verification number has a significant impact on financial crimes in Nigeria; BVN system has a significant impact on financial safety in the Nigerian banking industry; and that implementing biometric security system significantly aid customers’ satisfaction in the Nigerian banking sector. The study recommended that proper check should be done from time to time to make sure there is no malfunctioning in the system of bank verification number (BVN).
1.2 Statement of the Problem
Without doubts, Nigerian banking sector has contributed to the growth and development of the country. The Nigerian banking sector has maintained the inflow of money in the country so as to stabilize the country’s economy. But in the face these important roles and functions being played by the sector, the banking industry has also come under serious blames and attacks for its involvement in fraudulent transactions, money laundry, economic and financial crimes.
Fraud and money laundry have significant effect on the financial security in the Nigeria banking industry. 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.
Many banks in the past had recorded bad debts, insolvency, and some even folding up because their customers defrauded them. Fraudulent bank customers are found to borrow money without being to be tracked. This situation has made banks to often feel reluctant at extending credits and loans to genuine businesses and private individuals. It is however expected that with Bank Verification Number (BVN), customers who borrow from one bank and default would not go to another bank to borrow without being tracked due to a unified credit performance system as Credit Bureau and lenders would be able to effect ‘Know Your Customer’ policy by the CBN and fraudulent activities would be curtailed and banking activities would be monitored appropriately.
There is a dearth of empirical studies on the role of bank verification number (BVN) in reducing frauds in Nigeria bank. Moreover, the few available studies such as conducted by Esoimeme (2015), Adebayo and Topson (2014), and Udenze (2014) were theoretical studies in nature whose results were subjectively based on leading argument or logic. In this context, it is noted by the researcher that the past studies did not give adequate attention to the underlying effect of bank verification number on reducing fraud in Nigeria, as well as highlighting effective strategies for preventing bank frauds. Hence, the undertaking of this research work will fill in the gap by critically exploring the effect of bank verification number on reducing fraud in Nigeria bank with a particular reference to First Bank Nigeria Plc.
1.3 Objectives of the Study
The major objective of the research work is to assess the effect of bank verification number on reducing fraud in Nigeria bank. The specific objectives of the study are:
1. To examine the effect of bank verification number on financial crimes in Nigeria
2. To investigate the impact of BVN system on financial safety in the Nigerian banking Industry.
3. To examine the impact of implementing biometric security system on customers’ satisfaction in the Nigerian banking sector.
1.4 Research Questions