ABSTRACT

The Bank Verification Number (BVN) became imperative following the increasing incidence of compromise on conventional security systems such as password and Personal Identification Number (PIN) of customers. The BVN involves identifying an individual based on physiological or behavioral attributes, such as fingerprint, signatures and others. The customers unique BVN is accepted as a means of identification across all banks system. On the basis of introducing the concepts of Bank Verification Number system, this Research illustrates the role that the BVN plays in Nigerian banks. This research also analyses the existing mode of operation in the banking industry including the need to implement our newly designed Online Bank Verification Number system using PHP as the programming language. The motivation for the choice of this topic is as a result of being a fraud victim and by developing an advanced BVN system, it will help cut down fraud activities in Bank. The methodology adopted for this research include the OOADM, the system development methodology and also method of data collection which helped in all areas of this research.Finally, the designed system was implemented and tested and was very successful.

TABLE OF CONTENTS

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study

1.2 Statement of problem

1.3 Aim and Objective of the study

1.4 Research Questions

1.5 Significance of the study

1.6 Scope of the study

1.7 Limitation of the study

1.8 Definition of terms

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction

2.2 What is Bank Verification Number (BVN)

2.3 The Importance of Bank Verification Number

2.4 Enrolment Process

2.5 What is NUBAN (Nigerian Uniform Bank Account Number)?

2.6   Transition

2.7   Customer Records Database

2.8   Differences between BVN and NUBAN

2.9   Nature of Fraud

2.10   Types of Fraud

2.11   Nature of Computer Fraud

2.12   Types of Fraud Peculiar to Banks

2.13   Processing / Programme State

2.14   Review of Related Works

2.15  Summary of Literature Review and Knowledge Gap

CHAPTER THREE: SYSTEM ANALYSIS AND METHODOLOGY

3.1 Methodology Adopted

3.1.1    Software/System development methodology

3.1.2 Method of Data Collection

3.2   System Analysis

3.2.1   Analysis of the Existing System

3.2.1.1   Weaknesses of the Existing System

3.2.2   Analysis of the Proposed System

3.2.2.1   Advantages of the Proposed System

3.2.2.2   High Level Model of the Proposed System

CHAPTER FOUR: SYSTEM DESIGN IMPLEMENTATION

4.1 Objectives of the Design

4.2   The Main Menu (Control Center)

4.3   System Specifications

4.3.1   Input Format

4.3.2 Output Format

4.4   program Flowchart

4.5   System Implementation

4.5.1   Direct Changeover

4.5.2   Phased Implementation

4.5.3    Parallel Running

4.5.4   Pilot Running

4.5.5   Proposed System Requirements

4.5.5.1   Hardware Requirements

4.5.5.2   Software Requirements

4.6   Program Development

4.6.1   Choice of Programming Environment

4.6.2   Choice of Programming Language

4.7   System Testing

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary

5.2 Conclusion

5.3 Recommendation

5.3.1   Application Areas

5.3.2   Suggestion for Further Research

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Collins, (2014) stated that customers were faced with problem of insecurities on their accounts which made the Central Bank of Nigeria (CBN) on February, 2014 to initiate 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.Collins, (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. The campaign is on, but the public may not realize its importance until it closes in in the new extension deadline, October 2015. Eteyen, (2015).

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. Eteyen, (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.Eteyen, (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. Collins, (2014)

1.2   Statement of the Problem

Over the years, 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. Adam, (2007). 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 hall. 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.

1.3   Purpose of the Study

The purpose of this research is to design and implement an online Bank Verification Number System for Nigerians in the Diaspora and at home to use. To achieve the following objectives:

       i.            Examine the benefits of adopting an online BVN system.

     ii.            Identify the necessary structures need to run a successful online BVN system.

  iii.             Identify challenges in the design and implementation of an online BVN system.

  iv.            Design and implement and online BVN system.

1.4   Research Questions

       i.            What are the benefits of adopting an online BVN system?

     ii.            What necessary structures are needed to run a successful online BVN system?

  iii.            What challenges exist in the design and implementation of an online BVN system?

1.5   Significance of the Study                                           

This research work 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 web application to restore confidence in the banking sector as more clients will be assured that their funds are safe, and the stress of queuing at banks will be totally eliminated.

This research work will also serve as a guide to other student researchers who may want to conduct further research on the subject matter. Findings and recommendations from this system will aid in developing newer versions to serve optimally.

1.6     Scope of the Study

The scope of this research work covers the issues of Bank Verification Number and its implication on the Nigerian economy and the banking sector, i.e. to design and implement an online bank verification number system that will help customers have a unique number to guide their banking and business activities. The design system can be automated in different banking system in Nigeria.

1.7     Limitation of the Study

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and 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.

1.8  Definition of Terms

BVN: Bank Verification Number

CBN: Central Bank of Nigeria

Biometrics: Biometrics refers to identification of an individual based on physiological attributes- fingerprint, voice, facial features etc.

NUBAN: Nigerian Uniform Bank Account Number.

ICT: Information and Communication Technology

ECOWAS:Economic Community of West African States.

Fraud: Fraud is an act of deceiving somebody illegally in order to make money or rather to obtain goods.

FBI: Federal Bureau of Information.

KYC: Know Your Customer.