BVN will stem tide of cybercrime in financial services sector

Identity fraud and fraudulent transactions are major risks in the global banking system, and that is why financial institutions go to great lengths in trying to insulate banks from cybercrime and other fraudulent activities.

In fact, PwC’s Global Economic Crime Survey 2016 revealed that cybercrime  has now jumped to the second most-reported crime globally, and that 54% of organisations have been hit with cybercrime in the last two years. One of the main targets for cybercrime is without a doubt banks. Banks from all over the world have been hit by hackers.

Recognising this present danger, the West African Monetary Institute (WAMI) is collaborating with central banks in the West African Monetary Zone (WAMZ) to launch the Bank Verification Number (BVN) which records the fingerprints and a facial photograph of clients.

We understand that Nigeria is the only country in the sub-region to implement the BVN, and it is instrumental in preventing crime and reducing fraud within the country’s financial services sector. A Kenyan-based IT firm, Serianu Limited, revealed recently that cybercrime cost the Ghanaian economy some US$50million in 2016.

A cybersecurity firm pointed out that cybercrime will continue to rise in the country if businesses, particularly the financial services sector, do not put in effective countermeasures.

Hence, this Paper sees the development as a positive one since WAMI is undertaking technical preparations for the establishment of a common West African central bank, as well as launching a single currency for the West African Monetary Zone (WAMZ).

At the recent Presidential Task Force on the ECOWAS single currency held in Accra – the fifth, to be precise – participants were purposed that implementation of the single currency cannot be re-scheduled beyond 2020; and to achieve this monumental target, the incidence of cybercrime and identity-theft needs to be brought under control. This is how we understand the need to launch the BVN within WAMZ.

We are pleased that as countries work at achieving the convergence criteria required for implementation of a single West African currency, we are also taking steps to contain fraud in the banking system so that meeting convergence criteria is not inhibited by any underhand or opaque transaction.

People are fond of opening bank accounts with multiple banks and taking loans with various banks, and it is difficult for the banks to exchange notes on loan defaulters etc. – therefore, it is worthwhile for WAMI to tighten the loose-ends.