Banks and another round of customer registration

President Goodluck Jonathan launched the National Identification Number (NIN) in October last year, and expressed displeasure at the proliferation of data capturing activities by private and public institutions. Citizens’ daily activities are thus centred on maintaining multiple ID cards, leaving room for little else. As the president correctly surmised, such proliferations do not make good economic sense or grant any advantages in efficiency.

So it is a surprise that the Nigerian Bankers Committee has authorised its members to add to the plethora of identification documents. This would mean that banks in the country will soon carry out biometric registration of their customers. Customers would be required to register in order to, according to the Committee, fight fraud and money laundering, and enhance the protection of bank customers. The main advantage of biometrics in the banking industry is to ensure that customers cannot operate accounts in different names.

However, for many years since the consolidation of reforms in the banking and financial sector, new customers are required to do the biometric registration, while existing ones were asked to update their records by going through the same process. Another round of the same registration would add to “registration fatigue” that appears to be setting in among many bank customers. There are various organisations like the passport office, visa application centres, Federal Road Safety Corps (FRSC), Independent National Electoral Commission (INEC), the Nigerian Police Force and many others, that require biometric registration for an ID. The banks have done that, and they want to do it all over again. Before announcing the policy, the Central Bank of Nigeria (CBN), which chairs the Committee, said it was working with the Nigerian Communication Satellite (NIGCOMSAT) to activate internet connectivity in all 774 local governments as a means of making the biometric registration comprehensive and sustainable. But this should have been done before the commencement of any registration.

The claim by the banks that their capacity to lend is being hampered by the identity issue is debatable, because it can also be argued the problem stems from their demand for high collaterals on small loans. Even the most established bluechip companies complain about the inability of the banks to lend larger sums for long term investment purposes. It is somehow a stretch to argue that biometrics alone without a change in attitude towards genuine risk taking can create a credit system with sufficient fluidity to power the economy. It is also hard to understand why banks that already have their customers’ fingerprints would want them for a second time. Apparently the new system will lead to the issuing of a bank verification number, which is a unique identity for every bank customer. It is supposed to provide a central database for all banks customers and, when completed, all automated teller machines (ATMs) and point of sales (POS) platforms would be operated biometrically, the current problems with their operations notwithstanding. In any case, such obviously huge undertaking would have been more cost-effective if the database of the nascent NIN was tapped into, in partnership with the national commission, to provide all that the banks need to identify current and new customers. It is vitally important therefore that public institutions and private organisations end the nightmare of Nigerians who must carry multiple pieces of documents to identify them. They would get the same result with greater fidelity if biometrics from a central point organised in such a way as to provide all the required information. That is why they should partner with the identity commission to bring out a single recognizable, acceptable and generally applicable ID card for all Nigerians.