CHAPTER TWO

LITERATURE REVIEW
THEORETICAL FRAMEWORK
DEVELOPMENT MEDIA THEORY
The Development Media Theory was propounded by Dennis McQuail (1987). It canvasses media
support for an existing government and its efforts to bring about socio-economic development. It
argues that until a nation is well established and its economic development well underway, media
must be supportive rather than critical of government, but assist them in implementing their
policies.
As the name implies, the theory relates to media in developing nations. It favours journalism that
seeks out good news, requires that bad news stories are treated with caution, for such stories
could be economically damaging to a nation in the delicate throes of growth and change. The
media is seen to fulfill particular social and political duties; hence media freedom while desirable
should be subordinated to national integration, socio-economic modernization, promotion of
literacy and cultural creativity. The development media theory is applicable in this sense because
it is relevant in terms of context. The theory seeks to accentuate the positive and nurtures the
autonomy of the developing nations and gives special emphasis to indigenous cultures. It is both
a theory of state support and one of resistance to the norms of competing nations and competing
theories of media.
As the press performs its responsibilities, it is expected to bear the following tenets in mind:
Media must accept and carry out positive development tasks that are in line with the policies
formulated by the political leadership and freedom of the press should not be at variance with
economic priorities of the government and the development needs of the citizenry. Media should
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therefore give priorities to the coverage of those areas that touch on the lives of the people. In
other words, content should be development-driven and should centre on socio-economic and
political lives of the people. The Mass media should accord priority to politically, geographically
and culturally contiguous developing countries in their coverage as part of the holistic strategy
for less developed societies.
This theory is relevant to this study as the concepts of communication and development in the
Nigerian banking industry to our understanding of development communication. The main
reason of communication is to bring about or expedite the process of development. It is also
aimed at getting peoples involvement through education. Development communication is meant
to break the wall of ignorance about BVN, thus empower the people. These people can be
informed by the mass media through the proper dissemination of not only mere information, but
development-driven information in the form of news, editorial, features, among others. This will
stimulate development and it should be the concern of BVN implementation in Nigeria.
TECHNOLOGY ACCEPTANCE MODEL
Perceived usefulness is defined as being the degree to which a person believes that the use of a
system will improve his performance. Perceived ease of use refers to the degree to which a
person believes that the use of a system will be effortless. Several factorial analyses
demonstrated that perceived usefulness and perceived ease of use can be considered as two
different dimensions (Venkatesh et al, 2002).
The Technology Acceptance Model postulates that the use of an information system is
determined by the behavioral intention, but on the other hand, that the behavioral intention is
determined by the persons attitude towards the use of the system and also by his perception of
its utility. According to Davis, the attitude of an individual is not the only factor that determines
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his use of a system, but is also based on the impact which it may have on his performance.
Therefore, even if an employee does not welcome an information system, the probability that he
will use it is high if he perceives that the system will improve his performance at work. Besides,
the Technology Acceptance Model hypothesizes a direct link between perceived usefulness and
perceived ease of use. With two systems offering the same features, a user will find more useful
the one that he finds easier to use. The Technology Acceptance Model (TAM) (Davis et al. 1989)
is the most-widely cited explanatory model of an individual's acceptance of a specific
technological innovation. Because of the technological characteristics of the Internet, the
Technology Acceptance Model is increasingly applied to account for the main antecedents and
determinants (external, perceptual and attitudinal) of Internet usage (Venkatesh and Davis 2000;
Venkatesh et al. 2002). Several researchers have replicated Daviss original study to provide
empirical evidence on the relationships that exist between usefulness, ease of use and system use
(Adams, Nelson & Todd 1992).
This theory is relevant to this study because the vast majority of the Nigerian banks have set very
high standards of excellence for themselves in terms of technology, state-of-the-art facilities, and
customer service and customer orientation with all facets of operations totally computerized.
Perceived ease of use of the BVN technology is a persons conviction that the BVN is easy to
understand and to use, while perceived usefulness is a persons conviction that the usage of BVN
technology will benefit the user. TAM allows us understand the attitude toward using is defined
as attitude toward the usage of BVN in the form of acceptance or refusal when a person uses a
technology in his tasks. Actual usage is the actual adoption of a technology, which can be seen in
the measurement of the frequency and time length of the usage of the technology.

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A CRITICAL ANALYSIS OF THE BANK VERIFICATION NUMBER PROJECT

INTRODUCED BY THE CBN
This 2015 study by Ehi Eric Esoimeme critically analyses the centralized biometric identification
system tagged Bank Verification Number (BVN). The BVN project was introduced by the
Central Bank of Nigeria due to increasing incidents of compromise on conventional security
systems (password and PIN) and a high demand for greater security for access to sensitive or
personal information in the Banking System. This study sought to determine whether or not the
project can achieve its core objectives. The paper relied mainly on primary and secondary data
drawn from the public domain. It also relied on documentary research.
The study shows The BVN project requires individuals performing banking transactions (e.g.,
applying for loans) to identify themselves using their biometric features which will be matched
against information in the central database. The aim of this approach is to protect customers
bank accounts from being accessed by a person who is not the customer. The BVN project
requires banks to uniquely verify the identity of each customer for know your customer (KYC)
purposes. The BVN project requires individuals who are signatories to corporate accounts to
enrol. Individuals who are not signatories but are still benefiting from profits paid into the
account are not required to enrol. This approach is inconsistent with the interpretive note to
Recommendation 10 of the FATF Recommendations (2012). The interpretive note requires
financial institutions to identify the individuals exercising control of the company. The nonidentification of all directors and shareholders of companies could allow for the unlawful use of
such companies for money laundering activities.
With regards to the provision of financial services, Nigeria lags behind some of its peer African
countries. In 2010 for instance, only 36% roughly 31 million out of an adult population of 84.7

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million were served by formal financial services, compared to 68% in South Africa and 41% in
Kenya. Between 2008 and 2010, the percentage of "completely excluded" fell from 53% to 46%,
while those served by the "informal sector" fell from 24% to 17%. At the same time, "formal
other" doubled from 3% to 6% and "formally banked" rose from 21% to 30%. In view of this
fact, the Central Bank of Nigeria and other stakeholders in October 2012 implemented a National
Financial Inclusion Strategy to decrease the number of Nigerians that are excluded from
financial services from 46.3 % to 20.0 % by 2020 as committed to in the Maya Declaration. The
BVN project may pose a threat to the potential success of the National Financial Inclusion
Strategy.
In view of the above analysis, this paper makes the following recommendations that Automated
Teller Machines should request for biometric identification, All Directors and shareholders of
companies should enroll, Customers who are unable to enrol at banking premises should be
allowed to enroll online. Since it may be impossible to capture their biometric data online, banks
could use the biometric information already captured during the voters registration process.
Alternatively, banks could use FreeSpeech voice biometrics solution to automatically confirm
and identify such customers.
TOWARDS IMPLEMENTING AN EFFICIENT BIOMETRIC AUTHENTICATION
FRAMEWORK FOR NIGERIA CUSTOMER BANKING SYSTEMS
Iyawe (2010) conducted a survey that reviews the current practices in Nigerias customer
banking services; reveals the results of a survey and suggests a more efficient biometric
framework for a more secured Nigeria Customer Banking System. Customer banking, which
includes a wide spectrum of banking services, must be carried out with proper authentication to
ensure not only the security of transactions, customers information and funds, but also the

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protection of the Banks global image and brand. It is clear that Information Security and
Information Management tend to interrelate in innovative systems thereby triggering the need for
sustainability. The uses of traditional forms of authentication such as signatures, Identity cards
and PIN have not adequately met this security need. In recent times, biometric technologies have
been typically used to analyze human characteristics for security purposes as biometric-based
authentication serves as a solidified form of authentication for real-time security processes.
A survey was conducted for this research and targeted 100 respondents based on random
selection. Data was collected via interview and questionnaire. The questions sought to determine
the banking services utilized by the respondents, the method of authentication employed by each
respondents bank for account access, the respondents level of experience of biometric
authentication systems and the method of banking authentication preference. It was found that
The superiority in extended biometric authentication cannot be overlooked. This system when
applied would help in ensuring efficient transaction security. The banking industry in Nigeria has
been very responsive to better technology as individuals (customers) that depend on banking
institutions for various financial transactions tend to increase constantly. Regardless of context,
customers need assurance of security for their information or assets in the bank. As biometric
authentication takes effect in Nigerian banks a more positive response would be to implement a
biometric framework in the customer banking system that incorporates several biometric
authentication systems such as the one in this study. It was hereby recommended that an
implementation of a multi-biometric system in customer banking authentication should be
applied in all banking activities and services.

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THE EFFECT OF BVN ON SOCIAL SECURITY AND CREDIT RISK

Oladogba (2015) reviews the role of BVN aimed at curtailing hazards associated with social
security and credit risk cannot be underestimated. In recent times, biometric technologies have
been used to analyze human characteristics as an enhanced form of authentication for real-time
security processes. In the face of increasing incidents of compromise on our conventional
security systems (password and PIN), the need for greater security on access to sensitive or
personal information in the Banking system becomes inevitable. From the inception of this
Verification system, the debate has been to ascertain the extent to which fraud would be
prevented, a valid credit monitoring system would be ensured as well as tax compliance.
The system felt the need to build a more solidified system to integrate, coalesce and synchronize
the credit system such that the credit appraisal procedures of banks would be strengthened, a
common database of customer information would enable lenders to determine credit worthiness
and the ability to detect blacklisted customers and fraud would be detected among others.
The role of BVN is aimed at militating against fraud and enhancing banking operations, yet it
has certain shortcomings that could be of threat to socio-economic growth and development.
These effects of BVN are highlighted below:

Vulnerability: From the Economist point of view, the cost of implementing this project
may seem far beyond the quality of delivery as security is posed to a threat of privacy and
technical vulnerability as it happened in the past with a similar case of identification with

the National Identity Management Systems (NIMC).

Many people may decide to shun the process of verification due to their narrow
mindedness and understanding, and can even decide not to put their money in banks. This
has an effect on liquidity and the ability of cash inflow to effect credit possibility.

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Reliability: With the recent presidential election conducted where the verification system
found it difficult to accredit real people, the same might be the case and all what people
see as an innovation can end up being a crack in the wall.

He concluded that it will be of great benefit to Nigeria as she undertakes a means to effective
transaction delivery through the BVN irrespective of diversities in opinions, critics and
shortcomings that may ensue in actualization of this project. With 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 (KYC) policy by the CBN and fraudulent activities would be curtailed and
banking activities would be monitored appropriately
CONSUMERS ATTITUDES
Attitude is one of the fundamental factors influencing consumers buying behaviour and have,
therefore, attracted considerable attention from researchers probing the behaviour of bank
customers and their relationship with these institutions. According to Venkatesh et al., 2003,
attitude toward internet banking is defined as an individuals overall affective reaction to using
the internet for his/her banking activities. Fishbein and Ajzen (1975), argued that attitude towards
behaviour is made up of beliefs about engaging in the behaviour and the associated evaluation of
the belief. They defined attitude as an individuals positive and negative feelings (evaluative
affect) about performing the target behaviour. The attitude theory suggests that the more
favorable attitude a person has towards a given product or service, the more likely that person is
to buy or use the product or service, (Ajzen and Fishbein, 1980). Attitudes are said to develop
over time through a learning process affected by reference group influences, past experience and
personality (Assael, 1981). Byers and Lederer (2001) concluded that changing consumer

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behaviour and attitudes rather than banks cost structure determine the adoption of internet
banking. Research on consumer attitude and adoption of electronic banking shows there are
several factors predetermining a consumers attitude towards online and mobile banking such as
a persons demographic, motivation and behavior towards different banking technologies and
individual acceptance of new technology (Howcroft, 2002).
Taylor and Todd (1995) suggested that the different dimensions of attitudinal belief toward an
innovation could be measured using the five perceived attributes (relative advantage,
compatibility, complexity, and trial ability) of the innovation. These attributes were originally
proposed in the diffusion of innovations theory (Rogers, 1983).
The importance of the internet to users banking needs relates to the advantages that accrue to
the users of the technology in question. According to Tornaztky and Klein (1982) relative
advantage is an important factor in determining adoption of new innovations. In general,
perceived relative advantage of an innovation is positively related to its rate of adoption (Rogers,
1983). Agarwal and Prasad (1998) showed that relative advantage of an innovation is positively
related to its rate of adoption. Similarly, as internet banking services allow customers to access
their banking accounts from any location and at any time of the day, it gives advantage to
customers to be able to manage their finances properly and in a more convenient way.
Compatibility is another important dimension of the innovation diffusion theory. In Tornatzky
and Kleins (1982) meta-analysis of innovation, they found that an innovation was more likely to
be adopted when it was compatible with the individuals job responsibilities and value system.
Internet banking has been viewed as a delivery channel that is compatible with the profile of
modern day banking customer, who is likely to be computer literate and familiar with internet
(The Straits Times, 1997).

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Cheung (2000) defined complexity as the degree to which an innovation is considered relatively
difficult to understand and use and found it to negatively influence the adoption of Internet.
Complexity is also considered as the exact opposite of ease of use, which has been found to
directly impact the adoption of the internet (Lederer et al., 2000). Cooper and Zmud (1990)
pointed out that a system that requires less technical skills and operational efforts will be more
likely to be adopted and in turn generate better performance.
On the importance of trialability, Rogers (1983), Agarwal and Prasad (1998) stated that potential
adopters of new technology, who are allowed to experiment with it, would feel comfortable with
it and thus be more likely to adopt it. According to Tan and Teo (2000) if customers are given the
chance to try the innovation, it will minimize certain unknown fears, especially when customers
found that mistakes could be rectified and thus providing a predictable situation.
BVN TECHNOLOGIES
BVN uses biometrics to capture individual characteristics. Biometrics is the science of
identifying, or verifying the identity of, a person based on physiological or behavioral
characteristics (Bolle et al., 2003). Biometric technology is a way of automatically recognizing a
person by traits such as fingerprints, hand geometry, signature, retina, iris, voice, thermal
imaging etc. (Capoor, 2006). Recent advances in reliability and performance and cost drops
make these technologies attractive solutions for many computer and network access, protection
of digital content and physical access control problems. Biometric systems are used for verifying
or recognizing the identity of a living person based on a physiological or behavioural
characteristic (Ruud et al. 2003).This method of authentication requires comparing a registered
or enrolled biometric sample (biometric template or identifier) against a newly captured
biometric sample such as a fingerprint captured during a login. During Enrollment, a sample of

21

the biometric trait is captured, processed by a computer, and stored for later comparison. There
are various methods of biometrics recognition currently available - Fingerprint, Face, Voice, Iris,
Hand Geometry, Vein Pattern, Retina, Signature and DNA Recognitions. Among these the
fingerprint based identification is one of the most mature and proven authentication techniques
(Jain et al., 2000).
Sitalakshmi and Indikas (2008) SWOT analysis of biometric techniques used commercially
reveals that fingerprint, face, voice and signature recognitions form the cheapest biometrics
systems to implement. Most importantly, it is the opinion of this paper that the integration of any
biometric technology be significant to each customer banking service and in context is able to
provide security business solutions beyond measure before cost consideration.
Over the years, biometric technology explored by several banks majorly aims at providing
business solutions and best customer services. Bank of Central Asia, Indonesia incorporates
fingerprint systems to secure the processing of high-value electronic fund transactions. If a large
transfer is initiated, the teller and possibly a supervisor need to be authenticated by the system
before the teller can finalize the transaction. The teller cannot deny performing the transaction. If
under duress, the teller can authenticate with a duress finger (alerting the police) (Krawczyk and
Michaud, 2005). Chase Manhattan Bank utilizes voice recognition for bank transactions where
customers enroll with a standard phrase and when entering the bank, they go to a podium
housing a modified telephone, swipe the bank card (identification), speak the standard phrase
(verification) and then receive a receipt to present to the teller. One advantage of this is that the
cashier is able to pull the customers file before they get to the teller, hence conserving time
(Krawczyk and Michaud, 2005). The Javelin Strategy and Researchs Report (2009) on MultiChannel Authentication via Mobile Banking, the fingerprint, vein pattern and voice
authentications are easy to use formats for biometric identification.
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