New regulations signal stricter identity controls as banks face rising pressure to strengthen fraud prevention and data integrity.
CBN moves to tighten identity controls in banking system
The Central Bank of Nigeria (CBN) has introduced new measures aimed at strengthening identity verification across the banking sector, in a move that could reshape how financial institutions manage customer data and fraud risk.
The changes were outlined in a circular issued to banks, other financial institutions, and payment service providers as part of an addendum to the revised regulatory framework for Bank Verification Number (BVN) operations and watchlist guidelines in the Nigerian banking industry.
Signed by Musa Jimoh, Director of the Payments System Policy Department, the updated provisions are scheduled to take effect from May 1, 2026.
BVN enrolment restricted to adults
Under the revised framework, BVN enrolment will now be limited to individuals aged 18 years and above.
The restriction formally aligns identity verification within the banking system with legal adulthood, potentially tightening accountability and reducing risks associated with identity misuse. It also signals a shift toward stricter compliance standards, particularly as digital financial services continue to expand across the country.
New watchlist framework targets suspicious transactions
A key feature of the new guidelines is the introduction of a temporary watchlist system for BVNs linked to suspected fraudulent activities.
Financial institutions are now required to establish and maintain this watchlist, which will allow flagged BVNs to be monitored for a maximum of 24 hours. During this period, the institution that identifies the suspicious transaction is expected to contact the BVN holder to provide clarification.
The measure is designed to enable faster response to potential fraud cases while avoiding immediate and prolonged restrictions on accounts, thereby balancing security with customer access.
Tighter controls on customer data modifications
The CBN has also introduced new limits on amendments to customer data, specifically targeting phone numbers linked to BVNs.
Under the updated rules, changes to a registered phone number will only be permitted once. The restriction addresses a known vulnerability in the system, where repeated phone number changes have been exploited in identity-related fraud and unauthorized account access.
By limiting such modifications, the regulator aims to enhance the integrity of customer identification and reduce exposure to fraudulent manipulation.
Access to BVN database remains restricted
The circular also reaffirmed that access to the BVN database will remain exclusive to financial institutions licensed by the Central Bank of Nigeria.
However, the apex bank noted that it retains the authority to grant access in exceptional circumstances, provided such approvals are consistent with existing laws and regulatory provisions.
This approach maintains centralized control over sensitive identity data while allowing flexibility for regulatory or legal interventions when necessary.
Implications for banks and digital finance operators
Taken together, the new measures reflect a broader regulatory effort to strengthen trust in Nigeria’s digital financial infrastructure.
For banks, fintech companies, and payment service providers, the changes introduce additional compliance requirements, particularly in areas such as fraud monitoring, customer verification, and data management. Institutions will need to update internal processes and systems to align with the revised framework before the implementation date.
At the same time, the tighter controls are expected to support improved fraud prevention outcomes and reinforce confidence in electronic transactions, which continue to grow in volume and importance within the financial system.
As digital banking adoption accelerates, the effectiveness of these measures will play a key role in shaping the balance between security, accessibility, and operational efficiency across the industry.
