The introduction of the Bank Verification Number (BVN) in Nigeria marked a significant step in enhancing financial security, reducing fraud, and improving identity management within the banking sector. Launched in 2014 by the Central Bank of Nigeria (CBN) in collaboration with the Nigeria Inter-Bank Settlement System (NIBSS), the BVN system assigns unique biometric identifiers to bank customers, ensuring greater transparency and accountability in financial transactions. While the BVN has improved identity verification and fraud prevention, it has also raised critical concerns regarding data protection, privacy, and regulatory oversight. With increasing reliance on digital financial services, the protection of sensitive biometric and personal data has become a major challenge. As of 2018, Nigeria lacked a comprehensive data protection law, relying on fragmented regulations such as the Cybercrime Act of 2015 and sectoral guidelines issued by the National Information Technology Development Agency (NITDA). The absence of a robust legal framework has led to concerns over unauthorized data access, potential misuse of biometric information, and the absence of clear data governance policies. Comparatively, jurisdictions with well-defined data protection laws, such as the European Union’s General Data Protection Regulation (GDPR), provide stringent safeguards for biometric data, setting standards that Nigeria has yet to meet. This paper examines the implementation of the BVN system, its role in financial security, and the challenges of data protection in Nigeria. It highlights the legal and regulatory gaps in safeguarding biometric data and proposes strategic recommendations for strengthening data privacy policies, enhancing cybersecurity measures, and aligning Nigeria’s regulatory framework with global best practices. Strengthening data protection laws will not only improve consumer trust in financial institutions but also fortify Nigeria’s digital banking ecosystem against cyber threats and identity theft.