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Fintech Growth and The Rise of Cyber Attacks in Africa


TechInAfrica — The growth of mobile technology has supported Africa’s fintech revolution. The ecosystem for fintech startups in Africa has a huge share of 65.2% with a concentration in South Africa, Nigeria, and Kenya.

Africa’s fintech ecosystem has increased by 60% in the last two years, according to reports. Fintech firms in Africa have developed to 491 from 301 in 2017, with $132.8 million secured in 2018. This surging condition makes last year the best year of the sector.

Bethwel Opil, the Enterprise Sales Manager at Kaspersky in Africa, commented, “Such fintechs have had a significant impact on the financial services landscape of these countries, where locally, these solutions are reaching more Kenyans than ever before.

“In fact, Kenya has brought about practical fintech experiences making it one of the most financially inclusive countries in Africa and where mobile money transactions contribute a significant percentage to the country’s GDP.”

Many businesses and consumers are gaining the advantage of the using of the digital methods for their money flows. Despite this convenience, the risk of cyber-attacks has also increased.

“Young startups are always more exposed than traditional businesses, and their undeveloped infrastructure, especially at startup stage, make them an easier target than traditional banks,” Opil said in a statement.

“Additionally, there are a growing number of businesses that are using or offering cryptocurrency and mobile money as payment methods and cybercriminals are embracing this trend, using sophisticated techniques to access funds.”

The operation that occurs over the internet makes fintechs vulnerable to tech problems and cybercrime. The system is under the high risk of attack.

SIM swap fraud is being used to steal credentials and capture one-time passwords (OTPs) sent via SMS. Other than that, this modus is also causing financial damage to victims by resetting the accounts and allowing scammers to access currency in banks, fintechs, and credit unions.

“Most Fintech companies do not have proper defenses in place to protect their services and their users against a data breach and the unregulated market doesn’t make it easier,” said Opil.

“We are also now seeing cybercriminals demanding ransoms in cryptocurrency given the anonymity of the market and the fact that there is little chance of being tracked.

“As a result, security education, awareness and ensuring that it is seen as a priority is critical as the fintech market grows.”

Opil stated that there is no substitute for the vigilante. He suggested that if something looks suspicious in any way, do not make the payment or investment.

He also warned consumers who use mobile cryptocurrency as an investment od payment method to ensure that they verify the wallet’s address.

“Don’t just follow links, double-check everything before sending the transaction and make sure you use a high-quality security solution to safeguard the devices you use.”

The fintech market in Africa will continue to grow – providing high growth potential and opportunities for investments, while simultaneously addressing the need for financial inclusion, said Kaspersky.

“However, like any growing digital economy, where there is opportunity, there are cyber criminals. And while cyber crime and the importance of security has certainly come to the fore, it needs to be a priority on the business agenda to ensure we can reap the benefits of a maturing fintech space,” Opil mentioned.



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