Financial Crime World

Cybersecurity Threats to Finance in El Salvador Exposed as Country Grapples with Digital Transformation

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A recent country diagnostic report for El Salvador, sponsored by the World Bank Group’s Digital Economy for Latin America and the Caribbean (DE4LAC) initiative, has highlighted a plethora of cybersecurity threats facing the country’s financial sector. The report assesses the nation’s digital economy and identifies opportunities and challenges for promoting widespread access to digital technologies.

Challenges Facing El Salvador’s Financial Sector

  • Lack of affordable international connectivity, with almost 50% of the population lacking internet access
  • Low ranking (107th out of 193 economies) in the United Nations’ E-Government Development Index (EGDI) report (2020), indicating a significant need for upgrading government services and public platforms
  • Limited access to finance, skilled labor, and cybersecurity concerns

Opportunities for Digital Financial Services (DFS) and Fintech

  • Strengthening El Salvador’s ecosystem for DFS and fintech
  • Improving trust in digital transactions through the development of a national authentication platform
  • Addressing cybersecurity risks, with 58% of companies reporting having faced at least one cyber incident in 2020

Recommendations for Policymakers

  1. Investing in Digital Infrastructure: Improving access to affordable high-speed internet and upgrading institutional capacity.
  2. Modernizing Legal and Regulatory Frameworks: Strengthening legal and regulatory frameworks to support digital innovation and development financing.
  3. Improving Digital Literacy: Promoting digital literacy among individuals and developing a digitally competent workforce.

The Importance of Digital Transformation

A carefully considered combination of public policies aimed at improving access to affordable high-speed internet, overcoming constraints in institutional capacity, boosting digital inclusion, and improving trust in the digital economy is crucial for enabling El Salvador to benefit from the opportunities arising in an increasingly digitized global economy.

About the DE4LAC Initiative

The Digital Economy for Latin America and the Caribbean (DE4LAC) initiative, supported by the Digital Development Partnership (DDP), aims to advance digital solutions and drive digital transformation in developing countries. The partnership brings public and private sector partners together to facilitate digital innovation and development financing.