Financial Crime World

Cybersecurity Threats Haunt Financial Institutions in Uganda

The rapid growth of digital financial services in Uganda has brought about a new set of challenges, including the ever-present threat of cybercrime. With more than half of cybercrimes in Uganda related to fraud and money laundering, it’s essential for fintech companies and the general public to be aware of the risks.

Statistics on Cybercrime in Uganda

  • More than 50% of cybercrimes in Uganda are related to fraud and money laundering
  • Identity theft, unregulated fintech, and cyberstalking are common crimes
  • Tax-related crimes account for approximately 30% of cybercrimes, with corruption cases making up the remaining 5%

Need for Collaboration between Fintech Companies and Regulatory Bodies

Experts emphasized the critical need for heightened cybersecurity awareness among fintech companies and the general public. Sherifah Tumusiime Banana, a Senior Systems Officer at the Uganda Financial Intelligence Authority (FIA), revealed that tax-related crimes account for approximately 30% of cybercrimes, with corruption cases making up the remaining 5%.

  • The FIA primarily serves as an information-gathering and analyzing entity, reporting suspicious online financial activities to relevant authorities
  • Fintech companies must collaborate with regulatory bodies like the FIA to enhance their security controls

Public Awareness and Reporting Cyber Crimes

The Deputy Director of ICT at the Uganda Police Force, Ezra Mujabwami, raised concerns about the lack of public awareness about laws governing FinTech-related crimes. He emphasized the importance of reporting cybercrimes and revealed that the police have initiated a security operations center and training programs for officers in electronic crime scene management to enhance implementation capacity and efficiency.

  • Cybercrime trends are on the rise in Uganda
  • Collaboration between fintech players and regulatory bodies is essential to counter these challenges

Solutions to Counter Cyber Crimes

To counter these challenges, the industry is exploring various solutions, such as:

  • Escrow services
  • Consumer insurance programs
  • Publication of ‘bad actor’ lists
  • Government or commercial entities offering ‘good actor’ designations to establish trust

Synergy between Fintech Players and Traditional Financial Institutions

The discussion emphasized the importance of synergy between emerging fintech players and traditional financial institutions like banks. Leader of the Cyber Security Committee of Uganda Bankers Association Andrew Walusimbi underscored the complementary roles of fintechs and banks, calling for mutual existence where each player leverages the other’s comparative advantage.

Conclusion

The rapid growth of digital financial services in Uganda comes with its own set of challenges, including the ever-present threat of cybercrime. It is incumbent upon all stakeholders, including governments and private sector players, to join hands in addressing these challenges.