Cybercrime Soars as Financial Institutions in Africa’s Neighbors Reveal Top Fears

Cybersecurity Concerns Reach New Heights

For the second year running, executives at top financial institutions in Africa have cited cybersecurity concerns as their biggest worry. A staggering 74% of participants in the 2023 African Financial Industry Barometer survey believe that cybersecurity regulation needs improvement.

The Growing Threat of Cybercrime

A report by Deloitte and the Africa Financial Industry Summit highlights the trend of increasing sophistication of attacks, with a whopping 97% of surveyed leaders considering cybercrime a significant threat to the financial services industry. This is not surprising, given that across the continent, cybersecurity incidents result in losses estimated at between $3.5 billion and $4 billion every year.

A Sobering Reminder: The Risks Faced by Financial Institutions

The recent leak of customer data from 43 Nigerian banks on a dark web forum was a sobering reminder of the risks faced by financial institutions. This incident serves as a stark warning to African financial institutions, emphasizing the need for enhanced cybersecurity measures.

While only 24% currently share incident risk data, fraud data, and digital payments data, 36% plan to establish partnerships that will enable them to do so in the short to medium term. This trend towards more data sharing among African financial institutions is a positive step towards mitigating cybersecurity risks.

A Poor Economic Outlook: A Major Headache

Despite concerns about cybercrime, financial institutions remain optimistic about their business prospects. However, a poor economic outlook is also a major headache, with only 15% of respondents predicting that unfavourable macroeconomic conditions will persist over the next three years in Africa.

Regulation Lacking

Only 15% of surveyed financial industry leaders consider how cybersecurity is regulated in Africa to be effective. A staggering 74% believe there needs to be improvement, while 11% are unsure or do not know about regulation.

Several groups have been established to fight against fraud by sharing data, including Project Radar of which Flutterwave is a member alongside other fintechs and eKYC firms. As one expert noted, “The worrying spate of cyber attacks and fraud has led to the creation of several groups to fight against fraud by sharing data.”