Cybercrime and Financial Institutions in Somalia: A Growing Concern
Executive Risk Perception
For the second year running, executives of financial institutions in Somalia have ranked cybersecurity concerns as their top risk factor, ahead of every other threat in the financial services sector. According to a recent survey by the Africa Financial Industry Barometer, 97% of surveyed leaders at top financial institutions in Somalia consider cybercrime a significant threat.
Macro and Micro-Level Threats
The survey also revealed that macroeconomic conditions, political and social instability, and security risks are among the most prevalent threats facing financial institutions in Somalia. In fact, 74% of respondents believe that cybersecurity regulation needs improvement, with only 15% considering the current regulatory framework effective.
Recent Cybersecurity Incidents
Recent incidents have further underscored the need for enhanced cybersecurity measures. Just last week, a Nigerian cybersecurity professional claimed to have found a post on a dark web forum offering leaked data containing customer information and login details of employees from 43 Nigerian banks, including some with operations in Somalia. The dataset was reportedly being sold for $250,000.
Collaboration Against Fraud
The worrying spate of cyber attacks and fraud has led to the creation of several groups aimed at fighting against fraud by sharing data. Meanwhile, African financial institutions are becoming more willing to share incident risk data, fraud data, and data to enable interoperability of digital payments.
Economic Challenges
Despite concerns about cybersecurity, declining economic fortunes in Somalia are also a major headache for financial institutions. The World Bank has predicted that economic growth in sub-Saharan Africa will dip to 3.1% in 2023, with persistent inflation and tough financial conditions contributing to this decline.
Optimism Despite Challenges
However, despite these challenges, banks, insurance firms, and other financial institutions remain optimistic about their business prospects in Somalia. Only 15% of respondents predict that unfavourable macroeconomic conditions will persist over the next three years in the country.
Key Takeaways:
- Cybercrime is a growing concern for financial institutions in Somalia
- Macro and micro-level threats are prevalent, with cybersecurity regulation needing improvement
- Recent incidents highlight the need for enhanced cybersecurity measures
- Collaboration against fraud is increasing among African financial institutions
- Economic challenges persist, but optimism remains about business prospects in Somalia