Cybercrime Wreaks Havoc on Finance Industry in Djibouti: Experts Warn
Cybersecurity Concerns Top Risk Factor for Financial Institutions in Africa
For the second consecutive year, financial institutions in Africa have identified cybersecurity concerns as their top risk factor. According to the 2023 African Financial Industry Barometer survey, a staggering 74% of participants believe that cybersecurity regulation needs improvement.
The report, developed in partnership with the Africa Financial Industry Summit and Deloitte, reveals that:
- 97% of surveyed executives at top financial institutions in Africa consider cybercrime a significant threat.
- Macroeconomic conditions, political and social instability, and security risks were also identified as major concerns facing financial institutions in Africa.
Cybersecurity Incidents Result in Significant Losses
Cybersecurity incidents have resulted in losses estimated between $3.5 billion and $4 billion annually across the continent. The survey found that:
- 97% of leaders at financial institutions in Africa rank cybercrime and regulatory constraints on cybersecurity as the leading threat to the financial services industry, alongside worsening economic conditions.
Recent Development: Leaked Data Containing Customer Information Sold for $250,000
In a recent development, Nigerian cybersecurity professional David Sennaike revealed an alarming finding on social networking site LinkedIn. He claimed to have discovered a post on dark web forum Breached.co offering leaked data containing: + Customer information + Login details of employees + API access of 43 Nigerian banks The dataset was being sold for $250,000 on the forum.
Financial Institutions in Nigeria Fall Victim to Cyber Attacks
Several financial institutions in Nigeria have fallen victim to cyber attacks or fraud incidents between 2022 and 2023, including: + MTN + Fintech Flutterwave
Groups Formed to Combat Fraud and Share Data
The worrying trend has led to the creation of groups to fight against fraud by sharing data. For example: + Project Radar: includes Flutterwave as a member alongside other fintechs and eKYC firms.
Data Sharing on the Rise, But Challenges Remain
According to the report, African financial institutions are increasingly willing to share incident risk data (50%), fraud data (42%), and data for interoperability of digital payments (50%). However: + Only 24% of financial institutions surveyed currently share data. + 36% planning to establish partnerships to enable data sharing in the short to medium term.
Cybersecurity Regulation Needs Improvement
Only 15% of surveyed financial industry leaders consider how cybersecurity is regulated in Africa to be effective. A staggering 74% say there needs to be improvement, while 11% are unsure or believe regulation is non-existent.
Economic Concerns Loom Large
Declining economic fortunes are also a major concern for financial institutions in Africa, with the World Bank predicting: + A decline in growth from 4.1% in 2021 to 3.6% in 2022 and 3.1% in 2023.
Financial Institutions Remain Optimistic
Despite these concerns, banks, insurance firms, and other financial institutions remain optimistic about their business prospects, with only: + 15% of respondents predicting that unfavourable macroeconomic conditions will persist over the next three years in Africa.