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Cybersecurity in the Banking Industry: A Growing Concern for East Africa
Despite advancements, challenges remain as financial institutions grapple with the threat of cybercrime.
Nairobi, Kenya - As the world becomes increasingly digital, cybersecurity has emerged as a critical concern for the banking industry. In East Africa, where fintech investments have reached USD 722 million over the past seven years, banks are struggling to keep pace with the rapidly evolving landscape.
Technology Advancements
According to a recent study by the Global Business School Network (GBSN), the top five technology advancements in East African banking include:
- Mobile banking
- Online banking
- Open banking
- Bank assurance
- Cloud computing
These innovations have been driven by the need for faster access to 24/7 banking services, increased operational efficiencies, and cost savings.
Cybersecurity Concerns
However, despite these advancements, cybersecurity remains a major concern. The study found that while technology controls such as network firewalls, anti-malware solutions, and backups are essential, some banks are still lagging behind in implementing critical processes to mitigate cyber risks.
Regulation and Guidelines
Regulation has played a key role in enhancing cyber risk management practices, with the establishment of the 2014 African Union Convention on Cyber Security and Personal Data Protection leading to commendable advancements in data protection legislation. Central bank guidelines and data protection laws have also been instrumental in outlining minimum security measures for organizations.
Challenges Ahead
Despite these efforts, challenges remain. The study highlighted the need for greater investment in human resource development across organizations, policymakers, and law enforcers to guide the changing face of technology innovation and avert potential cybersecurity risks.
Positive Developments
In a positive note, regulators are adopting models such as fintech observation techniques in controlled sandbox environments, showing an intention not to stifle innovation but rather ensure policy guidelines are well-informed to avoid negative outcomes and cybersecurity risks.
Conclusion
Cybersecurity is a growing concern for East Africa’s banking industry, requiring continued investment in technology, regulation, and human resource development. As fintech innovations continue to shape the landscape, it is essential that financial institutions prioritize cybersecurity risk management practices to ensure the integrity of customer assets.
SWIFT Institute Supports Cybersecurity Research
The SWIFT Institute, a non-profit organization set up by SWIFT, funds independent research, supports knowledge-led debate, and provides a forum where academics and financial practitioners can learn from each other. The institute’s work aims to promote collaboration between industry experts, researchers, and policymakers to address the complex challenges facing the global payments industry.
This article highlights the importance of prioritizing cybersecurity risk management practices in East Africa’s banking industry, as fintech innovations continue to shape the landscape.