Cybersecurity Risks Dominate Concerns for Financial Institutions in Gabon, Africa

For the second consecutive year, executives of financial institutions in Africa have cited cybersecurity concerns as their top risk factor, surpassing every other threat in the financial services sector. A recent survey reveals that 74% of participants believe that cybersecurity regulation needs improvement.

Top Threats Facing Financial Institutions in Africa

The 2023 African Financial Industry Barometer report, developed by Deloitte and the Africa Financial Industry Summit, found 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 threats facing financial institutions in Africa

Financial Impact of Cybersecurity Incidents

Cybersecurity incidents in Africa result in estimated annual losses between $3.5 billion and $4 billion.

Recent Developments in African Cybersecurity

A dark web forum was discovered offering leaked data containing customer information, login details of employees, and API access of 43 Nigerian banks
The dataset is being sold for $250,000 on the dark web forum, raising concerns about the vulnerability of financial institutions in Africa

Cyber Attacks on African Banks and Fintechs

Several Nigerian banks and fintechs have suffered cyber attacks or fraud incidents between 2022 and 2023, including:

MTN, which lost $53 million from its mobile money service
The worrying spate of cyber attacks has led to the creation of groups to fight against fraud by sharing data

The report highlights a trend towards more data sharing among African financial institutions, with:

Approximately 50% willing to share incident risk data
42% willing to share fraud data
Only 24% of financial institutions surveyed currently share data
36% planning to establish partnerships for data sharing in the short to medium term

Effectiveness of Cybersecurity Regulation in Africa

Only 15% of surveyed financial industry leaders consider the current cybersecurity regulation in Africa effective, with:

74% believing there needs to be improvement
11% not knowing how cyber and information security is regulated or believing it is non-existent

Economic Outlook for Financial Institutions in Africa

Despite concerns about the impact of poor economic outlook, banks, insurance firms, and other financial institutions remain optimistic about their business prospects. However, declining economic fortunes are also a major headache for financial institutions in Africa, with economic growth expected to dip to 3.1% in 2023 due to global sluggish growth, persistent inflation, and tough financial conditions.