’s Growing Challenges Challenges for Kenya in Managing Cyberattacks and Fintech Growth

Over the years, the cyberspace in Kenya has experienced the emergence of numerous key technologies. Especially in the domain of finance, innovative technologies--such as M-PESA which upended the global mobile money transfer market, electronic transactions, Internet transactions, and web transactions--have been seen. The fintech revolution has allowed the country to achieve near-total financial inclusion. Per the latest African Development Bank (AfDB) figures, Kenya is one of Africa's top performing economies, with an expected 6% growth each year. Kenya has been leading the way in Africa when it comes to financial inclusion, which is boosting the economic Market. With the transition away from traditional face-to-face transactions to e-commerce transactions, the number of such transactions is now reaching a million a day. Mobile payment systems have had a profound effect on the less privileged by cutting costs, time and effort as well as increasing the transparency and reliability of money exchanges. Individuals are more and more relying on this method to access a wide range of financial products such as savings accounts, insurance policies, loans, investments and bill payments, as well as numerous other services. Data from the country's central bank shows that mobile money transactions totaled 17.8 billion shillings in the first quarter of 2021, while the highest levels ever were achieved in December 2020, with 605.7 billion shillings transacted. This means that Kenyans are now conducting close to half of the country's gross domestic product (GDP) through their cellphones, emphasizing the increasing importance of digital wallets in providing a safe platform. In earlier years, mobile money platforms were mainly used for peer-to-peer (P2P) transfers, but now they are being increasingly utilized for more business-related operations, including buying goods and services and processing of rapid short-term loans. Sadly, the Kenyan market has become a victim of cybercrimes and fraud due to higher transactions. The Communications Authority of Kenya’s sector report for Q4 2020 registered a drastic hike in cyber threats, soaring by over 50 per cent from 35.1 million to 56.2 million incidents. Notably, malware and application attacks were identified as contributing greatly to the rapid increase of cybersecurity issues. The number of banking malware threats is on the rise as hackers take advantage of the ever-increasing popularity of mobile banking through smartphones. They use various techniques to try and steal personal financial data and credit card information. Techniques employed may range from keystroke capturing, overlaying official bank login pages with their own transparent overlay, taking screenshots, to gaining access to Google Authenticator codes. What steps can we take to reduce the dangers posed by the expanding digital financial sector? It is important to emphasize that the risk of a negative event occurring is the result of vulnerabilities and threats present. Threats can be natural (such as fire or earthquakes) or human-induced (such as employees, contractors, customers or externals). Vulnerabilities are weaknesses seen in security protocols, designs, or implementations. Cyber-attacks have become more prevalent and the interconnectivity that comes with technological developments in finance have increased the access points for such attacks, along with the potential for it to have system-wide effects. The frequency, unpredictability, and the risk of effecting the entire system of risk management makes cyber-attacks particularly difficult to handle. If such attacks are successful, it could have an adverse effect on the take-up of digital financial products, denting the trust in technology-focused business models, and ultimately hindering growth in the fintech sector. The threat landscape is ever-evolving and exceedingly intricate, cyber security risk management is often inadequate, and financial systems keep becoming more connected (IMF, 2018). This sounds disheartening, but there are measures that can be taken, starting with monitoring ones behaviour online; users should abstain from banking on public Wi-Fi connections, opt for multi-factor authentication when it is available, create strong passwords, and not use any common personal info such as birthdays or pet names. Recognizing and uncovering a strike is just as imperative as being able to preserve and reply to it. in your systems; and eliminate any potential threats Refresh your operating system and applications; analyze your networks for weaknesses; and remove any potential dangers. Create an offline copy of your data It is essential to create and retain offline, encrypted backups of data, and to make sure they are tested periodically. This is because many types of ransomware attempt to erase or encrypt available backups when they become accessible. Training personnel to reduce the possibility of mistakes With 63% of corporations admitting that their employees are not adequately equipped in the area of cybersecurity, the answer to the human-factor problem is to furnish them with appropriate training. Improving the skills of current employees, as well as providing them with more knowledge, can assist in closing the skills gap. Cybersecurity training for users helps improve behaviour related to the use of systems, thus decreasing the chances of cyberattacks. Furthermore, employees who have gone through such a training can better understand the serious toll a breach of information can take on the reputation and profitability of an organization.

Source: https://medium.com/@sandrawahiga/cyberattack-and-fintech-kenya-b39154d89557?source=rss------fintech-5