Building a secure digital financial sector is a shared responsibility

By Innocent Kawooya, NIM .

Uganda's financial technology (FinTech) sector has experienced substantial growth in the recent years, emerging as a catalyst for financial inclusion and delivering innovative solutions that streamline transactions for a wider audience. However, this expansion has brought forth challenges, particularly in the realm of cybercrime, emphasizing the need for robust safeguards within the entire FinTech ecosystem and the cultivation of unwavering consumer trust.

As is customary, users rightfully expect reliable protection mechanisms to address potential errors or fraud in financial transactions. A recent online discussion, themed "Financial Technology Security – what companies are doing and what consumers ought to do," provided invaluable insights into the current landscape.

Sherifah Tumusiime Banana, a Senior Systems Officer at the Uganda Financial Intelligence Authority (FIA), shared a disconcerting statistic during the discussion. More than half of Uganda's cybercrimes are related to fraud and money laundering, with tax-related crimes accounting for around 30% and corruption cases making up the remaining 5%. This revelation underscores vulnerabilities within the FinTech sector that cybercriminals exploit to deceive users. The discussion stressed the urgent need for FinTech companies to collaborate with regulatory bodies such as the FIA, with Ms. Tumusiime emphasizing the FIA's role as an information-gathering and analyzing entity.

And, as the FinTech sector diversifies into various domains, including money transfers, virtual assets, school payment platforms, online betting, and the dark web, the imperative to bolster cybersecurity measures becomes even more apparent. These sectors host both legitimate and illegitimate businesses, emphasizing the urgency of fortifying cybersecurity measures.

The discussion underscored the necessity of creating awareness among service providers and consumers regarding cyber threats and mitigation strategies. With over 1.2 billion people globally excluded from financial services, it becomes even more critical for FinTech providers and economies to advocate for digitally secure financial services.

Ezra Mujabwami, the Deputy Director of ICT at the Uganda Police Force, raised a significant concern during the discussion about the rising trend of cybercrime in Uganda. He lamented the lack of public awareness about the laws governing FinTech-related crimes, despite Uganda enacting the National Payment Systems Act and Data Protection and Privacy laws. Mujabwami emphasized the importance of reporting cybercrimes and revealed that the police have initiated a security operations center and training programs for officers in electronic crime scene management to enhance implementation capacity and efficiency. Common cybercrimes in Uganda include identity theft, unregulated FinTech, and cyberstalking.

Both Tumusiime and Mujabwami concurred that Uganda's cybercrime trends are on the rise, necessitating collaboration with FinTech players to enhance their security controls. The Uganda Police Force has invested in cybersecurity research and established a sandbox environment for various networks to conduct security checks.

Albert Gita, the Chief Information Officer at MoMo from MTN Uganda, acknowledged the need for stringent due diligence, particularly for third-party vendors handling sensitive financial data. He detailed the rigorous scrutiny process, which includes assessments of financial stability, security certification, reputation track record, compliance checks, and performance reviews.

As such, collaboration between FinTech players and traditional financial institutions is deemed crucial. Building trust requires adherence to international security standards, frequent platform audits, responsive customer service, and acceptable turnaround times.

Going forward, the urgency of strengthening cybersecurity in Uganda's FinTech landscape cannot be overstated. The Uganda Bankers Association's proactive step in establishing a security operations center and initiatives like HiPipo's Mobile Money Police exemplify the commitment to securing the FinTech sector. As we navigate the digital era, cybersecurity becomes a shared responsibility, ensuring that Uganda's FinTech sector not only continues to drive financial inclusion but also safeguards the digital financial ecosystem from threats. It is time for a collective call to action and the championing of a secure digital future for all.

Innocent Kawooya is the Chief Executive Officer of HiPipo.