NCBA Group MD Urges SACCOs to Strengthen Cybersecurity Efforts as Digital Adoption Soars

The cooperative movement in Kenya continues to thrive, playing a key role in the country's economy by mobilizing savings and driving investments. However, as SACCOs adopt digital solutions to improve access and convenience, they are becoming increasingly vulnerable to cyber threats. This growing risk was a central theme during the SACCO Banking Engagement, where NCBA Group Managing Director John Gachora emphasized the need for SACCOs to strengthen their cybersecurity defenses.

Speaking at the event, John Gachora warned of the cyber risks facing financial institutions in Kenya. Citing the Central Bank of Kenya's Banking Sector Innovation Survey for 2023, he pointed out that "cyber risk turned out to be the most significant risk area for financial institutions in their innovation endeavors, with approximately 91% of Kenyan financial institutions experiencing at least one cyberattack in 2022."

Gachora stressed the importance of protecting SACCOs, given their critical role in the financial ecosystem. Kenya's cooperative movement is ranked first in Africa and seventh globally, controlling over 30% of the country's household savings and contributing more than 40% of the nation's GDP. SACCOs also directly impact the livelihoods of millions of Kenyans, with over 14 million members and over 500,000 people employed within the sector.

“Given the significant role SACCOs play, it is essential that they fortify their cybersecurity measures as they adopt more digital solutions,” Gachora urged. Currently, an estimated 67% of SACCOs in Kenya have embraced mobile banking and digital wallets to serve their members more effectively. However, as SACCOs digitize, the risk of cyberattacks increases significantly.

Collaboration Between SACCOs and Banks

NCBA has a longstanding relationship with SACCOs, having grown its market share in the sector from 1.8% in 2022 to 12.6% in 2023. The bank has introduced several digital solutions designed to enhance the operational efficiency of SACCOs. These include:

- Check-Off Automation

- Automated Direct Debits

- Virtual Accounts

- Open Banking Solutions

Gachora highlighted that the line between banking and SACCO services is becoming increasingly blurred as SACCOs fill financial service gaps in many parts of the country. With financial systems becoming more interconnected and interlinked, the cybersecurity stakes have never been higher.

He referenced NCBA's own investments in cybersecurity, revealing that the bank spent nearly $5 million in 2023 to upgrade its cybersecurity infrastructure. These investments included cloud migration, data quality management, and server upgrades. Gachora emphasized that NCBA has deployed advanced security technologies to detect, prevent, and respond to cyber threats within seconds.

“Our experience shows that with the right governance, compliance, and partnerships with cybersecurity experts, SACCOs can significantly reduce their vulnerability to cyberattacks,” Gachora noted.

Building Resilience in the Financial Sector

Gachora urged SACCOs to take proactive steps to protect their digital platforms and to collaborate with banks like NCBA to build resilient financial systems. He emphasized that cybersecurity is not just about technology but also about governance and compliance, as well as ongoing training for employees.

“As SACCOs become more interconnected and innovative, the risk of cyber-attacks will continue to rise. We must anticipate threats and implement measures to stay a step ahead,” he stressed. Gachora also encouraged SACCOs to adopt similar cybersecurity frameworks as those used by banks, which include robust protocols, security assurance, fraud management systems, and continuous security awareness programs.

Gachora concluded his remarks by reaffirming NCBA’s commitment to supporting SACCOs in navigating the complexities of cybersecurity. “The future of SACCOs and the entire financial sector lies in our ability to build resilient systems,” he said. He urged SACCOs to leverage the insights shared during the forum and turn them into actionable strategies that can safeguard their operations.

The SACCO Banking Engagement brought together key stakeholders from the cooperative and financial sectors, with discussions centered around innovation, cybersecurity, and the future of SACCOs in Kenya.

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