More fintechs in the Kenyan market means more vulnerability to cyber crime

As an increasing portion of Kenya’s finance and financial services sector transitions to the online domain, consulting firms and bankers alike have expressed their concern that large repositories of personal and financial data are now under risk due to vulnerable cybersecurity. 

Kenya – much like the rest of Africa – represents the dichotomy of a newly digitalised market. As the country’s economy grows to become a regional hub of growth and foreign investment, an increasing portion of the Kenya’s population has now gained familiarity with the digital sphere.

Nevertheless, new online users tend to be vulnerable to predators in the cyber arena, which is particularly dangerous when a growing portion of users begins to conduct financial activity online. Banking and financial services is one sector that has rapidly taken to digital applications across Kenya in recent times.

Management consultancy McKinsey & Company has explained in the past how small fintechs are gradually expanding their influence in the sphere of daily borrowing and lending transactions. Other consulting firms have indicated that cyber criminals are growing increasingly active in the Kenyan market.

“Cyber criminality follows broadband and Internet penetration. As we become more online, these risks and threats start manifesting themselves. One of the clearest statistics is that this market isn’t slowing down from a cybercrime perspective. This is growing year-on-year by close to double-digit,” said Samresh Ramjith of EY.

The scenario is one that has prompted action from government authorities in the country. The Kenya Communications Authority, for instance, announced last year that it would introduce extra regulatory measures on the exchange of data on online platforms such as Skype, Facebook and WhatsApp.

Bankers associations as well as the Central Bank of Kenya have urged customers to maintain a degree of vigilance when conducting financial transactions online, particularly in terms of engaging in such activity on public networks. Meanwhile, consulting firms in the country have been establishing advanced cybersecurity practices to help meet the growing demand for support in this domain.