Africa’s Fintech sector is booming! According to reports, Africa’s Fintech ecosystem has surged 60% in the last two years and the continent’s Fintech firms have grown to 491 from 301 in 2017, with $132.8 million raised in 2018, making last year the sector’s best year yet – and proving the sector’s readiness given the high mobile phone penetration levels and the boom in mobile financial services and payment technologies.

In fact, the development of mobile technology has paved the way for Africa’s Fintech revolution where South Africa, Nigeria and Kenya account for 65.2% of Africa’s Fintech startups. “Such Fintechs have had a significant impact on the financial services landscape of these countries, where locally, these solutions are reaching more Kenyans than ever before,” says Bethwel Opil, Enterprise Sales Manager at Kaspersky in Africa. “In fact, Kenya has brought about practical Fintech experiences making it one of the most financially inclusive countries in Africa and where mobile money transactions contribute a significant percentage to the country’s GDP.”

Locally, many businesses and consumers are taking advantage of the ability to use digital methods to move money around. However, this emerging Fintech space is also becoming an increasing target for cybercriminals.

“Young startups are always more exposed than traditional businesses, and their undeveloped infrastructure, especially at startup stage, make them an easier target than traditional banks,” says Opil. “Additionally, there are a growing number of businesses that are using or offering cryptocurrency and mobile money as payment methods and cybercriminals are embracing this trend, using sophisticated techniques to access funds.”

The rise of cyberattacks

Operating over the Internet makes Fintechs vulnerable to technological problems and cybercrime and, while mobile payment methods offer a convenience that is hard to debate, the system is suffering a wave of attack. SIM swap fraud is being used to not only steal credentials and capture one-time passwords (OTPs) sent via an SMS, but also to cause financial damage to victims by resetting the accounts and allowing fraudsters to access currency accounts not only in banks, but also in Fintechs and credit unions.

“Most Fintech companies do not have proper defences in place to protect their services and their users against a data breach and the unregulated market doesn’t make it easier,” add Opil. “We are also now seeing cybercriminals demanding ransoms in cryptocurrency given the anonymity of the market and the fact that there is little chance of being tracked. As a result, security education, awareness and ensuring that it is seen as a priority is critical as the Fintech market grows.”

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