What you need to know:
- The speakers also agreed that amidst the emerging FinTech players with amazing digital solutions, there is need for synergies with traditional financial services providers such as banks.
More than half of cybercrimes are related to fraud and money laundering, the Uganda Financial Intelligence Authority (FIA) has revealed.
According to Sherifah Tumusiime Banana, a Senior Systems Officer at FIA, this statistic is reflective of loopholes in the Financial Technology (FinTech) sector that criminals take advantage of and dupe unsuspecting Ugandans.
She adds that cyber fraud is closely followed by tax-related crimes at about 30 per cent and corruption cases at 5 per cent.
Speaking at an online X-Spaces discussion organized by MTN MoMo on November 23rd 2023, Ms Tumusiime noted that FIA is currently working closely with the Financial Technologies Service Providers Association (FITSPA) to ensure that all FinTech players report directly to them especially about suspicious transactions on their platforms.
The day’s discussion was themed “Financial Technology Security – what companies are doing and what consumers ought to do” and the day’s moderator was Innocent Kawooya, a FinTech specialist and CEO at HiPipo.
Kawooya noted that given the fact that more than 1.2 billion people are financially excluded across the globe, it is very important for financial services providers and world economies to embrace and advocate for digitally secure financial services.
Kawooya noted that as the world is moving into absolute cashless economies, this rapid growth comes with cyber threats. It is therefore very important to create awareness for both service providers and customers on these threats and how to mitigate them.
One of the speakers was Ezra Mujabwami, the Deputy Director ICT Uganda Police Force, who decried the fact that while cybercrime trends are on an upwards trajectory in Uganda, there is a general lack of public sensitization about FinTech-related crime applicable laws.
Uganda has both the National Payment Systems Act and the Data protection and Privacy laws but Mujabwami says very few Ugandans are aware of these laws.
“Crimes are being committed but the victims are not reporting these crimes. There is a lot of ransom-ware, scare-ware, unauthorized FinTech activity, etc but most of them go unreported,” Mujabwami said, noting that Police has instituted a security operations centre and started training officers in electronic crime scene management to improve on implementation capacity and efficiency.
Tumusiime and Mujabwami agree to the fact that Uganda’s cybercrime trends are on the rise and one of the urgent solutions is working with FinTech players to improve their security controls.
Meanwhile, on the side of players, Albert Gita, the Chief Information Officer MTN MoMo Ltd, acknowledged that as a FinTech, MTN need to be very vigilant through rigorous know-your-customer principles for both vendors and customers.
Gita says that all third-party vendors are rigorously scrutinized.
“At MTN MoMo, we handle very large and sensitive financial data. We therefore need to conduct proper due diligence. We assess financial stability, security certification, reputation track record, compliance checks, we do performance reviews for this vendors, etc,” he noted.
The speakers also agreed that amidst the emerging FinTech players with amazing digital solutions, there is need for synergies with traditional financial services providers such as banks.
Andrew Walusimbi, the Leader of Cyber Security Committee of Uganda Bankers Association, said that while FinTechs are creative, banks provide experience and consumer trust.
“We need mutual existence where each player leverages another’s comparative advantage. We all excel at different things. For instance, Banks are risk averse compared to FinTechs. So, FinTechs can benefit from that. FinTechs want a solution that works while banks are risk aware,” he argued.
The speakers also called on all FinTech players to always devise serious cyber security mechanisms to detect crime. Given that these mechanisms require sophisticated infrastructural investment, the speakers agreed that there should be concerted efforts to this cause by all players including governments and private players.
FinTechs were also advised to create user-friendly solutions with clear know-your-customer protocols to create trust among users.