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Fintechs are vulnerable targets for cybercriminals – Kaspersky

23 Sep 2019, 04:57 pm
Financial Nigeria
Fintechs are vulnerable targets for cybercriminals – Kaspersky

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Kaspersky said fintechs are suffering a wave of attacks because of their underdeveloped infrastructure, especially at the startup stage of their operations.

Graphic image of cyber attacker

In an opinion release by Kaspersky, the global cybersecurity company said Africa's emerging financial technology (fintech) space is increasingly becoming a target for cybercriminals. Kaspersky, a cybersecurity and anti-virus provider, also said the fact that fintechs operate over the internet makes them vulnerable to technological problems and cybercrime.

Kaspersky said fintechs are suffering a wave of attacks because of their underdeveloped infrastructure, especially at the startup stage of their operations. 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,” said Bethwel Opil, Enterprise Sales Manager at Kaspersky in Africa. “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.”

In the opinion piece, Opil said there is no substitute for vigilance – if something looks suspicious in any way, users should be advised not to make the payment or investment. Consumers who are using mobile cryptocurrency as an investment or payment method should also ensure that they verify the wallet’s address.

“Don’t just follow links, double check everything before sending the transaction and make sure you use a high-quality security solution to safeguard the devices you use,” added Opil. He also said, "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 fintech market in Africa has been growing and will continue to grow. According to alternative industry reports cited by Kaspersky, Africa’s fintech ecosystem has surged 60 percent in the last two years. The continent’s fintechs have grown to 491 from 301 in 2017, with $132.8 million raised in 2018, making last year the sector’s best year yet. South Africa, Nigeria and Kenya account for 65.2 percent of Africa’s fintech startups, said Kaspersky.

“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,” said Opil. “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.”

Opil, however, added that like any growing digital economy, where there is opportunity, there are cybercriminals. He said, “And while cybercrime and the importance of security has certainly come to the fore, it needs to be a priority on the business agenda to ensure we can reap the benefits of a maturing Fintech space.”

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