Securing Africa’s financial sector in the age of fintech and digital banking

Africa’s digital financial sector is undergoing extraordinary transformation, driven by the rapid growth of fintech and digital banking across the continent. However, this expansion also increases businesses’ exposure to cyber threats. In a highly competitive environment, business leaders often prioritise swift go-to-market strategies above all else, pushing cybersecurity further down the development cycle. While this is understandable, companies that implement a robust cybersecurity strategy from the outset build stronger foundations for success.

Cyberattacks are not a problem for tomorrow—they are happening now. The African Cyberthreat Assessment Report 2024 by Interpol reported a 23 percent year-over-year surge in cyberattacks on organisations across Africa. From AI-driven fraud schemes to data breaches, cyber threats are evolving, as are the risks of neglecting them early on. Developing and implementing a multi-layered security strategy can enable financial companies to safeguard their assets, data, and reputation.

Cyber threats in fintech and banking

The financial sector in Africa’s leading tech markets faces particularly acute risks. In Nigeria, fraud losses in the banking sector surged to $762 million in 2022, up from $544 million the previous year. In South Africa, the South African Banking Risk Information Centre recorded a 45 percent increase in fraud incidents in 2023, leading to a 47 percent rise in financial losses, with banking app fraud now accounting for around 60 percent of all digital banking crimes. Egypt’s expanding ICT sector has also seen increased cyber threats, prompting banks to implement advanced security protocols to mitigate vulnerabilities affecting employees, customers, and third-party vendors.

These cyber threats have evolved with increasingly sophisticated tools. Generative AI, for example, enables more convincing phishing campaigns and ransomware attacks that exploit human error with highly targeted, realistic messages. During the first quarter of 2023, 1 in every 19 organisations in Africa experienced a weekly ransomware attack—compared to 1 in 47 in Europe and 1 in 69 in North America. The impact of these attacks is severe: they not only compromise sensitive customer data but also jeopardise institutional integrity, with even a single breach capable of incurring substantial financial and reputational damage.

Shift left, but continue to defend on the right.

In cybersecurity, “shift left” refers to proactively integrating security measures early and continuously throughout the development lifecycle. This approach emphasises preventive security practices, such as governance protocols, awareness-building, and monitoring for potential attack surfaces. In contrast, “shift right” focuses on testing security in post-production, once systems are live.

At Deimos, we emphasise a “shift left” approach with all clients, but it’s crucial to recognise that this is not binary. While proactive security is fundamental, not all risks can be mitigated before they arise. We advocate for readiness in the “defend right” phase, where, if a breach occurs, organisations are equipped to respond with forensics and root cause analysis to contain and reduce the impact.

Five proactive steps for staying ahead of emerging threats:

A multi-layered approach to cybersecurity is essential to counteract risks in this dynamic threat landscape. Key strategies for businesses include:

Establish strong security governance

Implement a robust governance framework with audit logs and compliance practices, especially for managing and investigating internal security breaches. This structure supports tracking incidents effectively and enforces accountability.

Continuous security training and awareness

Regular training is critical for building a security-aware culture. Keeping staff informed on current threats and attack techniques prepares them to act as a first line of defence.

Proactive security posture improvement