Cyberattacks, data breaches cast shadow over Nigeria’s fintech growth

As Nigeria’s digital finance ecosystem experiences unprecedented growth, it faces a rising threat from cybersecurity breaches that could undermine progress in the fintech sector.

With cashless policies driving the adoption of digital wallets, mobile payments, and Decentralized Finance (DeFi) solutions, industry leaders are urging fintech companies to prioritize robust security measures to counter the growing sophistication of cyberattacks.

Bidemi Oke, a fintech expert and Chief Executive Officer of digital assets solution platform, FlashChange says Cyber attacks, including phishing, malware, and ransomware, are on the rise.

“These threats pose significant challenges for Nigerian fintech companies, threatening not just their operations but also the trust of their users,” he explained.

In 2022, the Nigerian Communications Commission reported over 150,000 phishing attempts, particularly targeting the banking and financial sectors.

This growing trend threatens to undermine trust in digital financial services, deterring further adoption of cashless transactions.

Cybercriminals exploit systems vulnerabilities through targeted attacks, which can result in data breaches, identity theft, and financial losses.

To combat these threats, Oke suggested critical cybersecurity strategies.

He explained that adopting multi-factor authentication, end-to-end encryption, machine learning algorithms, and anti-fraud systems are essential to safeguarding digital platforms.

“These measures are crucial and should be prioritized to monitor and detect suspicious activities and transaction anomalies,” Oke added.

Despite these challenges, Nigeria’s digital finance future remains promising. Blockchain technology and DeFi are emerging as game-changers, offering transparency, security, and innovative ways to manage finances.

According to Oke, “DeFi and blockchain technology are gaining ground not only as alternatives but even offering traditional institutions improved operational efficiency.

They provide new solutions for managing money while addressing some of the inefficiencies in traditional systems.”

These technologies, he added, have the potential to significantly mitigate cybersecurity risks due to their decentralized nature and inherent transparency.

However, they also come with their own set of challenges, including the need for regulatory clarity and education to encourage wider adoption.