FSC raises alarm on cyber-financial crimes
Lewanika Timothy | Monday June 10, 2024 06:00
In its latest update, the Financial Stability Council (FSC), made up of the Bank of Botswana, the Non-Bank Financial Institutions Regulatory Authority, the Financial Intelligence Agency and the Finance ministry, said there is a growing threat to online banking systems, revealing that more financial institutions were getting exposed to the risks of being hacked or interfered with by outsiders.
“With the increasing digitisation of financial services, including online banking, mobile payments and digital currencies, cybercrimes pose a significant threat to the financial sector and the economy,” the council said.
The number of subscriptions for mobile money services in the country rose by nearly 170,000 or 10% last year, as more Batswana opted for the convenient payment and settlement fintech. This trend in the banking industry is bolstered by the surge in the use of the Internet and mobile telephone density in the country.
The Botswana Communications Regulatory Authority (BOCRA), in its latest annual report, revealed that the mobile telephony growth trend in the country was bullish with subscriptions growing over 30% year on year.
“The five-year period demonstrated consistent growth in subscriptions, showing an overall 31% increase from 3,353,337 subscriptions in March 2019 to 4,379,999 subscriptions in March 2023,” the report revealed.
The FSC further noted that technology developments allow for the lower detection of illicit funds which put Botswana at risk of being a hub for the moving of illicit funds if cyber-security laws are not tightened.
“According to the 2023 national risk assessment for money laundering and terrorist financing, the national vulnerability and threat to money laundering were rated medium and medium-high, respectively. This presents a likelihood for the country to be used as a conduit to move funds or be used to raise funds for terrorism activities,” the council said.
Technocrats and other stakeholders are finalising the country’s first cybersecurity law, with proposals for tighter security around strategic sectors of the economy and hefty penalties against criminals, including cyber-extortionists and harmful fake social media profiles.
An Interpol report last year found that Botswana was the third most targeted country for ransomware, attracting six percent of Africa’s attacks in 2022. Local experts said part of the challenge is that while Internet connection and usage has exploded across the country, this has been accompanied by lenient legal penalties and low awareness of sophisticated cybercrime.