Money Markets
Central Bank of Kenya chairman Mohammed Nyaoga. PHOTO | FILE
By JAMES NGUNJIRI
In Summary
- The caution comes a few days after CBK gave six banks the green light to launch a mobile money transfer platform.
- The network of mobile money agents has grown significantly, from 527 agents in June 2007 to over 165,000 in December 2016.
- Deloitte recently projected that cybercrime linked losses could hit new record this year.
Central Bank of Kenya (CBK) chairman Mohammed Nyaoga
has cautioned banks to be wary of cyber risks in mobile money as the
lenders move towards establishing their own transfer platform.
Mr Nyaoga said as banks embrace new technologies in
provision of financial services, it is equally important that such
innovations should deal adequately with the fast rising risks.
He said a number of consumer protection concerns
have emerged in the sector, including the lack of safeguards for funds
held by non-prudentially regulated providers.
Others are limited disclosure of fees, terms and
conditions, irresponsible lending through the digital channels, and
unclear or limited recourse in case of disagreement with the provider.
“The most significant risks currently relate to
cybercrime and data privacy, even as customers navigate a landscape
strewn with hidden risks,” said Mr Nyaoga during the official launch of
Ecobank Kenya mobile app last week.
“It is essential that we ensure the innovations in the financial sector are conducted safely, without jeopardising financial stability and protecting consumers.”
“It is essential that we ensure the innovations in the financial sector are conducted safely, without jeopardising financial stability and protecting consumers.”
The caution comes a few days after CBK gave six
banks the green light to launch a mobile money transfer platform, a move
set to highten competition in an laready crowded and lucrative
financial services market segment.
The Kenya Interbank Transaction Switch, developed
by the Kenya Bankers Association (KBA) will among other services
facilitate real-time transfer of money between banks without going
through mobile money transfer platforms.
The adoption of mobile money has raised the level of Kenya’s financial inclusion to 75 per cent from just from 26 per cent in 2006.
The adoption of mobile money has raised the level of Kenya’s financial inclusion to 75 per cent from just from 26 per cent in 2006.
In addition, the network of mobile money agents has
grown significantly, from 527 agents in June 2007 to over 165,000 in
December 2016.
Last week, consulting firm Deloitte projected that cybercrime linked losses could hit new record this year.
Deloitte said it is estimated that cybercrime cost Kenyan Internet users and businesses about Sh18 billion ($171 million) last year.
Deloitte predicted that the cost of cybercrime
could rise by as much as 30 per cent this year, as criminals take
advantage of increased internet connectivity and user’ lax security
measures
Deloitte said it is estimated that cybercrime cost Kenyan Internet users and businesses about Sh18 billion ($171 million) last year.
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