Dividend or Legal responsibility? Monetary Inclusion, Digital Deprivation, and Cyber Threat Proliferation in South Africa

The Cybersecurity, Capability Improvement, and Monetary Inclusion challenge, or CyberFI, brings collectively a sturdy, clear neighborhood of practitioners and researchers engaged on digital monetary inclusion. This collection focuses on understanding monetary inclusion ecosystems on their very own phrases—what nations are doing, what’s working, and what isn’t. Six nation case research assist seize the variety of monetary markets on the African continent: South Africa, Nigeria, Cameroon, Uganda, Ghana, and Zimbabwe.


South Africa, as a middle-income nation and a member of the Group of Twenty (G20), occupies a singular place amongst African states. Its strong and well-developed monetary and data expertise sectors make sure that it serves as a number one monetary hub in Africa, with round $1 trillion in annual cross-border banking transactions (excluding remittances).1 Regrettably, the fruits of this monetary and digital sophistication are being undermined by excessive ranges of bodily, political, and digital threat. Critically, South Africa’s method and dedication to cybersecurity trails a number of smaller and less-developed African states.

South Africa’s lack of a nationwide cyber technique has resulted immediately in a disjointed and reactive nationwide cyber posture and not directly in a major escalation in critical cyber threats over the previous twenty-four months.2 The Nationwide Cybersecurity Coverage Framework, printed in 2013, acts as an alternative choice to a complete technique. It’s outdated and inadequate for right now’s evolving risk panorama.3 South Africa is likely one of the most digitally dependent states in Africa, but cyber crime is degrading providers, eroding lean income for companies, and impacting financially confused customers.

Digital monetary providers (DFS) and the broader monetary expertise (fintech) ecosystem develop quickly on this context of insecurity.4 Whereas fintech provides a broader vary of tailor-made services to beforehand underbanked South African customers, most of the service suppliers fall inside a less-regulated house than these within the formal banking sector.5 Additionally they lack the substantial digital safety sources of the established company actors available in the market.

Noëlle Van der Waag-Cowling

Noëlle Van der Waag-Cowling is the Cyber Programme Lead on the Safety Institute for Governance and Management (SIGLA), Stellenbosch College.

Fintech’s potential vulnerability to cyber assaults is additional difficult by dangers on the shopper facet. The rising buyer base of beforehand financially excluded clients and microenterprise house owners will increase general susceptibility to digital compromise. That is as a result of impacts of digital deprivation on this shopper demographic leading to decrease ranges of digital and expertise resilience.6

This case research explores the implications of together with new, usually less-resourced clients in a digital monetary ecosystem that’s already ill-suited to supply safety and resilience towards numerous threats. It assesses the intersection of widespread weaknesses and misalignments within the digital monetary ecosystem with the contextual realities of underbanked customers. Mixed, these components propagate potential cyber threat. Higher understanding these dynamics might be essential to foster safe digital growth in South Africa and different nations.

Digital Safety and the Monetary Context

The South African banking system is mature, digitally superior, and internationally aggressive.7 It’s accompanied by a complete authorized and regulatory framework. The main banks handle cyber threat on the company degree in addition to the sectoral degree by way of the collective South African Banking Threat Info Centre (SABRIC).8 To this point, the banks’ dedication to cybersecurity has been laudable. Sadly, it has been considerably offset by wider systemic entropy arising from insufficient nationwide cybersecurity responses and constrained regulation enforcement functionality.9

The worldwide Monetary Motion Job Pressure’s 2021 report on South Africa spotlights substantial fiscal points that have an effect on each monetary safety and cybersecurity. One of many report’s dominant themes is that, outdoors of the massive banks, there’s a restricted appreciation of the danger atmosphere. Different points embrace the shortage of worldwide cooperation in investigations, excessive ranges of corruption, and a excessive nationwide threat profile. The report identifies cyber crime as a significant risk.10

Within the age of digital banking, one critically vital issue is that the regulatory regime of the South African telecommunications sector is considerably weaker than that of the monetary sector. In consequence, there’s a disjuncture within the required cooperative approaches to safety between the 2 sectors.

These systemic points are compounded by a compliance- or audit-based—versus risk-based—method to safety issues within the wider nationwide context, which has resulted in a interval of accumulating cyber threat.11 The compliance-oriented tradition of many South African organizations is essentially pushed by the federal government’s prescriptive administration of the economic system, which has resulted in a posh internet of laws, oversight businesses, and a substantial quantity of crimson tape.12

This example poses a very massive problem for small and medium-size enterprises (SMEs), which embrace most digital monetary establishments (DFIs) and software program design corporations. Because of the adverse impact this has had on enterprise development, each the Worldwide Financial Fund and the World Financial institution have repeatedly referred to as for structural reforms.13

For a considerable variety of firms, the concern of penalties (together with fines and the potential lack of buying and selling licenses) motivates compliance with the wide-ranging rules. The price of regulatory compliance, nonetheless, runs up towards excessive tax charges and costly overheads. This has given rise to the notion that many companies make the most of a disproportionate quantity of their constrained monetary and human sources on compliance-related capabilities on the expense of different enterprise wants, equivalent to expertise budgets and cybersecurity. The monetary challenges associated to conducting enterprise have regrettably resulted in underresourced cybersecurity for SMEs.

Digital Monetary Companies in South Africa

South Africa’s superior and well-distributed banking community signifies that roughly 80 p.c of the inhabitants qualifies as banked.14 Nevertheless, a extra nuanced evaluation reveals that round 45 p.c of the inhabitants makes use of banking solely for low-end transactional functions, equivalent to sending small sums of money or accumulating social grants. This shopper grouping is normally known as underbanked slightly than unbanked or financially excluded.15

In 2018, the South African Reserve Financial institution (SARB) launched “SARB Imaginative and prescient 2025,” its framework and technique for a nationwide fee system. Importantly, the technique set out the purpose of increasing digital fee choices to service all South Africans.16 That is an particularly necessary DFS provision for the underbanked—in contrast to the remainder of Africa, South Africa has not taken rapidly to cell cash.

The SARB technique additionally confused the significance of enhancing the safety of its nationwide fee system by way of technological developments.17 As no entity in South Africa aside from a registered financial institution could take deposits or situation digital cash, DFS suppliers are obliged to forge partnerships with banks to supply any type of monetary transaction service. Banks and DFIs subsequently kind a part of one broader monetary service ecosystem.

The nascent uptake of monetary providers by the underbanked is being pushed by a brand new era of fintechs. There are roughly 200 fintech corporations working in South Africa, and the fledgling business is quickly increasing. The demand for DFS goes past fee options and extends to new types of funding alternatives, because of decrease prices, accessibility, progressive product choices, and new fashions of funding. The large curiosity in funding alternatives particularly—by way of native platforms equivalent to LUNO, StokFella and EasyEquities—reveals South Africa’s urge for food for real-time, lower-fee investments with a direct line of sight.

These merchandise have enabled the fractional possession of home and worldwide devices equivalent to shares and cryptocurrencies. Fractional possession removes the earlier obstacles to entry by enabling traders to start investing with miniscule quantities of cash. StokFella has reimagined the normal financial savings golf equipment often called Stokvels,18 enabling them to construct funding portfolios. EasyEquities has overturned conventional funding fashions—95 p.c of EasyEquities clients are first-time traders. The common age of an EasyEquities consumer is simply twenty-nine, in comparison with traders on the Johannesburg Securities Alternate who common fifty-five years of age. Each platforms have onboarded most of their clients inside the previous twenty-four months.19 The uptake of fintech choices has been essential to creating an funding class in a rustic that historically has very low charges of particular person financial savings and investments.

For fintechs, the twin challenges of survival and development are central components in the course of the start-up part. The dominance of the most important banks signifies that scaling is considerably troublesome.20 A technique fintechs overcome these points is by quickly creating and launching merchandise with a “restricted variety of design, growth and testing sprints.”21 The so-called ‘minimal viable product’ required to check adoption and usefulness is essential.22 Some consider that these accelerated growth timelines may compromise the safety features of product growth, prioritizing first-to-market benefit and consumer expertise over strong safety by design.

One other dynamic that has probably influenced safety tradition at fintechs is the sector’s outsized urge for food for threat. As one former chief data expertise officer at a fintech notes, “They chase aggressive development and in consequence take greater dangers whereas working in ecosystems with bigger, extra established gamers who’re beholden to stringent regulatory and company governance necessities.”23 Buyers in fintech firms and start-ups may play an necessary function by requiring safety by design earlier than funding new tasks and merchandise.

One constructive safety intervention through the SARB has been the introduction of a regulatory sandbox, the place fintechs can take a look at their new merchandise for regulatory compliance.24 Whereas this can be a step in the best path, such a sandbox won’t assist to evaluate doable software program vulnerabilities. A sandbox geared towards testing vulnerabilities in beta variations is a vital subsequent step. Granted, this doesn’t essentially fall inside the ambit of the SARB. Somewhat, it might require involvement from the monetary and telecommunications sectors. The SARB has, nonetheless, prolonged its help for fintechs by establishing a fintech unit that features the World Fintech Hackcelerator, the blockchain-focused Undertaking Khokha, and the Intergovernmental Fintech Working Group (IFWG).25

A possible threat going ahead is the linking of new-generation DFS to e-wallets, which fall below a regulatory framework with less-rigorous necessities. Not like a proper checking account, the regulatory framework for e-wallet accounts doesn’t require account holder registration below the Monetary Intelligence Heart Act.26 E-wallets are as an alternative linked on to the account holder’s cellular phone quantity. These accounts fall outdoors the nationwide funds system and provide restricted performance in addition to a most stability of ZAR 25,000 (about $1,650).27 Low-fee, cell fashions enchantment to the underbanked and there are lots of benefits to such merchandise. However the incorporation of Unstructured Supplementary Service Information (USSD)–primarily based providers in these merchandise in addition to the cellular phone–pushed hyperlink create elevated potential for shopper safety threat.

The Telecommunications Sector

One issue that dominates your complete monetary sector is that the overwhelming majority of South Africans now entry monetary providers through cell channels. Conventional web penetration charges are low in comparison with different G20 nations, however cell penetration is deep. For many monetary service suppliers, new merchandise now give attention to cell supply. Within the context of safety, although, this introduces an necessary new participant into the ecosystem: the cell community operators (MNOs).

The South African telecommunications sector has been much less successfully regulated than the nation’s monetary sector. There are a number of persistent points and practices that have an effect on buyer safety. The regulator for the sector—the Impartial Communications Authority of South Africa (ICASA)28—has been extensively criticized for failing to carry the cell telecommunications business to account.29 ICASA’s lack of efficient governance within the sector has additionally resulted in a multiyear stalled spectrum allocation course of, which has halted the 5G rollout and is hampering digital progress.30 South Africa’s parliament has additionally shouldered blame for failing to supply oversight and permitting ICASA’s regulatory deficiencies to proceed.31

From a buyer safety perspective, key areas of concern brought on by a scarcity of regulatory rigor and accountability embrace Wi-fi Software Service Suppliers (WASPs) and the ever-present SIM swap situation.32

WASPs—a lot of them offshore entities—provide subscription providers and make the most of the MNOs as digital tenants. WASPS don’t seem to fall below ICASA’s space of accountability—which in and of itself requires redress. As a substitute, they’re, in their very own phrases, self-regulating. Ongoing buyer complaints about unlawful subscriptions, airtime theft, the sharing of non-public information, and different unlawful actions by WASPs abound.33 In late 2020, South Africa’s two largest listed MNOs knowingly allowed non-public safety companiesto entry to their platforms through WASPs.34 This allowed sure firms to trace and hint subscribers with out their information.35 In a single significantly high-profile case, it resulted within the assassination of a police officer who was investigating organized crime.36 His assassins repeatedly pinged his cellular phone through a WASP to find him. This factors to a mass failure of governance, ethics, know-your-customer protocol implementation, and subscriber safety.37 Each of the MNOs concerned had been capable of escape censure by the Info Regulator as a result of the Protection of Personal Information Act (POPIA) was nonetheless in its grace interval.38 For its half, ICASA didn’t censure the MNOs or touch upon the problem. WASPs seem to have engaged in different types of unlawful conduct as effectively, together with widescale airtime theft and so-called clickjacking—charging customers for subscriber providers they by no means chosen.39 For the poor, this compounds affordability challenges.

The SIM swap—when fraudsters register an current telephone quantity to a brand new SIM card in order to intercept communications—is one other risk to individuals who use their cell units for transactions.40 Subscribers are despatched an SMS warning {that a} SIM swap on their account has been requested and that they should decide out inside a set variety of hours. However these messages are simply missed or neglected. Even when a subscriber does alert their cell operator, SIM swaps are troublesome to cease with out going to a supplier outlet. That is particularly troublesome for poor individuals who normally dwell a ways from stores and shouldn’t have transport. The banks are normally quicker to react and help by blocking the affected subscriber’s accounts. Nevertheless, if the subscriber has already been compromised, they rapidly discover themselves caught as each the financial institution and the MNO to cowl the buyer’s losses.

It’s incomprehensible that this long-standing situation has not already been addressed by subjecting SIM swaps to a double opt-in course of, with one step requiring biometric authentication. South Africa’s Regulation of Interception of Communications and Provision of Communication-Associated Info Act (RICA) presents one thing of a stumbling block.41 All MNOs are required by RICA to stick to an onerous paper-driven train earlier than onboarding a brand new shopper and issuing a SIM card. This ensures compliance however not buyer cybersecurity. A risk-based method can be extra adaptive to shopper safety, nevertheless it competes with compliance necessities and their vital administrative burden on suppliers. Not like MNOs in some African states, MNOs in South Africa haven’t launched biometric applied sciences alongside the RICA course of for SIM registration.42 The explanations for this are unclear—they could possibly be associated to constitutional considerations. Nonetheless, the business and ISACA ought to present an replace.

Given the widespread cell utilization for DFS, the shortage of accountability by MNOs and failure by regulators to sanction them is problematic.43 Martha van Niekerk and Nkgolodishe Phaladi make the purpose that the potential publicity to felony actions deters clients from transacting on-line.44 But ICASA has been persistently silent on shopper safety issues. The MNOs have leveraged the Info Regulator’s passive stance and, moreover, they’ve resisted working with an alternate physique for shopper complaints—specifically, the Client Items and Companies Ombudsman (CGSO). The CGSO reported {that a} staggering 24 p.c of all shopper complaints in 2021 associated to MNOs, however that “nearly all suppliers have declined to enroll with the ombudsman, as they argue that they’re already ruled by regulator ICASA.”45

The dearth of safety and regulation on this sector poses a safety threat to all customers. If the tepid telecommunications regulatory atmosphere continues, the size of this threat will solely enhance. MNOs have begun to compete with banks as the first suppliers of DFS in South Africa.46 The MNOs who’re approaching saturation with their subscriber bases have recognized monetary providers as a significant new income stream. They “have a number of benefits in probably tapping into the alternatives obtainable, together with the power to speedily deploy applied sciences and providers at a a lot quicker tempo than conventional monetary providers establishments.”47 MNOs are additionally using their bigger buyer bases by partnering with fintechs to supply a variety of latest merchandise through so-called tremendous apps (which mix providers into one interface).48 Banks could have extra regulatory help, however they’re slower to innovate.49

The federal government-commissioned overview of digital issues within the Nationwide Improvement Plan (NDP) acknowledges these failures within the telecommunications sector. Within the part titled “Digital Futures,” the report describes the state of affairs:

Weak political appointments to key establishments, coupled with a scarcity of management, have persistently plagued the Division of Communication, Division of Telecommunications and Postal Companies (DTPS), the Impartial Communications Authority of South Africa (ICASA) and the Common Service and Entry Company of South Africa (USAASA). USAASA which receives public funding along with vital levies through the MNOs has been criticised for misdirected tasks and irregular expenditure. These components all served to undermine the imaginative and prescient of the NDP for the sector because the cornerstone of an equitable and resilient digital economic system.50

The openness and skilled assessments within the overview are refreshing and maintain promise. The report proceeds so as to add a cautionary notice concerning safety: “To foster information justice, a framework ought to be instituted to forestall hurt and mitigate the dangers related to the fast growth of digital providers and enormous numbers of individuals coming on-line for the primary time.”51 Overwhelmingly, this cohort of latest on-line customers overlaps with the underbanked.

One constructive growth is the formation of the Communication Threat Info Centre (COMRiC) by cell operators in January 2022. Though particulars stay obscure, it’s obvious that COMRiC’s objective is to establish, mitigate, and stop widespread dangers within the business. This contains essential infrastructure safety and cybersecurity.52 The profitable rollout of COMRiC may redefine the cell safety panorama.

Digital Deprivation as a Driver of Cyber Insecurity

Understanding the context and on-line conduct of underbanked South African clients, along with how they entry DFS, is a essential step towards analyzing the doable cybersecurity dangers these customers face. South Africa is likely one of the most unequal nations on the planet, with a Gini coefficient—the statistical measure of earnings inequality—of 63 p.c. It’s usually described as two distinct worlds in a single nation.53 Excessive inequality yields some slightly distinctive challenges for cybersecurity dangers inside the monetary sector. Merely put, for the hundreds of thousands of South Africans who dwell in poverty, the phenomenon of so-called digital deprivation leads to cyber threat proliferation.54 Marta Kuc-Czarnecka defines digital deprivation as:

A socio-economic phenomenon describing the hole in each the entry and utilization of data and communication applied sciences (ICTs) amongst people, households or geographic areas. This idea has advanced over current years and is being at present thought of in three classes: binary Web entry (first-order digital divide), digital expertise (second-order digital divide), and because the outcomes of Web use (third-order digital divide).55

Inside the context of this security-focused dialogue, digital deprivation in South Africa is characterised by the next:

Decrease charges of digital literacy: Research have underscored the significance of digital and expertise literacy by way of private cyber threat mitigation. Marginalized populations are significantly focused by cyber criminals. SABRIC’s findings underscore the notion that criminals favor to take advantage of susceptible customers slightly than try and bypass a financial institution’s strong safety defenses.56 The low degree of monetary literacy in South Africa additional compounds this downside.

Suboptimal {hardware} platforms: Whereas function telephone utilization is way decrease than elsewhere in Africa, many customers personal older Apple or Android smartphones with legacy working programs for which working system and app safety patches are now not obtainable. That is compounded by the likelihood that DFS apps can also not run on these telephones. In such instances, customers will pivot to USSD providers that supply insecure SMS protocol interfaces.

Information deprivation: South Africa has a number of the highest information prices in Africa. For the nation’s poor, who primarily use pay as you go cellular phone entry, information prices much more. These customers make up 85 p.c of the information market.57 Known as the “poverty premium,”58 this manner of buying information has two punitive outcomes: the premium price of pay as you go information and the upper expense of low-volume information bundles.59 The excessive price of knowledge and the safety ramifications thereof can’t be overstated. The web impact of knowledge unaffordability is that low-income customers sacrifice cybersecurity hygiene after they prioritize information utilization. Which means that customers often decline data-intensive software program patch updates, use SMS to ship delicate data to others, and entry public Wi-Fi when obtainable to conduct delicate monetary transactions. Despite the fact that banks have zero-rated banking apps for information (in different phrases, carriers don’t cost for related information), customers nonetheless devour information to make the preliminary connection.60

Diminished entry to safety software program: Safety software program is, merely put, unaffordable to most South Africans. Basically, many individuals from all earnings teams fail to put in antivirus software program on their private units, primarily on account of a scarcity of safety consciousness. Nevertheless, for poorer folks, that is aggravated by the price of safety software program. Typically, an antivirus suite from a good safety vendor will price wherever between ZAR 800 (about $53) and ZAR 2,000 (about $132) yearly. Greater than 30 p.c of South Africa’s grownup inhabitants survives on the nation’s Primary Earnings Grant, which is just ZAR 350 (about $23) monthly. Suffice to say, only a few folks can be prepared to spend a major proportion of their total annual grant earnings on safety software program.

Diminished entry to technical help: The problem of accessing help is two-fold: each technical and human. Given the price of new units, low-income customers usually buy secondhand telephones. Technical issues most frequently happen on unsupported units. From a human interface perspective, accessing customer support help at both a monetary service supplier or MNO includes navigating name facilities and adequately figuring out and explaining the issue.61 That is usually troublesome for customers who might not be digitally or financially literate, significantly when doing so of their third or fourth language.

Digital deprivation in South Africa is compounded by sure governance and expertise challenges that pose cyber dangers for digital monetary inclusion. The significance of making a safe ecosystem that may permit the underbanked to completely embrace DFS is significant. By these providers, economically marginalized folks can transfer from a transactional monetary existence towards asset and funding development.62 Nevertheless, to profit from DFS, they require the safety to safeguard and develop what they begin with. There are nonetheless too many apparent and protracted dangers within the digital monetary ecosystem that place all clients in danger. These embrace:

One-time-password SMS protocol for fee verification: The SMS protocol, which is over thirty years outdated, is inherently insecure.63 Using one-time passwords through SMS remains to be extensively prevalent within the South African market. Such messages are simply intercepted by criminals—this will likely, actually, be a driver of SIM swaps. All DFS suppliers ought to purpose emigrate to digital authentication with two-factor authentication, ideally by way of biometrics. Voice biometrics are extensively used throughout Africa, on account of each consumer ease and the low rollout price for suppliers.64

USSD-based providers for DFS merchandise: Many new fintech merchandise give the consumer a selection between USSD interfaces or extra superior cell app interfaces.65 That is arguably to reinforce uptake in a market the place information deprivation is a persistent downside. USSD interfaces are, nonetheless, inherently insecure and place clients at far higher threat. The overarching issues stay South Africa’s sky-high information prices, delays in new spectrum allocation, and suboptimal mobile infrastructure in rural areas. These components are stifling innovation, safety, and entry.

Third-party dangers—the credit score bureaus: The excessive incidence of huge information breaches involving credit score bureaus over the previous two years holds the spectre of introducing endemic safety threats into your complete monetary ecosystem. It seems as if these entities are being focused for his or her weak data safety practices and the excessive volumes of delicate buyer information they maintain. The most recent such incident, the TransUnion Hack,66 has resulted in 54 million detailed South African monetary data being uncovered to extra threat. The credit score business is one other “self regulating67 entity however—given its breach file—the knowledge safety practices inside this business require the pressing consideration of each monetary actors and the related authorities.

The South African identification quantity. The official South African ID quantity is likely one of the most compromised government-based identifiers on the planet.68 A collection of huge breaches has launched the majority of all residents’ distinctive numbers onto the darkish internet. ID numbers however are nonetheless the necessary departure level for registering new shoppers and are demanded as the usual safety test by name facilities attending to buyer queries.69 The flexibility to triangulate an ID quantity, cellular phone quantity, and checking account quantity opens the door for cyber criminals. Considerably inexplicably, it’s nonetheless widespread follow for many monetary actors to make use of ID numbers because the password to unlock allegedly encrypted account or portfolio data despatched to clients through e-mail. Given the compromised nature of the ID quantity and the prevalence of e-mail interception in Africa, the implementation of digital id applied sciences and biometrics ought to be an pressing precedence.70 As a late adopter of such applied sciences, South Africa is well-placed to include classes discovered, together with constraints, from different markets.


As fintech development surges in Africa, South Africa has emerged as a hub for start-up growth.71 DFS present substantial alternatives for the underbanked to entry providers, construct credit score profiles, fund belongings, and make investments. On the identical time, although, new customers are prone to encounter greater digital threat as a result of penalties of digital deprivation and monetary literacy challenges. South Africa’s already excessive price of cyber crime rose sharply in 2020. Pressing measures are wanted to scale back impacts on the person in addition to adverse results on the nation’s economic system.72

These realities should be factored into product design, entry pathways, and after-sales help by DFS suppliers. A few of the key components that contribute to safety on this market are:

  • Consumer behaviors and contexts ought to be factored into the design and safety components of the event cycle.
  • Service supply interfaces and buyer processes ought to be persistently aligned with consumer behaviors and contexts.
  • Enhanced alignment between the monetary and communications sectors is required to shut identified and protracted dangers within the system.
  • Using digital id options and biometrics throughout the business will assist thwart cyber criminals by eliminating simple targets.
  • Phasing out SMS-based monetary providers and one-time passwords will additional assist cut back the assault floor.
  • MNOs maintain the important thing to shifting clients away from mobile interfaces to digital platforms and enabling them to transact safely. MNOs ought to be strongly inspired to decrease information prices, restructure pay as you go information premiums, and situation information rebates for cell working system and safety software program updates.

There are two vital systemic challenges on the nationwide degree that may show much less easy to deal with. The primary is nurturing cybersecurity consciousness and monetary literacy charges inside the inhabitants. This may require a horizontal method throughout authorities, training, and company entities. The second is the problem of affordability. For low-income households, entry to supported and safe cell units, information, and safety software program is hampered by South Africa’s growing financial decline and rising unemployment. Potential options to those affordability constraints and their far-reaching impacts on safety—in addition to their economically damaging penalties—would require a partnered nationwide method.

Finally, the safety challenges inherent within the proliferation of DFS in South Africa are maybe much less technical than they may seem. Somewhat, their genesis lies within the social and governance spheres. For DFS suppliers, digital safety aims should be conceived and applied inside the context of the individuals who will use their merchandise. For the authorities and regulators, it’s important to deal with governance and regulatory points to make sure that the susceptible section of the inhabitants who ought to be uplifted by digital monetary inclusion is just not additional left behind by undue cyber threat.

Concerning the Writer

Noëlle Van der Waag-Cowling is the Cyber Programme Lead on the Safety Institute for Governance and Management (SIGLA), Stellenbosch College. Her work cuts throughout each the private and non-private sectors and has a powerful give attention to governance, coverage, and geostrategic points in data safety. She teaches cyber warfare and low depth battle within the Division of Strategic Research and serves on the overview board of the Worldwide Journal of Cyber Warfare and Terrorism.


1 “Anti-Cash Laundering and Counter-Terrorist Financing Measures: South Africa Mutual Analysis Report,” Monetary Motion Job Pressure and Japanese and Southern African Anti-Cash Laundering Group, October 2021, p. 23, https://www.fatf-gafi.org/media/fatf/documents/reports/mer4/Mutual-Evaluation-Report-South-Africa.pdf.

2 “Web Crime Report 2020,” Federal Bureau of Investigation Web Crime Grievance Heart, p. 17, https://www.ic3.gov/Media/PDF/AnnualReport/2020_IC3Report.pdf.

3 “Nationwide Cybersecurity Coverage Framework,” South African Authorities, printed December 4, 2015, https://www.gov.za/documents/national-cybersecurity-policy-framework-4-dec-2015-0000.

4 “African Cyber Risk Evaluation Report,” Interpol, October 2021, p. 8.

5 Rob Bainbridge, “Reflections on FinTech Safety Management,” Medium, October 6, 2020, https://robbainbridge.medium.com/reflections-on-fintech-security-leadership-279ce0256804.

6 Digital deprivation is a multifaceted problem encompassing features equivalent to information poverty, cybersecurity consciousness, and outdated expertise and software program platforms.

7 “Fintech Scoping in South Africa,” Genesis Analytics, October 2019, p. 2.

8 “House,” Sabric, accessed April 5, 2022, https://www.sabric.co.za/.

9 Martha Gertruida van Niekerk and Nkgolodishe Hermit Phaladi, “Digital Monetary Companies: Prospects and Challenges,” Potchefstroom Digital Legislation Journal 24 (2021): 16, http://dx.doi.org/10.17159/1727-3781/2021/v24i0a10744.

10 “Anti-Cash Laundering and Counter-Terrorist Financing Measures,” Monetary Motion Job Pressure and Japanese and Southern African Anti-Cash Laundering Group, 23.

11 Quoting Dr. Brett van Niekerk, Durban College of Know-how, 2021: “The FBI’s Web Crime Grievance Centre (IC3, 2018; 2019; 2020; 2021) has South Africa ranked pretty persistently at about 11 to 13 by way of the variety of complaints obtained; nonetheless in 2020 this modified to sixth.”

12 Sarah Smit, “Enterprise Reacts: Sona Commitments Will Not Transfer the Dial – But,” Mail & Guardian, February 11, 2022, https://mg.co.za/business/2022-02-11-business-reacts-sona-commitments-will-not-move-the-dial-yet/.

13 Gareth Stokes, “SA’s SMMEs Face a Gradual Strangle as Crimson Tape Litters the Enterprise Atmosphere,” FA Information, October 15, 2021, https://www.fanews.co.za/article/talked-about-features/25/straight-talk/1146/sa-s-smmes-face-a-slow-strangle-as-red-tape-litters-the-business-environment/33119.

14 Palesa Shipalana, “Digitising Monetary Companies: A Instrument for Monetary Inclusion in South Africa?,” South African Institute of Worldwide Affairs Occasional Paper no. 301, September 30, 2019, 15.

15 “Anti-Cash Laundering and Counter-Terrorist Financing Measures,” Monetary Motion Job Pressure and Japanese and Southern African Anti-Cash Laundering Group, 43.

16 “The Nationwide Cost System Framework and Technique Imaginative and prescient 2025,” South African Reserve Financial institution, March 12, 2018, p. 3, https://www.resbank.co.za/en/home/publications/publication-detail-pages/media-releases/2018/8319.

17 “The Nationwide Cost System Framework and Technique Imaginative and prescient 2025,” South African Reserve Financial institution, p. 7.

18 “A Stokvel is a sort of credit score union during which a bunch of individuals enter into an settlement to contribute a set sum of money to a standard pool weekly, fortnightly or month-to-month. Universally, such a system is called a rotating financial savings and credit score affiliation (ROSCA), which is a bunch of people who agree to fulfill for an outlined interval so as to save collectively.” “About Stokvels,” Nationwide Stokvel Affiliation of South Africa, accessed April 20, 2021, https://nasasa.co.za/about-stokvels/.

19 Ryk van Niekerk, “EasyEquities has Disrupted the SA Funding Market since Inception,” MoneyWeb, February 20, 2022, https://www.moneyweb.co.za/moneyweb-podcasts/market-commentator-moneyweb-radio/easyequities-has-disrupted-the-sa-investment-market-since-inception/.

20 “Fintech Scoping in South Africa,” Genesis Analytics, p. 3.

21 Jorge Camarate and Chantal Maritz, “A Market With out Boundaries 2.0: Digital Disruption within the South African Banking Sector,” PricewaterhouseCoopers, 2019, p. 6.

22 Ibid.

23 Bainbridge, “FinTech Safety Management.”

24 “Fintech,” South African Reserve Financial institution, accessed April 26, 2022, https://www.resbank.co.za/en/home/quick-links/fintech.

25 Ibid.

26 “Monetary Intelligence Centre Act 38 of 2001,” South African Authorities, accessed April 26, 2022, https://www.gov.za/documents/financial-intelligence-centre-act.

27 “Shoprite Quietly Launches Cellular Banking to twenty Million Clients,” Tech Central, November 17, 2021, https://techcentral.co.za/shoprite-quietly-launches-mobile-banking-to-20-million-customers/204869/.

28 “House,” Impartial Communications Authority of South Africa, accessed April 26, 2022, https://www.icasa.org.za/.

29 Ewan Sutherland, “Information Should Fall – The Politics of Cellular Telecommunications Tariffs in South Africa,” (paper, South African Affiliation of Political Research fifteenth Biennial Convention, Rhodes College, August 26–18, 2021), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2154165.

30 Nationwide Planning Fee and Analysis ICT Africa, “Digital Futures: South Africa’s Digital Readiness for the 4th Industrial Revolution,” August 2020, p. 33, https://researchictafrica.net/wp/wp-content/uploads/2021/01/021220_Digital-Futures_SAs-Digital-Readiness-for-4IR_01.pdf.

31 Sutherland, “Information Should Fall.”

32 “Why This Kind of Fraud is Nonetheless so Frequent in South Africa After so Many Years,” Enterprise Tech, November 21, 2021, https://businesstech.co.za/news/business-opinion/539972/why-this-type-of-fraud-is-still-so-common-in-south-africa-after-so-many-years/.

33 “Fraud and Airtime Theft on Vodacom’s Community,” Tech Report, August 3, 2020, https://www.techreport.co.za/fraud-and-airtime-theft-on-vodacoms-network.

34 Noëlle Van der Waag-Cowling, Brett Van Niekerk, and Trishana Ramluckan, “Submission to the Name for Inputs: Report on the Provision of Navy and Safety Cyber Merchandise and Companies by ‘Cyber Mercenaries’ and Its Human Rights Affect,” 2020, p. 12.

35 Jeff Wicks and Kyle Cowan, “Concentrating on AGU Crew C,” Information 24, https://specialprojects.news24.com/zane-kilian-charl-kinnear-cellphone-tracking/index.html.

36 Ibid.

37 “Vodacom and MTN Can Face Authorized Motion over Kinnear Homicide,” My Broadband, October 22, 2020, https://mybroadband.co.za/news/cellular/372354-vodacom-and-mtn-can-face-legal-action-over-kinnear-murder.html.

38 Ibid.

39 “Mobile Looting in SA by ‘WASPS,’” African Wi-fi Communications, September 4, 2020, https://www.africanwirelesscomms.com/news-details?itemid=3359; Rudolph Muller, “Damning Proof About Mass Airtime Theft From Vodacom Subscribers,” My Broadband, August 30, 2020, https://mybroadband.co.za/news/cellular/365418-damning-evidence-about-mass-airtime-theft-from-vodacom-subscribers.html.

40 A change of the subscriber id module which is restricted to a cell phone quantity and account.

41 “Regulation of Interception of Communications and Provision of Communication-Associated Info Act 70 of 2002,” South African Authorities, accessed April 26, 2022, https://www.gov.za/documents/regulation-interception-communications-and-provision-communication-related-information–13.

42 Frank Hersey, “Digital ID in Africa This Week: Mammoth Biometric Registration Plan for Nigeria and Interpol within the Sahel,” Biometric Replace, September 26, 2019, https://www.id-day.org/post/digital-id-in-africa-this-week-mammoth-biometric-registration-plans-for-nigeria-and-interpol-in-the.

43 Sutherland, “Information Should Fall.”

44 Van Niekerk and Phaladi, “Digital Monetary Companies,” p. 15.

45 “The Greatest Cellular Community Complaints in South Africa,” Enterprise Tech, December 23, 2021, https://businesstech.co.za/news/telecommunications/533842/the-biggest-mobile-network-complaints-in-south-africa/.

46 Mudiwa Gavaza, “The Battle for Fintech Supremacy is On,” Enterprise Day, January 16, 2022, https://www.businesslive.co.za/bd/companies/telecoms-and-technology/2022-01-16-the-battle-for-fintech-supremacy-is-on/.

47 Natasha Odendaal, “SA Telcos Shifting Aggressively to Add Fintech Choices to Cellular Cash Base,” Engineering Information, September 17, 2021, https://www.engineeringnews.co.za/article/sa-telcos-moving-aggressively-to-add-fintech-offerings-to-mobile-money-base-2021-09-17.

48 “Tremendous-apps permit residents to mix purposes like pay, commerce, mobility and communication into one platform – as an alternative of juggling a number of apps.” Conrad Onyango, “One App to Rule Them All: The Rise of African Tremendous-Apps,” World Financial Discussion board, December 21, 2021, https://www.weforum.org/agenda/2021/12/africans-super-apps-make-life-easier/.

49 Gavaza, “The Battle for Fintech Supremacy.”

50 “Digital Futures,” Nationwide Planning Fee and Analysis ICT Africa, p. 33. The DTPS grew to become the Division of Communications and Digital Applied sciences. See their web site at https://nationalgovernment.co.za/units/view/428/department-of-communications-and-digital-technologies-dcdt.

51 Ibid.

52 Christopher Tredger, “No Query, SA Operators Will Work Collectively Says Newly Shaped Anti-Crime Org COMRiC,” ITWeb Africa, January 25, 2022, https://itweb.africa/content/j5alrvQad9LvpYQk.

53 “The World Financial institution in South Africa,” World Financial institution, accessed April 26, 2022, https://www.worldbank.org/en/country/southafrica/overview#1.

54 Marta Kuc-Czarnecka, “COVID-19 and Digital Deprivation in Poland,” Oeconomia Copernicana, Institute of Financial Analysis 11, no. 3 (September 2020), 415–431.

55 Ibid.

56 “Digital Banking Crime Statistics,” Sabric, accessed April 26, 2022, https://www.sabric.co.za/media-and-news/press-releases/digital-banking-crime-statistics/.

57 Alison Gillwald, “Digital Equality: South Africa Nonetheless Has a Lengthy Option to Go,” Tech Central, March 7, 2020, https://techcentral.co.za/digital-equality-south-africa-still-has-a-long-way-to-go/175421/.

58 Ibid.

59 Ibid.

60 Alex Comninos, David Johnson, and Alison Gillwald, “Has South Africa’s COVID Alert Contact Tracing App Been Zero-Rated?,” Analysis ICT Africa, September 25, 2020, https://researchictafrica.net/2020/09/25/has-south-africas-covid-alert-app-been-zero-rated/.

61 “Complaints Towards SA Telecom Corporations are Beginning to Stack up,” Enterprise Tech, October 26, 2018, https://businesstech.co.za/news/telecommunications/279405/complaints-against-sa-telecom-companies-are-starting-to-stack-up/.

62 “Draft Monetary Inclusion Coverage: Media Assertion,” Nationwide Treasury of South Africa, October 28, 2019, http://www.treasury.gov.za/comm_media/press/2020/20201028%20Media%20Statement%20-%20Updated%20Financial%20Inclusion%20Policy.pdf.

63 Abraham Morake, Lucas T. Khoza, and Tebogo Bokaba, “Biometric Know-how in Banking Establishments: The Clients’ Views,” South African Journal of Info Administration 23, no. 1 (Fall 2021), https://sajim.co.za/index.php/sajim/article/view/1407/2100.

64 “Biometrics in Digital Monetary Companies: An Overview,” FSD Africa, August 2017, p. 18.

65 “SA Retailer Quietly Launches Financial institution Account to 20M Clients,” MoneyWeb, November 17, 2021, https://www.moneyweb.co.za/news/companies-and-deals/sa-retailer-quietly-launches-bank-account-to-20m-customers/.

66 Ciaran Ryan, “Deadline Passes for R220m Extortion Demand in TransUnion Cyber Assault,” MoneyWeb, March 28, 2022, https://www.moneyweb.co.za/news/south-africa/deadline-passes-for-r220m-extortion-demand-in-transunion-cyber-attack/.

67 “Welcome to CBA,” Credit score Bureau Affiliation, accessed April 26, 2022, https://www.cba.co.za/#:~:text=All%20credit%20bureaus%20are%20regulated%20by%20the%20National,2005%20and%20the%20Regulations%20and%20amendments%20pertaining%20thereto.

68 “Timeline of Cyber Incidents Involving Monetary Establishments,” Carnegie Endowment for Worldwide Peace, accessed April 27, 2022, https://carnegieendowment.org/specialprojects/protectingfinancialstability/timeline#click-hide.

69 Van Niekerk and Phaladi, “Digital Monetary Companies,” p. 19.

70 “African Cyberthreat Evaluation Report,” Interpol.

71 Charu Sudan Kasturi, “World Funding Cash is Flooding in to Africa’s Fintechs,” Al Jazeera, November 19, 2021, https://www.aljazeera.com/economy/2021/11/19/global-investment-money-is-flooding-into-africas-fintechs.

72 “Web Crime Report 2020,” Federal Bureau of Investigation Web Crime Grievance Heart, p. 17.


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