Are you a digital native or a digital immigrant? A digital native is a person that grows up in the digital age, rather than acquiring familiarity with digital systems as an adult. These are ‘native speakers’ of the digital language of computers, the internet and social media.
The corollary is that a digital immigrant is one who takes up digital technology along the way. With technology moving so fast, it is hard for digital immigrants to keep up with the demands and challenges of the digital era. The same goes for businesses: some are new kids on the block and were launched on the platform of digital technology, while others were in existence before the advent of digitisation, and are now going through ‘digital transformation’.
As the word suggests, transformation means that these organisations will change from one way of doing business to a completely different way, a process that comes with opportunities as well as challenges.
While businesses are facing many technology related challenges as they embrace the new way of doing business, one such sector that has become most evidently challenged is the financial sector.Kenya has become a celebrated African silicon valley. What with M-Pesa innovation, mobile banking by leading banks such as Equity, KCB, Co-op Bank, and the high level penetration and adoption of mobile telephony and digital banking.
Across the African continent, organisations offering banking, lending, insurance, trading and payments services have invested heavily in technology to increase levels of financial inclusion, deliver convenient and excellent products and services to their customers and generate income while cutting costs. However, there has been a price to pay.
According to the Global Economic Crime and Fraud Survey 2018 by PwC, 49 pecent of financial service organisations globally said they were victims of fraud and economic crime in 2017 up from 36 percent in 2016. This indicates that the prevalence of fraud is growing across the globe and across sectors.
These include cases of consumer fraud, asset misappropriation, cybercrime, business misconduct and money laundering. Closer home, fraud is highest on the continent than in any other region in the world. A whopping 62 percent of the African businesses polled said they were victims of fraud in 2017.
That trend holds true in Kenya, where the prevalence of fraud in the financial sector rose by 23 percent between 2016 and 2017. Kenya has the highest prevalence rate in East Africa at 75 percent.
The digital journey is only just getting started, and technology has proved to be a double edged sword. Local banks have borne the brunt of cybercrime, with the attacks becoming more and more complex.
Today, attacks can happen in a matter of minutes or seconds, and with devastating consequences. These attacks may be perpetrated by customers, staff, third party partners or hackers. As cybercrime and fraud gets more sophisticated, banks will have to deploy resources into detection, authentication of fraud as well as learning and predicting human behaviour.
CAROL EUNICE, Communication consultant.