Benedict Hamilton, Managing Director of Kroll’s regional Business and Cyber Investigations team discusses the big shift in Kenya becoming a digital economy, describing how embedding security at the centre of digital evolution is key to growth.
 East Africa might appear an unlikely region to be pioneering the digital economy but its credentials are well established. The use of mobile phones as a payment platform is widespread. M-Pesa started in Kenya over 10 years ago; it is now used by a very large proportion of the population for everything from paying for petrol to running payroll for farms and factories. The rise of mobile in East Africa and in particular Kenya has been rapid, and is credited by many as being the driver for their sustained economic growth. However with such a fast technological evolution there is a need for increased security.In 2005 there were only 2.5 million deposit accounts in Kenya1 and less than one fifth of the population had access to financial services. Fast forward eight years and by 2014 there were 26.2 million registered mobile money accounts with three out of four Kenyan adults having access to financial services.Most of this was made possible by mobile money initiatives and regulations allowing an infrastructure of agents via both banks and telecommunications firms, to provide widespread access to financial services for the Kenyan population. Part of mobile money’s attraction is that it is safer than carrying or storing large amounts of cash, and it is a simple bolt-on to pre-existing commercial relationships. It is a clever answer to the much debated question of ‘how to bank the unbanked’, but financial services and government leaders have greater ambition than this. It is not uncommon, for example, to hear senior banking and Government figures talking about a cashless economy. Bankers also see the internet and mobile phone networks as a way to reduce investment in bricks and mortar, improve margins, and extend coverage. It is not just Kenya that is embracing this vision though. Successful roll out of these initiatives is driven from the very top of government. Kenya, Rwanda, Uganda and South Sudan are all part of the Northern Corridor Technology Alliance (NCTA)2 – a regional sector alliance formed to champion the implementation of key ICT projects within the region. Pioneering new banking systems and electronic tax collection has its challenges however. These countries have to discover what works, and what does not, for the first time. Perhaps most challenging are new vulnerabilities to cyber crime and vandalism, but this is exactly why companies like Kroll want to be part of this great experiment. There is an opportunity for us to learn from working together both in terms of cyber security and in terms of investigative methodologies. All the indicators point to the further success and expansion of digital services through mobile and ecommerce. Mobile telecoms services in Kenya grew in revenue by 33 percent last year compared to the previous year3. While other African countries have suffered from the depression in commodity prices, Kenya has been posting 5 percent GDP growth consistently… using its digitalisation to drive growth. East Africa is finding its own development path, and it seems to be working. The focus and drive of technology initiatives in the region, initiatives which have leapfrogged a number of legacy infrastructures in more developed economies may place East Africa as a technology front runner for years to come – especially if the technology innovation is matched by the same level of security improvements. _____________________ |
Email: bhamilton@kroll.com
Website: www.kroll.com
