More money inclusion in Africa

Research by Statista indicates that Africa is home to more mobile money users than any other region, where of the 346 million mobile money accounts active last year, 188 million came from the continent. Furthermore, according to The Mobile Economy report released by the GSMA, Sub-Sahara Africa generated $490 billion from mobile money transactions in 2020. This highlights the importance of the technology to drive financial inclusion amongst the almost two billion people who are unbanked globally, 60% of whom live in Africa.

This financial inclusivity fuels many of the Sustainable Development Goals (SDGs) of the United Nations. These SDGs are central to empowering people to improve the environment they find themselves in. An example of this is the promotion of sustained economic growth, higher levels of productivity, and technology innovation.

It is in this space of technology innovation where mobile money comes in. It has proven as an effective enabler to accelerate the financial inclusion of the millions of people who simply do not have access to traditional banking facilities.

By the end of 2025, 615 million people across Sub-Sahara Africa will subscribe to some form of mobile service, the equivalent to half of the region’s population. In most parts of Africa, people have struggled to open and operate traditional banking accounts. Fintech providers have stepped in and delivered mobile money platforms. This has resulted in digital financial services providers – mostly mobile operators led – having access to citizens that not even governments have details on. But there is a darker side to this potential, one that creates significant security concerns.

Unlike traditional financial institutions like banks, Fintechs and mobile operators are inadequately prepared to prevent fraud or money laundering activities.

Internal control measures must be put in place to prevent failures around governance, IT, and continuous monitoring. It is therefore important that stakeholders within the mobile money value chain implement preventative measures to mitigate the expected surge of impending fraud risks.

This is something a leading Fintech Operator like MTN has taken to heart.

The MTN fintech journey is based on addressing the problem of financial inclusion for Africa to improve the quality of life for all its citizens. In the past, only banks delivered financial services enabled by technology. Now, there are more technology-first providers like telcos that are offering next-level financial services to solve the problem of financial inclusion. The MTN Mobile Money solution stores funds in a secure electronic account linked to an MTN mobile phone number.

When launched in 2007, MTN Mobile Money allowed customers to create accounts to pay, collect, and transfer funds using their mobile phone and the carrier’s network. Today, the services have been expanded to include numerous others such as micro-credit facilities. The next evolution will be to offer fully financial services such as investment and insurance.

And it is because of this increasingly connected financial ecosystem on a mobile device, that risk hypothesis and controls need to be put in place. It starts at an organisational level from the mobile operator where there must be agreement between the IT and business on how data will be kept secure. All roles and responsibilities need to be defined with accountability needing to be assumed by all parties.

To further strengthen the mobile money environment, operators can leverage the data and analytics they have access to and implement real-time dashboards for profiling customers and understanding the correlations between usage and spending. The operator can also implement alarms to be alerted when there is suspicious behaviour happening on an account. These internal control measures can assist in further improving the technology and continuously monitor for any irregularities.

As mobile money evolves, it is imperative for the operator to evaluate the sophistication of frauds perpetrated by change and to address evolving attack trends.

All players in the mobile money supply chain must be committed to countering fraud and money laundering. Conducting regular reviews of emerging risks will be crucial to mitigating the potential for compromise.

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