Africa’s banking sector is in the midst of a major transformation. Over the past decade, the continent has emerged as an adopter of mobile money and digital financial services, providing millions with access to formal financial systems for the first time.
As digital adoption accelerates, two critical factors are increasingly defining the sector’s trajectory: digital literacy and cybersecurity.
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Africa’s Digital Banking Boom
Limited physical banking infrastructure once kept millions of Africans outside the financial system. Today, mobile money and fintech solutions have filled that gap, enabling people to bank with nothing more than a mobile phone. Sub-Saharan Africa now accounts for nearly 70% of the world’s mobile money users, with more than 400 million active accounts, according to the GSMA.
Platforms such as M-PESA in Kenya, Airtel Money in Uganda, and MTN Mobile Money in Ghana have become household names, allowing people to send money, pay bills, take out microloans, and even invest with ease. These innovations have dramatically boosted financial inclusion and fueled economic activity. Similarly, during the 23rd edition of the Connected Banking Summit in Ethiopia, Mihret Teshome reiterated that digitization and inclusion are true game changers for Ethiopia’s banking future.
That being said, the speed of adoption has outpaced safeguards. Many new users lack the digital skills to navigate these platforms safely, while financial institutions themselves face relentless cyber threats.
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Digital Literacy: The Cornerstone of Inclusion
Digital literacy—the ability to understand, use, and manage digital tools effectively—is fundamental to the success of Africa’s banking revolution. Mobile penetration may be high, but the ability to use digital services varies widely across regions, genders, and generations.
During Telecom Review Africa’s recent webinar on ‘The Role of Fintech in Advancing Africa,’ Munya Chiura, Strategic Advisor Specializing in Emerging Markets, Fintech, and Expansion Across Africa, noted that “mobile wallets have become the first bank account for many,” marking their entry into the formal financial system.
Without proper knowledge, however, they are vulnerable to fraud, identity theft, and simple mistakes that can cost them their savings, as reiterated by Sylvain Morlière, Consulting Director Fintech, Inclusion and Governmental projects, Sofrecom. Afrobarometer research also shows that only 28% of Africans use the internet regularly and digital literacy rates are lowest among rural communities, older populations, and women.
Key challenges include:
- Education Gaps: Limited literacy and numeracy skills make it difficult to navigate financial apps and understand digital terms.
- Language Barriers: Many platforms operate in English, French, or Portuguese, excluding users who only speak local languages.
- Generational Divide: While younger people adapt quickly, older generations often struggle with unfamiliar technologies.
- Trust and Confidence: Low awareness fuels skepticism and reluctance to engage with digital banking services.
To address this,Kenya has launched nationwide campaigns on mobile banking safety, while Nigeria’s central bank has embedded digital financial education into its literacy strategy. Private sector and development partners, such as the Mastercard Foundation and UNDP, are also funding large-scale digital skills initiatives. Beyond improving banking access, these programs empower communities to participate more broadly in the digital economy.
Related: Nigeria Strengthens Digital Education through NITDA-UBEC Collaboration
Cybersecurity: A Rising Threat
If digital literacy is the foundation, cybersecurity is the fortress protecting Africa’s financial ecosystem. Unfortunately, this fortress is under constant attack. Cybercrime is estimated to cost the continent more than USD 4 billion every year, according to the African Union, with banks and fintech platforms among the hardest-hit sectors. Criminals exploit weak IT systems, inconsistent regulations, and unsuspecting users to carry out fraud, data theft, and ransomware attacks.
The most pressing challenges include:
- Mobile Money Scams: SIM swaps, fake SMS alerts, and phishing are used to trick customers into revealing personal data or authorizing transfers.
- Regulatory Gaps: Not all countries have strong cybersecurity frameworks, making it difficult to coordinate responses across borders.
- Limited Investment: Smaller banks and startups often prioritize growth over investing in strong cybersecurity measures.
- Cross-Border Threats: As mobile banking expands regionally, cybercriminals take advantage of differences in laws and enforcement.
- Talent Shortages: Africa lacks enough trained cybersecurity professionals to match the scale and sophistication of emerging threats.
To secure the continent, the African Union’s Malabo Convention has provided a framework for cybersecurity and data protection, though progress on ratification remains uneven. At the national level, Nigeria strengthened its cyber defenses through the Cybercrimes (Prohibition, Prevention, etc.) (Amendment) Act 2024, while South Africa enacted the Cybercrimes Act No. 19 of 2020 and introduced the Cybersecurity Bill of 2024 to protect critical infrastructure, combat cybercrime, and enhance data security.
Banks and telecom operators are also stepping up. Many are investing in AI-driven fraud detection, multi-factor authentication (MFA), and real-time monitoring systems. Collaboration between banks and telecom operators is especially critical since many fraud cases exploit weaknesses in mobile networks.
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The Interplay Between Literacy and Security
Digital literacy and cybersecurity are deeply intertwined. Without literacy, users are more likely to fall victim to scams; without robust security, even well-informed users remain at risk. Together, these vulnerabilities threaten consumer trust, a fragile but essential ingredient for continued digital banking growth.
To sustain this growth, a multi-stakeholder approach is essential:
- Governments must strengthen cybersecurity laws and ensure they are enforced.
- Banks and fintechs need to balance expansion with robust security investment.
- Telecom operators should work hand-in-hand with financial institutions to curb SIM-based fraud.
- Civil society and development partners must continue driving digital literacy programs that empower users, especially women and rural communities.
Ultimately, the future of Africa’s digital banking revolution will not be defined by technology alone; it will depend on whether people can use that technology confidently and securely. By closing digital literacy gaps and fortifying cybersecurity systems, Africa can transform its banking sector into a resilient engine of inclusive growth.
