With a population of 45.9 million, Uganda has experienced significant growth in the adoption of digital financial services. Approximately 20 million people now engage in mobile money transactions nationwide, a clear indication of the growing shift toward financial technology. This adoption has also prompted banks to expand their agent networks to tap into the unbanked and underbanked population.
According to the Uganda Communications Commission (UCC) Q3 2024 market report, mobile money transactions increased by 120 million between July and September, bringing the total to 1.96 billion. This surge reflects the population’s demand for convenience and accessibility, even amidst challenges like low smartphone penetration. With improved financial and digital literacy, increased penetration of affordable smartphones, and better internet access, many more Ugandans will be empowered to embrace financial technology.
However, concerns about the safety of digital platforms persist, with some individuals preferring the perceived security of traditional banking, where one is willing to walk into a bank and endure long lines rather than engage a bank agent or use their smartphones to carry out transactions, despite its inconvenience.
In 2024, Uganda saw a notable rise in financial technology fraud cases, with methods such as identity theft, phishing (email scams), fishing (phone call scams), malware attacks, ATM scams, SIM swaps, and SMS scams being commonly used.
The increase in fraud prompted industry stakeholders to collaborate, including banks like Stanbic and Centenary, regulators such as the Bank of Uganda and UCC, and government, private, and non-governmental organizations. Together, they launched educational campaigns on cybersecurity, using both online and offline platforms to inform the public about safeguarding PINs, verifying transaction authenticity, and protecting personal information.
Even with the aggressive methods used by the stakeholders, this year 2025, will only see an increase in cybercriminals. As institutions continually develop advanced technology to protect their online customers, fraudsters or cybercriminals are likely to adopt more advanced technologies, to create highly targeted phishing scams and breach systems aimed at both financial institutions and their customers. Therefore, stakeholders must double their efforts to safeguard digital financial services.
To secure accounts and transactions, financial institutions and telecom companies must prioritize customer data protection through multi-factor authentication, end-to-end encryption, and biometric verification. Regular vulnerability assessments and penetration testing are critical to identify and address potential security gaps. Institutional teams must be trained to identify and prevent fraud.
Additionally, public awareness campaigns targeting rural communities can help foster trust in digital financial services. Institutions should go beyond mass media and conduct on-ground regional training sessions to educate communities about cybersecurity. Regulatory bodies must enforce stringent rules and impose severe penalties on entities that facilitate or enable fraud. Proactive oversight is essential to curbing financial technology fraud.
Stakeholders need to work together and create partnerships, small or large, to address this issue. For instance, Pebuu has partnered with different banks to manage and supervise bank agents using technology-driven field management solutions. By deploying its supervisors across all regions, Pebuu ensures last-mile financial inclusion while addressing ways bank agents can protect themselves from fraudulent activities.
Through real-time monitoring, Pebuu minimizes operational inefficiencies and manages security risks at the tail end of transaction chains, especially in remote areas. The firm also conducts on-ground training for agents, supervisors, and merchants, equipping them with skills to identify and prevent fraud while fostering financial literacy.
As Uganda embraces digital transformation, addressing financial technology fraud must remain a top priority for all stakeholders. The landscape of financial technology fraud is expected to evolve further. Uganda may face more cross–border financial fraud, which will require international collaborations. Collaboration with stakeholders across sectors and borders is essential to building a secure and resilient digital ecosystem.
By investing in advanced cybercrime security technology such as artificial intelligence fraud detection systems that allow real-time identification and prevention, dependence on biometric verification methods like fingerprint and facial recognition, strengthening regulatory frameworks to address the emerging fraud techniques, and enhancing fraud educational initiatives for the public to protect itself, we can safeguard individuals and businesses while promoting trust in the financial technology sector.
Article by Immaculate Namanda, the Corporate Communications Manager Pebuu Africa
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