In the 2023 Budget Report, it was revealed that there has been a marked increase in cyber-attacks against financial institutions, the implications of which include business disruption, lost productivity, legal repercussions, and lasting financial consequences.
“To mitigate information technology (IT) and cyber risks to companies and consumers, the Financial Sector Conduct Authority (FSCA) and the Prudential Authority will soon finalise joint standards aimed at ensuring better IT governance and risk management,” the report states.
This has been welcomed by Lethabo Mokone, founder and CEO of MakwaIT Technologies, who says that with 59% of executives citing that security breaches are one of the key challenges they face with their current networks, this is where adoption of more sophisticated networks, like 5G, could be beneficial.
“Now is the opportune time for investment in 5G, given that the licensing process for the successful bidders of the 2022 spectrum auction is concluding soon and the next spectrum auction will be taking place later this year.”
Mokone highlights that compared to previous generations, 5G offers new features such as Security Edge Protection Proxy (SEPP) functionality and International Mobile Subscriber Identity (IMSI) encryption, which can enhance network security.
“However, the need for additional measures such as next-generation firewalls and multilevel security architecture, to ensure protection from 5G cyber-attacks. Additionally, solutions with automated threat mechanisms should be deployed across key points in the network to enable swift detection and rapid resolution of security-related incidents.”
According to a report by Accenture, the financial services industry has earmarked significant investment for 5G, both in the short- and long term, and will be allocating an additional 7% or more of ICT spend on 5G-enabled solutions. “I believe that this will increase as more high-demand spectrum is auctioned and licensed by the Independent Communications Authority of South Africa (ICASA),” shares Mokone.
He points out that, in addition to increasing security, 5G adoption will also enable the sector to take advantage of Fourth Industrial Revolution technologies and services such as IoT (Internet of Things), real-time analytics, artificial intelligence and augmented/virtual reality.
“For example, it has been purported by the 5G and Financial Services report that 5G and edge computing will lead to more data storage and processing in the cloud, allowing for much more sophisticated AI (Artificial Intelligence) and analytics.
“At the same time, more spectrum will mean that the country’s 5G rollout will extend to rural, remote and underserved communities in the country, putting financial services within their reach, thereby increasing the sector’s customer base,” adds Mokone.
He concludes by saying, “While an Interpol report has found that South Africa leads the continent in cyber threats and ranks third globally, the joint standards to be developed by the FSCA and the Prudential Authority will go a long way towards changing the status quo, as will the adoption of more secure and sophisticated networks. By unlocking the benefits of the spectrum auction, the country’s financial services sector can accelerate digital transformation and scale innovation.”