Concern about the privacy of data collected by financial technology (Fintech ) firms in Kenya is growing, especially after the recent data breach scandal involving Cambridge Analytica and Facebook. With 6 million people of the country’s adult population borrowing through digital means according to a report, The Digital Credit Revolution in Kenya’; any misuse of the data they collect could have a significant effect on the consumers.
Speaking about the regulation of the Fintech sector at the Euromoney East Africa Conference, Central Bank Of Kenya (CBK) Deputy Governor Sheila M’Mbijjewe said, “I don’t think CBK and the banking sector fear new technology, but we must address the risks, she said. Calling for a balance between Fintech regulations to manage risks vs encouraging innovation.
Once installed, Fintech apps, for instance, Tala, will often ask for permission to access your location, messages from financial transactions, to know your place of work etc. This data is used to calculate your creditworthiness, which is a great innovation and promotes financial inclusion especially for people without formal sources of income. However, when data this sensitive, is used for other purposes than the one intended, user privacy is violated.
“There has to be market discipline. Practitioners need to embody privacy,” said CBK Governor Patrick Njoroge, adding that global data breaches should inspire caution for all Fintech sector players.
It is just recently that former Cambridge Analytica employee turned whistle-blower Christopher Wylie revealed evidence that the British political consulting firm was using private data collected on Facebook for in campaigns for political targeting. A scandal which has Kenya, as part of the countries affected by the data breach.
Data that would otherwise be deemed harmless by a user as he/she submits to a platform like Facebook could easily be misused in the hands of the wrong person, the same could be said about data collected by the increasingly popular Fintech firms.
“The entrepreneurs need to embody and understand the concern of the regulator. The key element should be customer centricity. It is said that laws often come after damage,” said CBK Governor Patrick Njoroge