It is not the first time that hackers have embarrassed the government of Kenya. A few years ago, several government websites were hacked. That said, these are the cases that we know of; cases that make it to the media. What goes unreported may be much more!
In the private sector, a recent news report suggested Kenyan banks had lost in excess of Ksh 600 million in two months. An earlier report in July 2014 estimated annual bank losses, due to poor information protection, to be in excess of Ksh 5 billion. Previously, reports put the figure in the range of Ksh 1.5 – 2.5 billion. Some say these are conservative figures as a lot goes unreported. Nonetheless, these are staggering losses and someone (usually the customer) gets to pay for.
Kenya has embraced the use of technology in its affairs. We have seen the phenomenal use of cell phones and with it services that ride on the technology infrastructure. M-pesa, which has revolutionized the mobile money space, is perhaps the most successful of services riding on the technology infrastructure. The country has also seen a rise in the number of incubation hubs for business suggesting there is no shortage of talent. Indeed, many young people aspire to make that next “killer app” that would revolutionize how we do things and enrich them in the process.
As we embrace technology, it is important that we realize that nothing comes without risk. To realize the full potential of any invention, one must weigh the gains and risks associated to realizing those gains. Managing risks appropriately assures realization of optimal gains. At the core of technology risks is information security. Without appropriate protection of information and the underlying infrastructure, an entity can pay dearly with respect to its investment.
Unmitigated risks obviously lead to losses, which can be material as in the cases of banks mentioned above. It could also be reputational harm, leading to loss of confidence and trust. For example, messages from KDF and its spokesperson may lose their full weight if the source cannot be trusted. In financial services, customers may opt for alternative means of transacting if they lose confidence in the banking system.
As we invest and embrace technology, we need to invest commensurately in associated risk management. In this case, we need to invest in information security. As an information security practitioner of many years, I have observed the following in my day to day interaction with those in the same business in Kenya:
Breaches are not taken seriously
In general, our people don't take seriously breaches of the kind illustrated above. They seem to treat such happenings as if they are “small irritants” that do not impact their businesses! Yet the reputational loss of a government institution whose systems have been compromised can be far-reaching. Indeed, we may not know the extent of the damage caused by the hackers in the case of twitter hacks of KDF and its spokesperson. What is clear is that any future updates from those two twitter accounts will be taken with a pinch of salt till such time as confidence is restored! For the private sector (and banks especially) they could simply underwrite these losses by passing them to the consumer. A small marginal variation in interest rates can recoup losses of the magnitude mentioned! That sector, as financial services become more competitive information protection may offer competitive advantage.
Insufficient information security skills base to tackle challenges
As a country we need to invest in the space of technology management, and especially technology risk management, information security being one of these. Starting with policy to education and certification programmes, the country needs to put in concerted efforts to develop needed skills in this area in order to tackle/forestall looming problems. Inevitably, material and reputational losses will be substantially higher than they are today. With such skills tasked with the challenges we face today, we would design, implement and continually monitor and respond to incidents based on best practices. (Note: there are no guarantees that one won't be hacked but one can minimize such damage (reputation, loss/modification of information, etc.) with timely, appropriate response.
Lack of leadership
The country needs leadership in the technology risk space, both in the public and private sectors. If there exists any, it is not felt. Such leadership would be evangelistic in nature pushing for appreciation of technology risks and how to deal with them. Such awareness would raise concern and thus assure allocation of commensurate resources (people, financing, technology, etc.) to confront the problem. My experience in North America tells me that (in Kenya and Africa, in general) this area is very much underfunded and whatever little funding comes through would be spent on easy to acquire things like CCTV...some installed without requisite processes, skills, etc. and not assuring maximum return on investment.
Security by obscurity
Many technology managers (and many others in management) treat information security with obscurity. They keep things obscure and profess security. I once was in a discussion with a senior official in government and heard things such as: we cannot disclose what measures we have taken to protect government information because the same can be used by you people to target us! He failed to appreciate that you can still be hacked with use of known reconnaissance approaches. If we are serious (especially in government) to address this matter, let’s get some of our top talent, give them security clearance and challenge them to build robust systems that assure security.
A friend recently gave the story of a manager (a protégé of top management) that kept his job, protected by his benefactors but who many knew wasn't performing. This manager could continually avoid bringing in talent that might help him build robust systems fearing that such talent may also expose his failings! Only when the organization was hit and the top management embarrassed with loss (material, reputational) did they hire an external consultant whose report exposed the manager's fraud that he had perpetuated for many years! ... long story short, he was given a soft landing, and slowly eased out of the organization.
Managers and decision-makers must get the right talent, skills and experience for the job if indeed they are committed to delivering in their mandate. The matter of awarding jobs and/or contracts based on connections rather than merit does come back to bite over time and can be costly to the organization.
Poor/weak compliance regime
The country has an extremely weak compliance regime. In government, the Auditor General’s main focus is on financial audit. In its most mature stage, an audit would assess comprehensively what would hamper the attainment of set objectives of (say) government departments and other state entities. … the office of Auditor General has hardly the capacity to deliver such a comprehensive audit, and especially as it relates to technology, its specification, acquisition, deployment, management, and disposal and assessing associated risks accordingly.
In the private sector, take the example of banks. The regulator (the Central Bank of Kenya) routinely seeks compliance as a condition for being licensed and has a fairly standard compliance regime for the purpose. The fact is that the depth of compliance assessment and verification with respect to technology is largely wanting! It is often the case that financial institutions file required documents whose content is hardly tested for verification of compliance. The country has plenty of work to do in this space.
Let’s remember that technology, its embrace and use presents risks. Key among these are information security risks which need to be understood and mitigated in order to minimize damage. As a nation, we need to invest in the knowledge, expertise and experience in this area. Only then can we avoid inevitable losses be they material or reputational. Who knows whether proper management of this space can lead to a drop (however marginal) in the interest rate?
By Dr Matunda Nyanchama
The author firstname.lastname@example.org is Director and Managing Consultant at Agano Consulting Inc., an ICT services firm with offices in Canada and Kenya.
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