The Capital Markets Authority (CMA) approved the initiative, which will be integrated into Safaricom’s M-PESA platform, offering users seamless access to investment opportunities.  

The Ziidi Money Market Fund, developed in partnership with Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited, is an innovative product built to provide accessible and diversified investment options. 

It aligns with Kenya’s financial inclusion goal which targets retail investors, particularly the unbanked and underbanked populations, through mobile-based services.  

Unlike traditional banking products, money market funds like Ziidi channel deposits into low-risk investments such as government securities and Treasury bills, offering savers higher returns compared to conventional bank accounts. 

CMA Chief Executive Wyckliffe Shamiah noted that the fund would empower investors while broadening Safaricom’s presence in Kenya’s capital markets.  

The new fund builds on Safaricom’s success with its first money market fund, Mali, launched in 2019 in partnership with Genghis Capital. By November 2024, Mali’s assets under management had grown to KES 3 billion, driven by mobile-enabled investment solutions in Kenya.  

Ziidi aims to tap into the country’s growing retail investment market, spurred by the widespread adoption of smartphones. Kenya has over 35 million active smartphones, compared to 30 million feature phones, making digital investment products increasingly viable.  

The fund is expected to attract a wide range of users, leveraging M-PESA’s extensive reach. M-PESA, which earned KES 77.22 billion in service revenue in the first half of 2024, remains a priority of Safaricom’s financial services strategy. 

In embedding Ziidi within the M-PESA ecosystem, Safaricom seeks to diversify its revenue streams overcoming challenges in its traditional voice, data, and SMS segments.  

While specific details on Ziidi’s investment limits and fees are yet to be disclosed, Safaricom’s earlier product, Mali, allowed users to invest from as little as KES 100, with capped daily contributions.

Withdrawals were instant to M-PESA wallets, and fees included fund manager and trustee charges, as well as a withholding tax on earned interest.  

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• Data breaches, attacks on critical infrastructure or physical assets and increased ransomware attacks keep cyber concerns at #1 with 43% of responses.
• Macroeconomic developments is second with 26% of responses as inflation remains one of the most difficult risks to manage this year.
• Businesses need to implement proactive risk management strategies to safeguard their operations.

The financial services sector is facing a growing threat from Cyber incidents, according to the Allianz Risk Barometer.

The report highlights that cyber incidents have emerged as the primary concern for financial institutions in 2024, with 43% of respondents ranking it as a significant risk.

This alarming trend is further exacerbated by the recent surge in ransomware attacks, which has seen insurance claims activity increase by over 50% compared to 2022.

The Allianz Risk Barometer, an annual survey conducted by Allianz Commercial, gathered insights from industry experts and executives across the financial services sector and other industries.

• The survey revealed that cyber incidents are followed closely by Macroeconomic developments and Changes in legislation and regulation, both ranking at 26%. Business interruption and Natural catastrophes also pose significant risks, with 22% of respondents expressing concern about each.

Hackers are increasingly targeting IT and physical supply chains, launching mass cyber-attacks, and finding new ways to extort money from businesses.

As a result, early detection and response capabilities and tools are becoming increasingly crucial. Investment in detection backed by artificial intelligence is expected to enhance incident identification.

Without effective early detection tools, companies may experience longer unplanned downtime, increased costs, and a greater impact on customers, revenue, and reputation.

“Cyber criminals are exploring ways to use new technologies such as generative artificial intelligence (AI) to automate and accelerate attacks, creating more effective malware and phishing. The growing number of incidents caused by poor cyber security, in mobile devices in particular, a shortage of millions of cyber security professionals, and the threat facing smaller companies because of their reliance on IT outsourcing are also expected to drive cyber activity in 2024, “explains Santho Mohapeloa, Cyber Insurance Expert, Allianz Commercial.

In addition to cyber incidents, financial services respondents also highlighted macroeconomic developments factors such as inflation, which is one of the most difficult risks to manage in 2024.

The impact of inflation can have long-term consequences, with investments taking a while to regain value even after the economy seemingly recovers. Furthermore, inflation triggers higher interest rates, which increases net interest income but slows down loan demand and brings a higher default risk.

Compliance ranks as one of the biggest challenges for financial services companies, with legislation and regulation constantly evolving around digitization, climate change, and environmental, social, and governance (ESG) issues.

The compliance burden for financial institutions has significantly increased over the past decade, with regulatory enforcement intensifying.

• To navigate these challenges, financial institutions must improve the effectiveness and efficiency of their compliance activities and make wise use of data and technology.

Business interruption poses significant risks to the financial services industry, including disruptions to operations, loss of revenue, reputational damage, and regulatory compliance challenges.

Cyber incidents and natural catastrophes are the top two causes of business interruption feared most by companies, followed by fire and machinery/equipment breakdown or failure.

To mitigate these risks, companies must focus on improving business continuity management, identifying supply chain bottlenecks, and developing alternative suppliers.

Natural catastrophes present significant risks to the financial services industry, including physical damage to infrastructure, disruption of operations, increased insurance claims, and potential liquidity challenges. The financial implications of natural disasters were underscored by the USD 82 billion in insured losses globally in 2021.

To effectively manage these risks, financial institutions must prioritize robust risk modeling, diversification strategies, and disaster preparedness measures.

The Allianz Risk Barometer serves as a valuable tool for financial services companies to identify and address the most pressing risks they face.

By understanding these risks and implementing proactive risk management strategies, companies can safeguard their operations, protect their customers, and maintain financial stability in an increasingly volatile global business environment.

The post Cyber Incidents Top Concern for Financial Services Sector in 2024 – Allianz Risk Barometer Reveals appeared first on Tech | Business | Economy.