Security startups and Africa’s mobile boom: big problems, huge opportunities

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The bigger the problem, the greater the opportunity. With the increasing popularity of smartphone usage paired with greater internet penetration in Africa, mobile security startups have gradually started to join the cause against cyber threats — something that the continent is very vulnerable to.

One of the most inspirational and well-known entrepreneurial stories in South Africa (and beyond) is probably that of Mark Shuttleworth. Thawte, as you most likely know, is Shuttleworth’s first digital certificate and internet security startup. The company was eventually sold to VeriSign for more than US$500-million. As we have seen lately, Thawte isn’t the only security startup born and bred in South Africa.

With our society being more engaged with online world in terms of banking, communicating and simply storing information, people are finding more and more ways of attacking or accessing personal and company data. It’s an endless Tom and Jerry scenario between cyber threats and cyber security.

Most of the African continent is known for the overabundance of feature phones. This is of course changing. As both positive economic indicators and broadband penetration increase, so does the smartphone and mobile PC markets.

Most notably, companies such as Samsung and Huawei are more and more quenching the continent’s appetite for smartphones. Recent reports state that smartphone shipments to Africa were up 21.5% in this year’s third quarter. About 18% of the continent’s population carries smartphones today. Smartphones are also known for being more vulnerable to cyber threats.

Research from Informa Telecoms and Media suggests that, in Nigeria alone, the number of smartphone users will increase from 5.6-million at the end of 2012 to 35-million by 2017.

While these indicators are all good and well, they bring inevitable risks. While Kenya, South Africa, Nigeria and Egypt have shown the greatest growth rates in terms of internet penetration, they also reflected the greatest rise in malware and cyber crime incidents.

In an article, Symantec notes that while there is plenty of developer talent, the African continent generally lacks the required formal infrastructure:

The problems are fuelled by a lack of legislation — South Africa has anti-cyber-crime laws and Kenya is working on them, but many other countries in the region have nothing – and by a skills problem in IT systems security. Africa has plenty of raw talent for IT and coding, but a shortage of legal ways for young people to exploit it.

The report rightfully notes, however, that both South Africa and Kenya have over the past few years been making great strides in improving legislation.

Africa — a continent that’s increasingly moving into the online space — is of course facing similar issues as the rest of the world does but the lack of formal infrastructure is posing different obstacles to other regions.

More specifically, while Kenya is popularly known for having embraced mobile banking, a recent report noted that when it comes to online shopping, the biggest obstacle is lack of online security.

Emerging markets, and specifically African, are seeing ecommerce startups popping up in every possible crevice with an internet connection. The main obstacle startups face is that of security concerns or the general stigma thereof.

Check Point Software Technologies notes in an interview with IT News Africa that the so-called bring your own device (BYOD) trend is creating more issues for companies as sensitive information could be more easily exploited. Sale Manager Doros Hadjizenonos says that in South Africa mobile security incidents tallied up to over six figures for 42% of businesses, including 16% who put the cost at over R5.1-million.

Mobile innovation allows for some interesting payment solutions but is also heavily reliant on cloud-based technology. Like most things in life, cloud computing has its pros and cons. While it may open up vulnerabilities on the internet it also presents an opportunity for innovative security. These trends are of course accompanied by some bold startups.

As Entersket’s website reads, the company uses the power of digital certificate technology with the convenience of mobile phones to provide organizations and their customers or employees with full protection from account takeover fraud.

As you’d probably guess, there are a bunch of other startups that have joined the cause in strengthening cyber security. FraudCracker for instance offers an online technology solution to help companies identify and combat fraud. Then there’s FireID Security for example. The 6-year old company with the vision of providing security through mobile applications by authenticating end users to any online or mobile application.

IMPI (International Mobile Protection Initiative), provides anti-malware protection for Android devices along with an integrated data management suite that simplifies the secure backup and storage of device data.

Synaq has been around for quite some time and has been named one of the Top 20 Tech Startups in Africa by Forbes last year. The company provides messaging and security products built around open source solutions.

The more small businesses, users or customers and even governments ignore this problem, the more vulnerable emerging markets will become. If that’s the case, could we see the 21st century’s own Thawte-like startup appear anytime soon?

Image: carlosluz via Flickr.

Jacques Coetzee: Staff Reporter


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