FSD UgandaFostering data protection, and cybersecurity in Uganda to advance data usage
***This is a brief from the 2024 annual report
The world has undergone a digital shift over the past two decades, creating new opportunities for economic and social development, according to the 2024 United Nations Digital Economy Report. The number of internet users surged from 1 billion in 2005 to 5.4 billion in 2023, according to the International Telecommunication Union (ITU). In Uganda, the FinScope 2023 Survey shows that mobile phone ownership and internet access increased significantly reaching 72 percent and 26 percent in 2023, up from 52 percent and 10 percent in 2018, respectively. Additionally, the Uganda Communications Commission (UCC) 2024 report noted that the country has 18.2 million smartphones and 26.7 million feature phones in circulation.
Technology has immense potential to lower costs, speed up processes, improve security and transparency, and provide tailored financial services to underserved populations at scale. While the embrace of technology in Uganda is encouraging, there is still room for growth. To create scalable, sustainable, and inclusive financial solutions, a well-functioning digital economy is essential. This involves integrating technology with financial systems to ensure broad access to services and foster economic growth. Achieving this requires building strong digital infrastructure, establishing supportive policies and regulations, and creating an inclusive, competitive environment that empowers both individuals and businesses to participate in the formal economy.
In line with this, under its Digital Economy pillar, FSD Uganda’s work in policy, legal, and regulatory reforms focuses on fostering a supportive regulatory environment for financial inclusion. By establishing the right policies and ensuring their effective implementation, we encourage innovation, safeguard consumer protection, and promote healthy competition within the financial sector.
The emerging Mobile Money sector
The growth of technology usage in Uganda is evident, with the growth of mobile money usage. Mobile money refers to financial transactions and services conducted through mobile phones.
Mobile money subscribers have grown dramatically, from 0.6 million in 2009 (the year of its introduction) to 30.4 million active users out of 45.6 million registered users in 2024, according to the Uganda Communications Commission (UCC). The sector has expanded beyond traditional financial institutions and telecom companies to include fintechs. As of 2024, 212 fintechs were registered with the Fintech Association of Uganda (FITSPA), with over 100 of them providing payment services. Mobile money services are now used by 66 percent of Ugandans, compared to just 13 percent who use commercial banks according to the FinScope 2023 Survey.
As a result, mobile money transactions in Uganda accounted for 94 percent of GDP in 2021—one of the highest penetration rates in Africa, according to the International Monetary Fund’s report on the learnings from Uganda’s mobile money ecosystem. The value of Uganda’s mobile money market is estimated at $133 billion in 2024 and is projected to reach $1,150 billion by 2033, according to UCC.
Big data in the finance sector
The evolution of mobile money has revolutionised financial inclusion, particularly for last-mile populations. This is by providing widespread access to formal financial services via mobile phones. Unlike traditional brick-and-mortar bank branches, mobile money services offer greater proximity to underserved and unserved communities, helping to close financial inclusion gaps—especially across gender and age groups.
Through regular mobile money transactions, users build financial footprints that financial service providers can use to assess creditworthiness. This enables access to credit for individuals previously excluded from the formal financial system. Beyond inclusion, mobile money is now a transformative platform across entire economies—facilitating digital payments in commerce, healthcare, agriculture, and more.
This rapid expansion of digital financial services provides Uganda with an invaluable opportunity to access large datasets of financial transactions, mobile money activity, and utility payments— collectively referred to as “big data.” Big data plays a central role in shaping the digital economy and, when effectively harnessed, offers opportunities for innovation, optimises resource allocation, and strengthens governance. Unlike traditional data, which is typically small, structured, and static, big data consists of vast, complex datasets that are too large for traditional data-processing software.
Over the last decade, big data has transformed financial services, especially in developing countries. Financial service providers now use big data to gain valuable insights, improve customer experiences, optimise operations, and make informed decisions—driving both innovation and profitability.
Fostering a secure digital economy: Strengthening data protection and privacy for sustainable growth
As we embrace the transformative potential of data, safeguarding its security and privacy becomes equally important. FSD Uganda recognises the need to balance data utilisation for innovation with the responsibility of complying with data protection regulations. In response to the growing role of data in Uganda’s financial ecosystem, we encourage financial service providers to adhere to the Data Protection and Privacy Act of 2019 and its accompanying regulations.
To support enhanced compliance, FSD Uganda has partnered with the Personal Data Protection Office (PDPO) in developing the Data Protection and Privacy Toolkit. This toolkit is designed to assist organisations, particularly fintechs, MSMEs, and Tier IV institutions, who face challenges in managing data responsibly. While it targets smaller enterprises, it is also useful for larger organisations. The toolkit provides practical guidance on navigating the complexities of data protection in an evolving digital landscape.
By outlining how data controllers, processors, and subjects can meet their rights and obligations under the law, the toolkit ensures that data is handled responsibly and securely. This fosters trust and encourages broader participation in the digital economy. Additionally, a Training of Trainers (ToT) program has been launched to develop a pool of skilled professionals who can promote and enforce data protection principles across organisations.
To further strengthen the toolkit’s impact, we are supporting the design and development of a curriculum for a Data Protection Academy under the PDPO. The curriculum covers essential topics, including the data protection regulatory environment, professional ethics, data privacy governance, management, and cybersecurity fundamentals for data protection. Its goal is to equip participants with the skills needed to become proficient practitioners in data protection and privacy, while also ensuring compliance with the provisions of the Data Protection and Privacy Law.
The program targets privacy professionals, data stewards, and cybersecurity experts, enhancing their abilities to enforce compliance with data protection laws, thus contributing to a safer digital environment.
These initiatives aim to lower compliance costs for smaller businesses and ensure the widespread adoption of secure, privacy-conscious data practices across various sectors. By promoting best practices in data protection, the toolkit and curriculum help build a secure and transparent data ecosystem, which will increase customer trust in sharing data with financial institutions and enrich the big data available to enhance financial products and services.
Strengthening cybersecurity and building trust in Uganda’s digital financial ecosystem to unlock the potential of big data
As digital financial services and data collection continue to expand, the risks associated with cybercrime grow. In 2023, global damages from cybercrime were estimated at $8 trillion, with projections to reach $10.5 trillion annually by 2025. This trend highlights the increasing vulnerability of financial systems worldwide, including in Uganda. According to the Uganda Police Crime Report 2024, 446 cybercrime cases were processed in 2024, resulting in losses amounting to UGX 72.1 billion (about USD 20 M). Although this represents a slight decline from 523 cases in 2023, the threat of cyberattacks remains significant. A backlog of 887 unresolved cases highlights the persistent and growing nature of this risk. This is especially concerning for individuals at the “last mile” of financial inclusion, who often lack adequate digital security awareness or protections.
Impact of cybersecurity threats on financial inclusion
Cybersecurity threats erode trust in digital financial systems and discourage individuals from sharing personal financial data, thus limiting their participation in digital services. Furthermore, the high operational costs of securing these services are often passed on to consumers through higher transaction fees, making digital financial services more expensive to use.
Recognising the strategic importance of cybersecurity for the growth and resilience of the financial sector, FSD Uganda has adopted a collaborative approach to strengthen the cybersecurity posture of Uganda’s financial ecosystem. This strategy emphasises shared infrastructure, governance, and accountability, fostering a unified response to cyber threats across the sector.
To support the financial sector in enhancing its capacity to prevent and address cyber threats, FSD Uganda is collaborating on the development of a comprehensive fraud management framework. A key part of this framework is the establishment of a Cyber Security Operations Centre (C-SOC), a shared platform that enables financial institutions to collectively address cybersecurity threats, report incidents, and share intelligence. Through the Uganda Bankers Association, the C-SOC serves as a centralised hub for monitoring and responding to cyber risks, which significantly strengthens the sector’s ability to protect digital assets.
This has led to the formation of the Anti- Fraud Consortium which brings together key stakeholders, including the Bank of Uganda, Tier IV institutions, the Capital Markets Authority, and the Financial Intelligence Authority. This collaborative body works to develop coordinated strategies for tackling fraud and cybercrime across the sector.
Efforts are also underway to expand the reach of the C-SOC to Tier IV institutions, such as SACCOs and microfinance institutions, through a platform upgrade. This will enhance their ability to identify and address fraud, thereby extending the benefits of secure digital services to smaller financial providers.
