'Fintech industry faces similar challenges as the tech industry in terms of security hygiene,' says Tim Theuri

Leadership style combines a bottom-up approach
Tim Theuri is a cybersecurity and risk expert with extensive experience in the financial and telecommunications sectors. The combination of his cybersecurity expertise and his in-depth knowledge of risk management enables him to develop robust strategies that mitigate potential threats. Read on to discover his extensive experience in fintech and learn ways to stay apprised of the most recent technological developments in the industry. 

The fintech industry faces similar challenges as the technology industry in terms of basic security hygiene. However, the risk for any financial institution is significantly higher because customers trust them with their money and sensitive information.

Media 7: Can you share the highlights of your career path leading up to your current role as the Executive Head of Cybersecurity at M-PESA Africa?
Tim Theuri:
My interest in technology and cybersecurity began at a pretty early age when I was in primary school because I was always curious about technology. I was fascinated by the latest tech things. My passion for technology continued to grow during my undergraduate studies, where my interests in technology were refined, and I gained a sense of direction. For my undergraduate degree, I pursued software engineering as I always wanted to become a programmer, developer, or coder. However, coincidentally, I also completed my CPA (Certified Public Accountant) to have a balanced understanding of business and making money. After completing both of those degrees, I was fortunate enough to be selected for recruitment by Deloitte, where I began my career as a financial auditor before specializing in technology risk and data consulting. Following that, I transitioned to Safaricom, where I took on various roles, including audit, risk management, and technology. My big break came when I joined the M-PESA Africa family. As the Executive Head of Security, my role perfectly aligned with my interests in managing technology-related risks and contributing to financial inclusion for the African continent.

M7: Based on your experience as a systems and risk consultant, what do you think are the common IT risks faced by the fintech industry? How can those risks be mitigated?
TT:
I think the first part, unfortunately, is the truth. Some common misconceptions are related to busy systems, security hygiene risks, and a perception that cybersecurity requires something complicated or advanced due to the exposure we have to security breaches, hackings, and advanced persistent threats affecting large companies. However, in my experience, most cases reveal a lack of basic security practices. Simple measures, such as regularly changing passwords, ensuring system activity is monitoring, regularly reviewing users and system logs, and keeping systems up-to-date with patches, play a crucial role in cybersecurity. The fintech industry faces similar challenges as the technology industry in terms of basic security hygiene. However, the risk for any financial institution is significantly higher because customers trust them with their money and sensitive information. Failure to apply basic security practices can lead to breaches and erode that trust. Therefore, maintaining standard security hygiene is essential for both fintech and any technology industry to mitigate risks effectively.

One of the critical aspects of cybersecurity is knowing the asset inventory, as you cannot protect what you are unaware of. It's crucial to establish a schedule for patching systems and applying security updates, as well as having well-defined user governance processes and security policies in place. Raising awareness about these policies among all users helps reduce risks to a manageable level, though it's impossible to completely eliminate them. The adage holds that the only system that is 100% secure is one that is entirely shut down.

M7: M-PESA Africa processes a massive volume of transactions daily. How do you ensure the security and integrity of these transactions, and what measures do you take to protect customer data and privacy?
TT:
One of our most basic processes for ensuring the integrity of customer transactions is the customer PIN—a simple four-digit number providing end-to-end security. This PIN is known only to the customers themselves. At M-PESA, we don't have access to the customer's PIN, which ensures that their transactions remain protected and can only be initiated by the customers. However, we acknowledge that there's a possibility of customers being compromised, as we hear reports of such incidents. To address this, we run an awareness program for our customers, encouraging them to safeguard their PIN and never share it with anyone. This approach ensures that all transactions are genuinely initiated from the customer's handset.
Moreover, we prioritize security along the entire connection, from the phone to the M-PESA systems. This connection is end-to-end encrypted, safeguarding against any potential eavesdropping or tampering. Even the SMS initiated from the M-PESA site is encrypted using SSL and validated within our core M-PESA systems. Our system architecture is designed with defense in depth, similar to the layered security measures you might have at home with gates and multiple locks. We implement parametric security, security at the phone level, in the campus system, as well as in our applications and databases hosting customer data. Security is a fundamental aspect considered from the architecture stage and not added as an afterthought or bolted on later. This approach ensures that customer data and services are fully protected at all times.

M7: In your experience as an ISO lead internal auditor, what industry-specific challenges did you face when ensuring compliance with ISO standards? How are such challenges generally addressed?
TT:
ISO standards are a set of practices that guide any company, industry, or organization in applying international best practices for their respective industries. From my experience in both Safaricom and M-PESA, I've encountered two significant challenges. The first challenge is having the specific knowledge required to apply these general standards and practices to the fintech level. It demands a dual skill set: in-depth knowledge of the financial industry and technical expertise. Additionally, understanding the actual ISO standards and their application on a general basis is crucial. Safaricom has gained considerable experience with ISO standards and holds the most certifications among Eastern Central African companies. Leveraging this experience, we have developed a tribe of ISO qualified auditors and implementers who are well-versed in ISO requirements and can implement these processes across the entire organization at all levels.
The goal is to ensure that ISO knowledge is not limited to a single individual or team. Instead, the entire organization, including champions and leads, acts as a knowledgeable source in ISO processes. This widespread understanding enables everyone to contribute to the successful implementation of ISO practices in Safaricom and M-PESA.


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In today's globally connected world, cyber risks apply without discrimination to both new and old markets, whether they are within Africa or from outside the continent. Our approach to cybersecurity acknowledges this reality.

M7: According to you, what are the most major cybersecurity threats faced by the financial and telecommunication industries today?
TT: The biggest threats faced by both industries today are also opportunities. Ever since COVID and the shift to work from home, the envelope of staff work has expanded. We now see remote work as a state of mind rather than being confined to a physical location. This seamless work from home setup has its benefits, but it also exposes us to increased cyber risks. Previously, cyber threats were primarily focused on staff while they were at their workplaces, but now, working from home has created a new set of risks. Home environments may lack the typical perimeter of security measures found in offices, making them vulnerable to cyber threats.
We've had instances where staff accidentally downloaded malware while working from home, which could have been prevented if they were at the office. As a result, we had to rethink our approach to cyber protection and endpoint security to cover employees regardless of where they work. This led us to apply security measures to safeguard data wherever it flows. Cloud security plays a significant role in ensuring that whether employees work from home or office, they are equally protected without compromising security, portability, or their ability to work flexibly.

M7: How do entities in the fintech space across different countries navigate compliance requirements and ensure that cybersecurity practices align with relevant regulations in each market?
TT: Market regulations are crucial, but unfortunately, they are not yet standardized across Africa. While we have seen improvements in collaboration among market regulators, there is still a long way to go in establishing common continental or pan-African regulations governing the fintech space. The impact of this situation is that in each market we operate in, we prioritize establishing positive and mutual relationships with the respective regulators. This approach allows us to understand their objectives and compliance requirements while also educating them about our goals. It's a partnership where both parties work together to protect the users of our system. We view it positively as a collaborative effort.

This partnership enables us to not only meet the regulators' requirements but also strive to exceed them. We don't set our benchmarks based on each regulator's demands; instead, we aim to meet the strictest regulatory requirements across all markets. Whether it's about cybersecurity or resiliency, we ensure that our actions align with all the necessary requirements, regardless of the specific market. Our success lies in maintaining a strong partnership model with regulators and consistently striving to surpass even the strictest regulatory demands in the various markets we serve.

M7: How do you stay updated with the latest trends, emerging threats, and best practices in cybersecurity? How does that knowledge apply to financial and telecommunication industries?
TT:
I struggle to stay updated on my site, but I ensure I stay informed through two main avenues. Firstly, I am an active member of both the Isaka and ICQ communities due to my CISSP certification. My passion for cybersecurity leads me to research and share insights on the subject. Attending conferences and engaging with cybersecurity communities helps me stay up-to-date on the latest threats in the field.
Secondly, from a group perspective, M-PESA Africa operates as a subsidiary of Safaricom and Vodacom, both being subsidiaries of the Vodafone Group. Within this network, we have a cybersecurity community where best practices from the Vodafone Group are shared and applied across different markets. This community exchange benefits both from the telecommunications and financial aspects of our operations, helping us develop and implement effective strategies against emerging threats. For instance, when it comes to areas like artificial intelligence and blockchain, specific conferences are attended to explore ways to leverage these technologies within our fintech and telecom industries. This proactive approach helps us keep abreast of new threats and adapt our practices accordingly.

M7: M-PESA Africa is expanding into new markets, including Ethiopia. How do you adapt your cybersecurity strategy and practices to accommodate the unique challenges and regulatory requirements of each new market?
TT:
At M-PESA Africa, our vision and mission revolve around applying comprehensive cybersecurity controls for all markets, regardless of whether they are new or well-established. We do not differentiate when it comes to cybersecurity; all markets receive equal attention. Our commitment is to ensure that all controls are uniformly applied across our vast estate, without any discrimination or differentiation.
To achieve this goal, we take into account the requirements of all regulators, implementing even the strictest regulatory demands consistently across all markets. This approach allows us to maintain a consistent and level playing field for cybersecurity controls, reducing our overall cybersecurity risk to the minimum possible. In today's globally connected world, cyber risks apply without discrimination to both new and old markets, whether they are within Africa or from outside the continent. Our approach to cybersecurity acknowledges this reality and ensures that all markets are equally protected from potential threats.

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The dynamic nature of cybersecurity in the technology industry applies to enterprises involved in content creation and those seeking to build a brand image and connect with customers.

M7: We would like to know your opinions on thought leadership. According to you, how can thought leadership shape a company's brand identity?
TT:
M-PESA Africa, being the largest and most significant mobile money service, has established its brand based on creative and innovative ideas. Our focus on developing leadership and prioritizing customer service with new and innovative products has strongly connected us with our customers. As a result, we are the largest mobile money service in all the markets where M-PESA operates. This sustainable growth enables us to achieve our mission of financial inclusion and empowering our customers. Moreover, our strong brand presence has helped us connect with customers globally, even in markets where we don't have a physical footprint. This means that if we were to expand to new markets, we would start on a positive note with a well-recognized mobile brand, M-PESA.

M7: Considering the dynamic nature of cybersecurity and the need to drive impactful information technology changes in enterprises, what strategies do you recommend for content creation and advertising to effectively communicate an organization's expertise and insights to your target audience?
TT:
The dynamic nature of cybersecurity in the technology industry applies to enterprises involved in content creation and those seeking to build a brand image and connect with customers. In summary, they must understand their target audience and fulfill their needs to become successful companies. Passionately understanding and serving the customer is what differentiates leaders in this field. While there are numerous strategies that can be adopted, the key lies in building a staff culture that is dedicated to serving the customer with passion. This principle holds true for any enterprise, regardless of whether they are involved in cybersecurity technology or not.

M7: How do you foresee the future of cybersecurity in the fintech industry as it continues to embrace and adopt new innovations like digital wallets, blockchain, and open banking? What are the key cybersecurity considerations that will arise with these advancements, and how do you envision addressing them to ensure the security and trustworthiness of financial services in the evolving fintech landscape?
TT:
Combining two of my passions, cyber security, and blockchain security, I have given numerous talks on how these fields can be combined. From the fintech industry perspective, let me start with blockchain. As we all know, blockchain originated from a cybersecurity perspective, with Bitcoin being the first successful blockchain product. Over the past 12 years, the fintech industry has witnessed the continuous evolution and experimentation with blockchain technology. We keep a close eye on these developments and explore how to leverage them securely, including innovations like open banking and trustless security.
Artificial intelligence is another aspect that has gained significant attention recently. However, as customers understand and utilize these technologies, they become intrinsic and essential, moving beyond just hype. As leaders in the fintech industry, we must embed these technologies and advancements to provide value to our customers. Regarding cyber security considerations, we consistently update ourselves on evolving cyber risks. Before rolling out any product to customers, we conduct a thorough security review to ensure it is secure from the customer side to the system side. We strive to eliminate any vulnerabilities or potential malicious uses. We are one of the first companies to have a public bug bounty program in collaboration with our partner, HackerOne. We engage white-hat hackers on the Internet, providing them access to some areas of our system. If they identify any vulnerabilities, we conduct a paid bug bounty and promptly address and fix those issues. Cyber security is deeply ingrained into our approach to new technologies and advancements.

ABOUT M-PESA AFRICA

M-PESA Africa's financial innovations expand clients' options. Our platform, Africa's largest fintech, connects 50 million clients, 600,000 agents, 5 million businesses, and 59,000 developers to execute over 70 million transactions everyday. Kenya, Tanzania, Mozambique, DRC, Lesotho, Ghana, Egypt, and soon Ethiopia are our markets. The M-PESA Super App allows businesses and organizations to create digital mini-app stores to satisfy consumers' daily needs and facilitate their digital lives.

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H.I.G. Capital Completes Acquisition of CHA Consulting

H.I.G | January 23, 2024

H.I.G. Capital (“H.I.G.”), a global alternative investment firm with $60 billion of capital under management, is pleased to announce that one of its affiliates has completed the acquisition of CHA Consulting, Inc. (“CHA” or the “Company”), a leading full-service engineering, design, consulting, and program management firm providing a range of technology-enabled services to public, private, and institutional clients. CHA’s existing management team, led by President Jim Stephenson, will continue to lead the Company and remain shareholders in the business. Terms of the transaction were not disclosed. Founded in 1952 and headquartered in Albany, New York, CHA operates under three main sectors: infrastructure, power & manufacturing, and commercial & institutional. The Company serves clients across diversified end-markets including government, manufacturing, transportation, utility, water resources, commercial, and education. Through a combination of experienced and high-quality engineers, end-market expertise, and diverse capabilities, CHA provides industry-leading service to its blue-chip customer base. Jim Stephenson, President & CEO of CHA Consulting and Holdings, Inc., commented, “H.I.G. brings tremendous financial and operational resources with a great track record supporting companies and delivering value. We are confident this partnership will further position CHA for continued growth and will provide opportunities to better support our clients and the markets we serve.” “We are excited to partner with Jim and his exceptional management team. CHA provides critical engineering services through its talented team and is well-positioned for continued growth, capitalizing on accelerating investments in the end markets they serve across the United States and Canada. We look forward to supporting the team’s growth strategy and strategically broadening its operational scope across North America, both organically and through additional add-on acquisitions,” added Matt Hankins, Managing Director at H.I.G. Capital. Houlihan Lokey, Inc. served as lead financial advisor with support from AEC Advisors, and Simpson Thatcher & Bartlett LLP served as legal counsel for CHA. Harris Williams LLC served as financial advisor, and Ropes & Gray LLP served as legal counsel to H.I.G. About CHA Consulting CHA Consulting, Inc. is an innovative, full-service engineering, design, consulting, and program management firm providing a wide range of technology-enhanced services to public, private, and institutional clients. They are focused on delivering sustainable, integrated solutions to the world's most challenging infrastructure projects across utilities, transportation, water, and other critical commercial and industrial end-markets. CHA was ranked 69th largest engineering firm in the U.S. in 2023 by ENR, with approximately 1,800 employees and 50 offices throughout the U.S. and Canada. About H.I.G. Capital H.I.G. Capital is a leading global alternative investment firm with $60 billion of capital under management.* Based in Miami, and with offices in Atlanta, Boston, Chicago, Dallas, Los Angeles, New York, and San Francisco in the United States, as well as international affiliate offices in Hamburg, London, Luxembourg, Madrid, Milan, Paris, Bogotá, Rio de Janeiro, São Paulo, and Dubai, H.I.G. specializes in providing both debt and equity capital to mid-sized companies, utilizing a flexible and operationally focused/ value-added approach H.I.G.’s equity funds invest in management buyouts, recapitalizations, and corporate carve-outs of both profitable as well as underperforming manufacturing and service businesses. H.I.G.’s debt funds invest in senior, unitranche, and junior debt financing to companies across the size spectrum, both on a primary (direct origination) basis, as well as in the secondary markets. H.I.G. also manages a publicly traded BDC, WhiteHorse Finance. H.I.G.’s real estate funds invest in value-added properties, which can benefit from improved asset management practices. H.I.G. Infrastructure focuses on making value-add and core plus investments in the infrastructure sector. Since its founding in 1993, H.I.G. has invested in and managed more than 400 companies worldwide. The firm’s current portfolio includes more than 100 companies with combined sales in excess of $53 billion.

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Payments

ServiceNow announces five-year strategic alliance with Visa to transform payment services

ServiceNow | January 25, 2024

ServiceNow the leading digital workflow company making the world work better for everyone, announced a five-year strategic alliance with Visa, a world leader in digital payments, to transform payment services. The initial phase includes the launch of ServiceNow Disputes Management, Built with Visa—a single, connected disputes resolution solution for issuers. Managing disputes currently involves multiple systems and teams, and many financial institutions often use siloed solutions that are not fully integrated with one another. This disconnected approach creates complexity, delays crediting and resolving disputes, can create potential losses, and ultimately, impacts the customer experience. ServiceNow Disputes Management, Built with Visa is a streamlined solution that blends the best of ServiceNow’s AI-first platform and the company’s Financial Services Operations solution with Visa’s deep technology investments. Each year, Visa helps prevent $30 billion in fraud for consumers and small businesses using cutting edge technology, including tokenization and AI, deployed throughout the entire payments ecosystem, including disputes management. “At the heart of our alliance is a commitment to build industry-leading products that help financial institutions boost employee productivity, create great customer experiences, and drive business growth,” said John Ball, senior vice president and general manager, customer and industry workflows, ServiceNow. “By making Visa’s services available through ServiceNow’s intelligent, AI-first platform, we’re powering innovation and setting a new standard in the payments industry.” “Solving customer pain points is core to our business at Visa, and collaborating with an industry leader like ServiceNow will allow us to help issuer partners resolve disputes more efficiently,” said Vanessa Colella, global head of innovation and digital partnerships, Visa. “ServiceNow and Visa look forward to offering clients the latest technology solutions, so they can focus on delivering an excellent experience for their customers.” ServiceNow Disputes Management, Built with Visa will unite the entire dispute management process – from the first indication that a charge is questionable to early resolution, investigation, and final resolution. It includes a single experience for solving disputes so that employees can have high quality engagements with cardholders, as well as dashboards, automation, alerts, and the ability to audit all transactions. Two standout features enhance its efficiency: a modern, user-friendly low code platform that allows financial institutions to make swift updates to their disputes management process, and generative AI-powered experiences that improve customer intake and agent investigation. The solution also incorporates ongoing changes to disputes rules and applies industry best practices for processes, workflows, and staying ahead of fraud. “Banks should prioritize their CX efforts around the drivers that most influence customer loyalty. For example, resolving problems and issues quickly remains one of the most important drivers of CX and retention for many banks,” wrote Alyson Clarke, principal analyst at Forrester Research. “Banks that adopt modern and flexible digital banking processing platforms will find it easier and faster to deliver innovative (and profitable) customer solutions.”1 ServiceNow is committed to revolutionizing financial services with new products and services. This initial integration marks the beginning of a more extensive, multi-phased relationship between Visa and ServiceNow. The companies will continue to build new solutions and will distribute Visa products and services to joint customers. Together, ServiceNow and Visa will help clients improve dispute management. 1Forrester, Consumer Banking Trends, 2024: Trends Shaping Retail Consumer Banking In The Current Economic Climate, Jan 17, 2024 About ServiceNow ServiceNow makes the world work better for everyone. Our cloud‑based platform and solutions help digitize and unify organizations so that they can find smarter, faster, better ways to make work flow. So employees and customers can be more connected, more innovative, and more agile. And we can all create the future we imagine. The world works with ServiceNowTM.

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Financial Management

BlackRock Agrees to Acquire Global Infrastructure Partners (“GIP”), Creating a World Leading Infrastructure Private Markets Investment Platform

BlackRock, Inc. | January 15, 2024

BlackRock, Inc. and Global Infrastructure Partners a leading independent infrastructure fund manager, jointly announce that they have entered into an agreement for BlackRock to acquire GIP for total consideration of $3 billion of cash and approximately 12 million shares of BlackRock common stock. A $1 trillion market today, infrastructure is forecast to be one of the fastest growing segments of private markets in the years ahead. A number of long-term structural trends support an acceleration in infrastructure investment. These include increasing global demand for upgraded digital infrastructure like fiber broadband, cell towers and data centers; renewed investment in logistical hubs such as airports, railroads and shipping ports as supply chains are rewired; and a movement toward decarbonization and energy security in many parts of the world. Further, large government deficits mean that the mobilization of capital through public-private partnerships will be critical for funding important infrastructure. Finally, as capital has become more scarce in a higher interest rate environment, companies are exploring partnership opportunities for their embedded infrastructure assets to improve their returns on invested capital or to raise capital to reinvest in their core businesses. BlackRock has a broad network of global corporate relationships as a long-term investor in both their debt and equity. These relationships will help us lead critical investments in infrastructure to improve outcomes for communities around the globe and generate long-term investment benefits for clients. The combination of GIP with BlackRock’s highly complementary infrastructure offerings creates a comprehensive global infrastructure franchise with differentiated origination and asset management capabilities. The over $150 billion combined business will seek to deliver clients market-leading, holistic infrastructure expertise across equity, debt and solutions at substantial scale. Marrying the proprietary origination and business improvement capabilities of GIP and BlackRock’s global corporate and sovereign relationships provides a platform for diversified, large-scale sourcing to support deal flow and co-investment opportunities for clients. We believe bringing GIP and BlackRock together will deliver to clients the benefits of broader origination and business improvement capabilities. Founded in 2006, world leading independent infrastructure investor GIP manages over $100 billion in client assets across infrastructure equity and debt, with a focus on energy, transport, water and waste, and digital sectors. GIP’s performance has been driven by proprietary origination, operational improvements, and timely exits. They have successfully scaled their global equity flagship series, with the most recent fully invested flagship fund in 2019 surpassing $22 billion. BlackRock’s over $50 billion of infrastructure client AUM is comprised of infrastructure equity, debt and solutions, and has grown both organically and inorganically since inception in 2011. Top investment talent at BlackRock lead franchises that include Diversified Infrastructure, Infra Debt, Infra Solutions, Climate Infrastructure and Decarbonization Partners. The GIP management team, led by Bayo Ogunlesi and four of its founding partners, will lead the combined infrastructure platform. They will bring with them talented investment, and operationally focused business improvement teams with a strong track-record of building and running high-performing private markets businesses. GIP’s founders and teams remain highly committed to clients, and we expect the integration with BlackRock’s broader platform will generate even greater opportunities. Subject to completion of customary onboarding procedures, BlackRock has also agreed to appoint Bayo Ogunlesi, GIP Founding Partner, Chairman and Chief Executive Officer, to the Board at the next regularly scheduled board meeting following the closing of the transaction. “Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy. We believe the expansion of both physical and digital infrastructure will continue to accelerate, as governments prioritize self-sufficiency and security through increased domestic industrial capacity, energy independence, and onshoring or near-shoring of critical sectors. Policymakers are only just beginning to implement once-in-a-generation financial incentives for new infrastructure technologies and projects,” said Laurence D. Fink, BlackRock Chairman and CEO. “I’m delighted for the opportunity to welcome Bayo and the GIP team to BlackRock, and happy to announce our plans to have Bayo join our Board of Directors post-closing. We founded BlackRock 35 years ago based on a unique understanding of investment risk and the factors and forces driving investment returns. GIP’s deep understanding of the factors and forces driving operational efficiency for long-term value creation have made them a global leader in infrastructure investing. Bringing these two firms together will create the infrastructure platform to deliver best-in-class investment opportunities for clients globally, and we couldn’t be more excited about the opportunities ahead of us.” “I’m excited about the power of this combination and the prospect of working with Larry and his talented team. We share with BlackRock a culture of collaboration, client focus, investment partnership, and commitment to excellence. Investors have adopted private infrastructure investing for its ability to provide stable cashflows, less correlated returns, and a hedge against inflation. Global corporates have turned to private infrastructure as a fast innovator and a more commercially agile owner of infrastructure assets that aren't core to their commercial businesses. This platform is set to be the preeminent, one-stop infrastructure solutions provider for global corporates and the public sector, mobilizing long-term private capital through long-standing firm relationships,” said Bayo Ogunlesi, GIP Founding Partner, Chairman, and CEO. “We are convinced that together we can create the world’s premier infrastructure investment firm.” About BlackRock BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable.

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