Evolution of Data Privacy Laws and Their Impact on Banking Services in Africa

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“UBA Ordered to Compensate Customer ₦8,000,000 for Data Privacy Violation
In a significant legal ruling, UBA has been directed by a Lagos court to pay ₦8,000,000 ($5,080) to a customer, Miss Folashade Molehin, for grossly violating her right to data privacy. The case stemmed from UBA’s creation of a domiciliary account in Miss Molehin’s name without her consent, leading to considerable distress and financial losses.
Miss Molehin’s complaint, initially lodged via Paradigm Initiative’s digital rights reporting platform Ripoti, culminated in a court decision in June, underscoring pervasive vulnerabilities in the banking sector that demand immediate attention.
The incident is emblematic of broader challenges within the industry, necessitating proactive measures to bolster data protection practices.
Data Protection Framework in Kenya
Kenya’s data protection landscape is governed by the Data Protection Act of 2019, enforced by the Office of the Data Protection Commissioner (ODPC). This legislation aims to safeguard personal data by ensuring responsible and transparent handling by entities.
The Act defines personal data broadly, encompassing identity details, contact information, financial data, and sensitive personal data like health and biometric information. It establishes principles for lawful and transparent data processing, mandating robust security measures to prevent unauthorized access, alteration, disclosure, or destruction of personal data.
Challenges and Penalties
ODPC highlights fintech companies, particularly digital lenders, as frequent offenders in data privacy breaches in Kenya. Violations can result in penalties up to Sh3 million, yet repeat offenses remain prevalent.
Role of Banks in Data Protection
As custodians of extensive personal data, banks bear significant responsibility for data protection. Given the high value of financial data on the black market, banks must implement rigorous measures such as data encryption, strict access controls, regular audits of security practices, employee training on data protection protocols, and comprehensive incident response plans.
In today’s digital era, safeguarding personal data isn’t just a legal obligation but a moral imperative. Banks must uphold the highest standards of data protection to preserve customer trust and ensure the integrity of financial systems.”