The Middle East and Africa (MEA) region has a growing cybersecurity market, which has undergone its own digital transformation across the vast region of over 1.7 billion people.
Various reports and research seems to confirm that the MEA region has a growing cybersecurity industry. For example, according to a report from Mordor Intelligence, the cybersecurity market in MEA was valued at $7.174 billion in 2019 and was expected to register a compound annual growth rate (CAGR) of 14.08 per cent during 2020-2025.
Another report from ResearchAndMarkets.com called Middle East Cybersecurity Market by Component (Solutions and Services), Security Type (Network Security, Endpoint Security, Cloud Security, ICS Security, and Others), Deployment Mode, Organization Size, Vertical, and Country – Global Forecast to 2025 suggests the same. For its pre-COVID-19 forecast, the Middle East cybersecurity market is projected to grow from $16.1 billion in 2020 to $28.7 billion by 2025 with a CAGR of 12.2%. Interestingly, its post-COVID-19 forecast increased that, where its CAGR rate looks to be at 13.8% with a 2020 figure of $15.6 billion to a 2025 forecast of $29.9 billion.
There are various reasons why it plays a large role in the MEA region but at the end it is generally the regions rise in digital transformation in a short period of time.
At top level, much of the region has been undergoing various economic development strategies. For instance, in the Gulf Cooperation Council (GCC) region, all of the six GCC members have their own variants of their wider strategies of some sort (Bahrain Economic Vision 2030, Kuwait Vision 2035, Qatar National Vision 2030, Oman Vision 2040 and Saudi Vision 2030). The United Arab Emirate (UAE), for instance, not only has other national initiatives such as UAE Centennial 2071 and UAE Vision 2021 but also variants in their respective Emirates such as Abu Dhabi Vision 2030. This is all from a piece from The Fintech Times on the Overview of The Economic Development Strategies In The Middle East’s GCC Region. In addition, other initiatives such as in Saudi Arabia, part of its wider 2030 strategy, also has a new artificial intelligence (AI) strategy that will help propel the Kingdom to be a leader in that front.
As much of the wider economic development diversification has prioritised digital transformation, countries such as the UAE have become a leader in digital transformation. In other parts of MEA, such as in Africa, digital transformation either has come as part of its large national economic strategies such as in Egypt as well as other governmental support initiatives – whether they include being part of an economic development strategy or not. In the fintech space, highlights in Africa were felt across much of the continent – from Nigeria to South Africa to Angola to Ghana to Kenya – to name a few. They included announcements from planned fintech strategies to fintech offices for instance.
Israel, known as a ‘Startup Nation,’ has also been a global leader in cybersecurity. Israeli startups received $1.19 billion (almost 20%) of global VC investments in cybersecurity, according to a report called Israel’s Cybersecurity Industry from Start-up Nation Central. The same report highlighted that there are around 450 cybersecurity companies operating in Israel. The country has had an industry since the 1980s, where companies began developing anti-virus software and information security. They have been at the forefront for much of wider tech innovations and particularly in cyber, such as the Israeli Ministry of Finance’s Fintech-Cyber Innovation lab Programme, the first initiative in the world that leverages governmental assets and data in order to promote Fintech and Cyber startups in an open innovation platform. Examples of Israeli cyber companies include Imperva, Check Point, Radware and CyberArk – to name a few. The country, with its tech scene and history of cyberattacks, coupled with other factors such as promoting the sector and educating the youth on tech in general, shows much of the innovation its cyber industry has produced on a global stage.
Another note, in Turkey, the country is now ranked 20th on the Global Cyber Security Index as a result of the country’s efforts to strengthen its sovereignty in the cyber domain, which was said by the country’s Vice President, Fuat Oktay.
With Fintech Middle East in 2020 and Predictions In The Region for 2021, even before COVID-19, fintech was playing a large role and during the pandemic and beyond most likely will continue to do so. This includes the likes of contactless payments and other mechanisms where consumers and companies are providing sensitive data, which exposes people to potential cyberattacks. For instance, as in MEA as a whole where over one in nine point of sale (POS) transactions are now contactless and also the growth of online shopping as well can expose more potential challenges.
The Morder Intelligence report highlighted examples such as in the UAE. For example, Smartworld stands to be the first Cyber Security Centre, which will provide continuous monitoring of online threats and cyber threat management to companies across the region’s government and private sectors. Companies like Tata Communications has unveiled an advanced cybersecurity response center in Dubai.
In terms of Africa, the growth of non-cash volume due to the continent’s young population will grow the demand for cybersecurity. The same report says, “This factor is expected to drive the new mobile money and digital payment schemes, with Kenya emerging as the regional leader in the implementation and uptake of mobile payment solutions, such as M-Pesa. Augmenting this trend, ABK Egypt, with 39 branches and 85 ATMs across the country, has employed Cisco’s cybersecurity solution to stay at par with the country’s digital transformation.”
Despite research showing an overall decrease in certain malware families and types in sub-Saharan Africa in H1 2020 (36% decrease in South Africa, 26% decrease in Kenya and a 2.7% decrease in Nigeria), Kaspersky research has warned that the human cyber threat remains rife. Africa is not immune to the evolving techniques of Advanced Persistent Threats (APTs), as well as the possibilities of being a future target of hacking-for-hire threat actor groups.
In the Middle East, in particular the GCC, which pre and during COVID has seen banks accelerate their digital transformation, cyber security to protect their customers’ accounts and investments will also continue to grow.
Finally, beyond just fintech but in our day to day lives, the demand for cybersecurity in the region has gained traction in the water systems and pumping stations due to automation, where the threat of cyberattacks has increased in the region.
MEA will continue to see an importance in cybersecurity due to its growth in digital and wider digital transformation – even before the 2020 pandemic that made much of us go virtual and digital.