Equity Bank’s thin-SIM mobile money transfer system faces more hurdles after a data specialist went to court seeking to block its rollout.
Mr Daniel Murage argued that the Communications Authority of Kenya has allowed the bank, through its subsidiary, Finserve Africa Ltd, to roll out the service for a one-year trial period without following due process.
“The bank intends to subject its customers to the service without providing any safeguard to the vulnerability and safety of (the) personal data of the account holders in their possession since the system’s vulnerability is at high risk,” said Mr Murage.
Mr Murage, who claimed to be an account holder with Equity Bank, said the risk is further compounded by the lack of data-protection laws in Kenya and the bank’s failure to adhere to data-protection policies approved by the Cabinet.
He added that the absence of the laws would allow third parties to easily access customers' personal data, including the account numbers and amount of money they have.
RISK OF CONTAMINATION
“The technology poses real risk of contamination of private data and transmission to third parties without (the) consent of primary customers and account holders. The transmission of data to third parties is a simple procedure that can be done by anyone without the necessary regulations,” said Murage.
According to Mr Murage, CAK and Equity Bank have disregarded the safety concerns raised by other mobile phone providers and the parliamentary committee on technology.
He submitted that CAK and the bank have ignored advice to wait for data-protection laws to be adopted and that to date they have not offered any assurance to customers that their data will be safeguarded.
“The bank has entered into various contractual engagements of transmission with other entities without consulting the account holders. It will make other people easily access our loans, cash, bank statements and assets without our knowledge,” said Murage.
He added that in the absence of data-protection laws, he would have no redress in the event that someone intrudes into his privacy by accessing his bank data information.
Mr Murage alleged that the former CAK director-general is the current chairman of Finserve Africa Ltd, which he said had made the company exempt from having to comply with various telecommunication rules and regulations.
He wants the court to restrain Equity Bank from conducting a one-year trial of the thin-SIM technology until pending issues on data protection are addressed.
Mr Murage’s suit is the second petition challenging the bank’s flagship mobile money transfer services.
The Consumers Federation of Kenya (Cofek) in June sought to cancel the Mobile Virtual Network Operator (MVNO) licence granted to the bank, arguing that CAK did not follow the right procedure in issuing the licence to Finserve Africa Ltd.
According to Cofek, CAK allocated the licence in an opaque manner without any public tender or public consultation, and that consumers were suspicious since there was no assurance that consumers would be safeguarded from bad services associated with mobile money service providers.
Cofek alleged that the process raised security questions, especially fears about money laundering in the event of fraudulent transactions.
The matter is pending.