About 10 years ago, banks raced to invest in internet banking. Billions of shillings were sunk in a new digital banking innovation that promised to recoup the shine that had been taken away from the banking sector by mobile money.
It was a race of two faces: catch up in a race that the sector had seemingly lost to mobile money, and set up the future of banking.
However, years later, cybercriminals have turned an otherwise good innovation into their turf, where they occasionally turn up – clean people’s accounts, shop expensively, with owners of such accounts only getting notifications of transactions whose only excuse is a vague explanation from their bankers of ‘you shared your PIN with strangers’.
And now banks are staring at billions of invested capital in platforms, where the numbers are tanking, and targets are failing to spur further investment.
Uganda’s financial sector is rapidly digitising, but the surge in cyber threats is casting a shadow over the promise of seamless online banking.
The Bank of Uganda Integrated Annual Report 2024/25 reveals that while digital transactions continue to grow, internet banking usage has declined, signaling growing public concern about cybersecurity vulnerabilities.
‘This reduction reflected potential user concerns about the cyber threat landscape,’ Bank of Uganda said.
The report notes that in the 12 months to June, active internet banking users dropped by 6.6 percent, from 0.96 million in June 2024 to 0.9 million in June 2025.
Transaction volumes also dropped sharply by 19.5 percent, from 9.7 million to 7.84 million, while total transaction value fell to Shs113.9 trillion.
Apart from the decline in existing users, the uptake remains very low when compared to the more than 20 million accounts in the banking sector.
The contrast
In contrast, mobile banking, which benefits from stronger public trust and simplified authentication, rose by 6.5 percent in the same period, with transaction values soaring by nearly 40 percent.
This divergence paints a clear picture that while Ugandans are increasingly embracing mobile wallets, they are retreating from internet banking, amid fears of hacking, phishing, and data breaches.
But in its report, Bank of Uganda noted that it had made cybersecurity a cornerstone of its digital transformation agenda by enhancing its cybersecurity framework to align with international standards and expanding the capacity of its Security Operations Centre for real-time threat monitoring.point protection, firewalls, and intrusion detection systems, the central bank noted, have been upgraded, supported by regular cyber drills and business continuity simulations.
Bank of Uganda governor Michael Atingi-Ego said in the report that these measures are essential to maintaining ‘an efficient, stable and resilient financial system,’ noting that cyber and technology risks now sit alongside traditional economic risks in the central bank’s supervisory framework.
Bank of Uganda is also reinforcing resilience by operationalizing an AI-enabled Payments Control System through its Anti-Fraud Consortium, designed to detect and neutralise fraudulent activities across payment networks.
Ugandan’s concerns mirror a broader continental trend. During the 2024 Comesa Symposium for Central Bank Governors, cybersecurity and digital banking emerged as top discussion points, with central banks across Africa acknowledging that rapid digitalization, while transformative, had expanded the attack surface for cybercriminals.
To bolster monitoring, the central bank plans to roll out SUPTECH, a supervisory technology system enabling real-time data collection from financial institutions, which will help in detecting irregularities early and enforce compliance across banks and fintechs.
However, the challenge now lies in balancing innovation with security.
As digital finance deepens, Uganda must safeguard both financial stability and consumer trust.
The central bank’s efforts to modernize payment systems through the National Payment Switch integration promise faster and more secure transactions, but these upgrades also demand stronger cyber defense mechanisms.
For Uganda’s digital economy to thrive, the future of internet banking will depend not just on technology, but on trust. For now, as the numbers suggest, users have lost that trust, and they are retreating.