🔒Forget The Bag, Secure The Vault!

Welcome to the 61st edition of ፍራንክ Digest!

Your weekly brief on all things Finance and Investing. Quick, enjoyable reads for busy professionals in 5 minutes or less.

Here’s what’s coming your way:

• 🔐 Securing the Vault: Cyber Threats Facing the Financial Sector

• 😭 Crying at The Pump: The End of Fuel Subsidies

• 🗝️ The Key Takeaways

Thanks for reading!

Cybersecurity Is the New Credit Risk for Financial Firms

Security

This isn't a plot twist from Black Mirror — it's your bank account we're talking about.

If you've following tech news this past week, you probably heard the ጉድ: 16 Billion (yes, with a B) usernames and passwords leaked — from big names like Apple, Google, Facebook, Telegram, and even government platforms. Basically, the who's-who of your digital life just got tossed into a hacker's buffet.

Which brings us to a real head-scratcher: what happens when this level of cyber chaos knocks on the doors of banks and fintech companies?

Short answer: money walks out quietly while your trust in the system packs its bags too.

Let’s not forget that Ethiopian banks have already felt the sting. Think back to the nearly ETB 7 billion scare involving Commercial Bank of Ethiopia (CBE) accounts. It was a close call—too close for comfort. And with more banks moving services online, the risk is only getting spicier. We're not just talking about stealing a few birr from one unlucky soul. We're talking about crippling entire systems, freezing funds, and crashing stock prices (assuming Ethiopian Stock Exchange lists companies in our lifetime 👀).

Why? Because bank and fintech ledgers are no longer those dusty books behind a teller’s glass. They’re digital. Which is great—until someone sneaky gets in. These records need to be locked down tighter than a family secret recipe. Access controls, audits, encryption… the whole nine yards. And maybe, just maybe, blockchain could help. Decentralized. Tamper-proof. Less drama.

But here’s the kicker: cyber attacks don’t care about borders. So whether you’re in Addis, Nairobi or London, the threat is the same. Once your data is in the cloud, it's the Wild West out there—you only get to keep what you can protect. For now, the government agency Information Network Security Agency (INSA) is the first line of defense for these attacks. What happens when some get through the crack?

🛡️ This is where Cyber Insurance might enter the financial sector discussion. Ethiopian banks and insurance firms could (and should) explore this partnership. American International Group (AIG) CyberEdge covers financial institutions’ costs related to data breaches,  ransomware attacks and operational downtime. 

💡 For Ethiopia or Emerging Markets, maybe not full-coverage for all deposits—our local insurers aren’t quite ready to carry that elephant. But there is room for adaptation. Ethiopian insurers and banks could collaborate to create:

• Cyber protection bundles for fintechs (Telebirr, ChapaPay, etc.)

• Bank deposit protection plans for high-value clients

• Awareness + insurance combo packages for regular depositors 

Affordable and optional coverage for individual accounts could be a selling point for banks to attract greater deposits and depositors— putting customers at ease.

💸 Investors are also taking notice. Companies listed on public markets abroad are now being judged not just by earnings, but by how cyber-resilient they are. So if you're running a financial firm and cybersecurity isn't on your boardroom agenda, you won’t get favorable attention.

For the rest of us mere mortals, shame if you've been recycling the same password since high school. But it’s time to level up. A network operator for the National Security Agency said: "It doesn't matter how strong your password is, if the database gets breached, it's game over". So, here’s your to-do list:

✅ Change your passwords periodically

✅ Use different passwords for different sites

✅ Turn on two-factor authentication (2FA – your new best friend)

✅ Try passkeys (Face ID or fingerprints)

✅ And for the love of your bank account, don't click on shady SMS links

Cybersecurity might not be the sexiest finance topic, but hey—neither is bankruptcy. And one wrong click could cost you both. 

Key Takeaways

1. Cyber threats = Financial Disaster: Ransomware, data breaches, and fraud aren’t just IT problems — they’re serious risks to money, reputation, and trust, especially in a digital-first financial system.

2. More than firewalls: Secure ledgers such as blockchain and cyber insurance are some of the measures financial institutions need to consider to safeguard the heavy responsibility they carry. 

3. Cyber Hygiene: Even the strongest system can be undone by one bad click. Change your passwords, enable 2FA, and don’t trust sketchy SMS links — your money depends on it.

ፍራንክ Picks 

🚶🏽 Event: East Africa Infrastructure & Water Expo [Happening Now]

🗞️ In the news: Enat Bank makes mommas proud with 1.4 ETB loans from Malefia 

♟️ Innovation: Wegenfund mixes Ethiopian generosity with crowdfunding

Fuel Subsidies? It’s Been Fun 👋

Economy

Good bye old friends!

Good bye extra Birr at the end of each month. 

So long seeing my fuel gauge reach the empty mark and knowing that I can push it for another day. 

The times we had, the burden that you’ve shielded us from. So many great memories ❤️

Who knew that getting rid of fuel subsidies would make us so emotional? Maybe deep, very deep down, we’re just softies at heart…

Now every drive to the gas station will feel like a trip down memory lane, those beautiful two digit numbers before the decimal, the 28 Birr, the 37, even the 91, gone from the meter reader. We forgot how good we had it.

They say time heals all, but is that enough? 

This comes after the government recently announced that it will completely remove its fuel subsidy program. Meaning, as fuel enters the land, it will now be priced as per the global market price (171.23 Birr as of June 16 FYI).

That’s a potential 40% rise 📈 on the current price! When will this hit the gas pump? Well, there’s no specific date but at least the Ministry of Trade and Regional Integration, the overseeing entity, can foresee a landing price. 

Fuel is essential. Its price influences the price of other commodities. And that worries us…unless there’s some plan to soften the blow (ለአንገትም እንኳን ትራስ አለ እኮ!)

With pockets shrinking and expenses rising, higher fuel costs will only exacerbate things further. 

And the government is aware of that but it's betting on a fair market pricing strategy to reduce its spending and bridging its big budget deficit - Just mind the gap 🚧

👀 Also peep the close to 2 Trillion Birr that’s projected to be collected next year. (Money, money, money🎶)

FYI a ‘deficit’ is just a fancy way of saying that there’s more spending than income. The government can do that. You? Not so much. Harsh truth? Maybe. But hey, at least we’re not lying to you 🤷‍♂️

In theory, the savings gained from eradicating subsidies should be passed on to the people. Meaning, paused infrastructure projects can be rebooted, long awaited reforms can be implemented and the private sector can start getting a piece of the action.

What does this mean for us, as individuals? 

🩳 Short-term:

• Pain. Let’s not sugar coat it (Which might get expensive btw). High prices, less spending. And a general sense that the more we earn, the further we feel like we’re being pushed into the inflationary zone. 

• For businesses, they’ll feel the pinch as well. And their financial relief is to pass on the prices to consumers.

👖 Long-term:

• Less pain but with a touch of uncertainty. This is a huge policy change and effects will be felt slowly. Savings on fuel subsidies should encourage new spending 

• Some businesses might benefit from revitalized public sector projects such as the construction of EV charging stations or digital transformation initiatives. In the end, these would create jobs (temporary as well as permanent), potentially industries even thereby producing goods and services that people can benefit from.

How Should You Prepare?

🚙 New EV car? Well spending money to save money seems kind of counterintuitive. 

🚶‍♂️‍➡️ Stop driving altogether? Well that just doesn’t make sense.

🚍 Public transport? Well it’s not like they don't use fuel either (Yes those EV ones are out there but are the fares lower?)

Ideally? Budget.

Yes, it’s the same old boring answer but it’s effective every single time. Budgeting is not just ገንዘብ መቆጠብ instead, it's distributing your money in a more efficient way.

Your savings might dwindle until you see your income rise a bit but at least you can cover your important expenses.

A more effective method would be to invest, yet Ethiopia has an issue of liquidity. If you own bank or insurance shares, great! They can hedge against ever rising inflation. Are they valuable? Of course! But getting quick cash for them when times get tough? No chance.

The guys in fancy pants and expensive colognes call this a ‘liquidity crunch’.

What is needed is a market: a place where buyers with googly eyes are waiting to buy your non-cash ንብረት in exchange for something more tradable, like cash! 

The incoming stock market (We know, the more we write about it, the more it sounds like a myth) will be able to remediate this stumbling block. Until then, those wads of cash hidden under your pillow might come in handy…

Key Takeaways

1. Subsidy No Mo’: The decades long intervention of government support to sustain fuel import prices has ended. Marking a gradual end to ‘cheap’ fuel prices.

2. Market Price: The removal of subsidies means Ethiopia is shifting to a market based pricing. This has its own pros and cons both in the short and long term.

3. New Dynamic: Higher prices reduce spending and slow down the economy in the short run. In the long run, the government can use the savings to support public sector efforts and create new jobs, hopefully even industries. As for us, the individuals, we might tighten our belts but smart budgeting along with parking in less inflation prone assets could help us weather the ‘oily’ storms. 

Thanks for sticking with us, ፍራንክ family! Keep those wallets smart and your inbox open - we’ll be sliding in next week!