There were 1,047,031 cyber hacks reported in Brazil last year. That’s a nearly 200% jump over 2013, according to cert.br, the state agency that monitors cyber security in Brazil. As in many markets, fraud was the most frequent type of cyber attack in Brazil, accounting for 45% of the more than 1 million cyber hacks, while 25% were scan and 21% of attacks involved DoS. Invasion, web and worm attacks were less common.
Behind the Data
In all likelihood, the headline figure understates the extent of cyber hacking in Brazil. A recent article in Foreign Affairs noted that part of the problem is a reluctance to report hacks due to reputational risks: “Large banking and retail corporations prefer to keep quiet about the extent of their losses for fear of damaging their reputations and scaring clients.”
At the same time, Latin America is just beginning to pay bills and make peer-to-peer payments online, and Brazil’s mobile payment market is poised for growth. Frost & Sullivan forecasts there will by 17.8 million registered mobile payment users across Latin America’s largest markets (Brazil, Argentina, Colombia, Peru, Chile) by year’s end, a whopping 62.6% increase year-over-year. Mexico is currently Latin America’s largest mobile payment market, but Brazil is expected to assume the top position in 2016. By 2020, Brazil will represent half of Latin America’s mobile payment market.
Brazil will account for an increasing share of the region’s fast growing mobile payment market. Yet, in the face of strong economic headwinds, banks, online retailers and others in Brazil are going to be especially careful to target capex toward securing near term profit margins. Beefing up payment protections may be a secondary priority.
Brazil’s regulations on cybercrime are piecemeal and the track record of prosecution for cyber crimes is weak. Yet the government, beset by scandal and just now coming to terms with the souring Brazilian economy, doesn’t look ready to launch a crackdown on cyber crime. Not only is the extent of cybercrime in Brazil likely to be worse than cert.br’s figures indicate, but without better regulations and more effective safeguards the problem is likely to get worse as more and more Brazilians pay via their mobiles.