Latin America’s Great Firewall

The region’s cybersecurity infrastructure is maturing, just not fast enough.

Cybersecurity challenges are mounting across Latin America where the sophistication of digital security infrastructure lags much of the rest of the world. In Brazil, home to the region’s most advanced cybersecurity infrastructure, several state institutions play crucial regulatory roles including the Central Bank, the Securities Exchange Commission, the National Telecommunications Agency and the Brazilian Private Insurance Authority. Combining experience in facing down threats on several fronts could be an effective model for the rest of the region.   

A cybersecurity professional based in São Paulo explained, “Across Latin America, cybersecurity threats are not necessarily new in nature, but they have evolved, becoming more sophisticated and harder to detect. Collaboration along with consistent regulatory frameworks is the best way to deploy expertise.”

“Across Latin America, cybersecurity threats are not necessarily new in nature, but they have evolved, becoming more sophisticated and harder to detect.”

A cybersecurity professional, Brazil

Given the speed at which cybersecurity threats develop, innovation is key. It’s in this regard that the region’s cybersecurity startups have come to the fore in recent years. They raised a record-breaking USD 9.6 billion in venture capital in the first half of 2021 according to Crunchbase, a data analytics company. In October of last year, Brazilian asset manager Patria Investments acquired local cybersecurity outfits Neosecure and Proteus to create the largest information security platform in Latin America. Patria, which announced it would invest some USD 250 million in the sector was backed by Blackstone who along with other major asset management companies and hedge funds are keen to get in on an increasingly dynamic – and lucrative – market.    

Investment-backed technological advances cannot come soon enough. Just this week, Brazil’s O Globo newspaper reported that Rio de Janeiro-based cybersecurity firm PSafe identified several fake websites that could have defrauded “hundreds of thousands” of people by emulating central bank webpages.    

When it comes to cybersecurity, strategy matters, so too does consistency. “Brazil’s National Cybersecurity Strategy, published in 2020 is comprehensive. The problem is that its guidelines are not applied consistently across the public and private sector. Brazil has a significant number of nationally important companies that regularly report data leaks. The country, like most across the region, has a significant deficit of cybersecurity professionals,” explained the cybersecurity professional.   

“Brazil has a significant number of nationally important companies that regularly report data leaks. The country, like most across the region, has a significant deficit of cybersecurity professionals.”

A cybersecurity professional, Brazil

One area of growing interest to the corporate sector is in the realm of “cyber insurance”. Although cyber-attack insurance is well established in North America and Europe, it is a newer phenomenon in Latin America. It is likely that there will be an increase during 2022 in the number of attacks and data leaks across the region, underscoring the need for such products.  

Regional collaboration will be a key focus as technology synergies develop. The LACChain is one example – a regional alliance focusing on Latin American and Caribbean digital ecosystems. The alliance is seeking to better integrate blockchain technology into organisations, public and private sector, and is working towards a sovereign ID based entirely on blockchain. Sovereign ID’s have emerged as one of the best defences against fraud, a cyber specialism for techno-savvy organised crime groups. In Argentina, the consumer app MODO has been moving towards the sovereign ID concept – the app connects transactions of the country’s major banks on a single platform.  

Cybersecurity is one of Latin America’s most pressing security challenges. But it is also a source of opportunity in a region that is increasingly producing the right kind of talent to meet these challenges. Cybersecurity startups will be a key component of building a more watertight digital security infrastructure.   

 

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