Financial Crime in Brazil: A Growing Concern

Brazil has long been a pioneer in financial technology, with a significant percentage of its citizens embracing digital banking. According to recent surveys, 44% of Brazilian customers have digital-only accounts, a stark contrast to less than 20% in the United States and Canada. The country’s central bank has also introduced Pix, an instant-payments platform that has seen tremendous success, processing over 3 billion transactions per month.

A Growing Concern

However, this rapid growth in fintech adoption has also attracted cyber-criminals, who are increasingly targeting Brazilian banks and individuals. According to Kaspersky Lab, a cyber-security firm, Brazil is the top country for attacks by banking trojans, with over 1.8 million attempted infections between June 2022 and July 2023.

Evolution of Cyber-Crime

Initially, criminals focused on using banking trojans, which are relatively easy to use and require little skill. However, as banks developed better defenses, cyber-criminals were forced to adapt and develop more complex and lucrative attacks. Brazil’s underworld has developed advanced “point of sale” malware, known as Prilex, which is used to steal bank details from card readers.

• Prilex Malware: This malware can block contactless payments by stopping the short-range connection between a credit card and payment terminal, allowing scammers to use stolen credentials to authorize fraudulent transactions.
• 2016 ATM Hack: In 2016, hackers even remotely took over over 1,000 ATMs in Rio during Carnival celebrations using a basic version of this software.

Rise of Ransomware Attacks

In addition to trojans and malware, Brazil has also seen an increase in ransomware attacks, which involve gangs scrambling computers and demanding payment in exchange for restoring access. The country’s lawmakers have recently met to discuss the growing use of artificial intelligence in cyber-crime.

Financial Losses

The financial losses due to these crimes are significant, with estimates suggesting that Brazil is among the top five countries in terms of the cost of cyber-crime, with annual losses totaling around $20 billion. This amounts to approximately 0.9% of the country’s GDP.

Conclusion

While there are efforts underway to improve data protection and increase spending on cyber-security, experts warn that the bigger problem lies with naive customers who fall victim to scams. Until they fully understand the risks involved, cyber-criminals will continue to thrive in Brazil’s financial landscape.