Tech Roundup Jun. 12, 2020 | Covid-19 opened the doors for cyberattacks in Brazil

. Jun 12, 2020
Tech Roundup Jun. 12, 2020 | How Covid-19 opened the doors for cyberattacks in Brazil Photo: Supimol Kumying/Shutterstock

You’re reading The Brazilian Report‘s weekly tech roundup, a digest of the most important news on technology and innovation in Brazil. This week’s topics: Brazilian companies under cyberattacks, mobility startups’ attempts to increase revenues, and XP brokerage’s new digital moves. 

Cyberattacks a growing concern for Brazilian companies

In a matter of a week, three major corporations have been targeted by hackers: Avon, recently incorporated by

Brazilian cosmetic maker Natura, job-seeking website Catho, and carmaker Honda. This latest round of attacks shows just how much of a problem cyberattacks have become in Brazil, especially considering the new challenges posed by the “new normal,” such as ensuring security while employees are working from home.&nbsp;</p> <p><strong>What happened? </strong>On June 9, Natura informed Avon that their systems had suffered a “<a href="">cyber incident</a>” which interrupted some systems and partially affected operations. This happened only weeks after <a href="">vulnerabilities in Natura’s website</a> exposed customers’ sensitive data.&nbsp;</p> <ul><li>Honda’s operations in 11 factories — including their Brazilian plant — were reportedly compromised by a ransomware attack, in which a malicious archive “kidnaps” the company’s system. The company’s Brazilian motorcycle factory has remained closed since the attack <a href="">according to the press</a>.</li><li>Catho, on the other hand, identified a security breach on its database, but claimed that no sensitive information had been accessed. The company asked customers to redo their passwords and is working with a consultancy to increase the monitoring of its systems.&nbsp;</li></ul> <p><strong>What’s Covid-19 got to do with it? </strong>After companies were forced to move to remote work overnight, they became exposed to new threats. “Most companies had to migrate from safe environments to remote working within days. It was all or nothing to keep the lights on. These migrations are not trivial and left the doors open to criminals,” Rafael Cividanes, a director of cybersecurity firm Kryptus, <a href=";sid=18">was quoted as saying</a> by Convergência Digital website.</p> <p><strong>Next steps. </strong>A global research study by cybersecurity company CheckPoint shows when companies start to resume activities, 79 percent of them want to beef up security — because 75 percent are worried about increasing cyberattacks, especially phishing and social engineering scams. As a result, adopting security tools for mobile devices has become a new priority. &nbsp;</p> <hr class="wp-block-separator"/> <h2>Mobility startups resort to delivery during pandemic</h2> <p>This week, 99, followed Uber and Cabify by launching a <a href="">new delivery mode</a> — 99Entrega. Now, 99’s drivers will be able to transport packages of up to 10 kg, valued at BRL 500. As part of social distancing, passengers will pack the packages into the car’s trunk themselves and drivers must wear masks. 99Entrega service is currently only operating in the city of Goiânia, but is expected to reach São Paulo, Rio de Janeiro and Belo Horizonte later this year.</p> <p><strong>Making lemonade out of a lemon</strong>. In May, Uber launched the <a href=",uber-flash-servico-de-entrega-chega-a-mais-dez-cidades-no-brasil,70003329809">Uber Flash function</a> for deliveries, which is already available in five Brazilian cities, including São Paulo and Rio de Janeiro. Moreover, the app is offering a new Direct mode, allowing business owners to hail a car to deliver their goods. Besides delivery options, Cabify has invested in a <a href="">partnership with payments company Ebanx</a> through which users may acquire products and schedule a delivery dates with Cabify drivers.&nbsp;</p> <p><strong>Competition. </strong>Logistic startups like Rappi and Loggi are well-established in Brazil as delivery players, but mostly deliver small packages that can be transported by bikes or motorcycles. The ride-hailing apps are now opening a new frontier in this growing sector by allowing for the delivery of larger packages.&nbsp;&nbsp;&nbsp;&nbsp;</p> <p><strong>New attempt. </strong>99 has also launched the 99Poupa function, which offers a 15 percent discount for trips outside peak hours.&nbsp;&nbsp;</p> <p><strong>Why it matters.</strong> According to reports, drivers have seen their <a href="">revenues dramatically drop</a> due to quarantine, which is even more concerning considering how the gig-economy was already one of the few places where workers who had lost their jobs during the 2015/16 recession could find employment. The new tools are not only a way to help them increase their income, but also a way to keep drivers using the platforms.</p> <hr class="wp-block-separator"/> <h2>XP goes shopping</h2> <p>Brokerage XP announced two acquisitions this week: app Fliper, which allows users to connect multiple bank accounts, and DM10, an insurance marketplace that connects insurance brokers and companies.&nbsp;&nbsp;</p> <p><strong>Joining the open banking world.</strong> Fliper is XP’s new bet on open banking, whose regulation is set to be enforced by the Central Bank in 2020. The app allows users to connect multiple bank and brokerage accounts, allowing them to map out every aspect of their finances. According to Valor Econômico newspaper, the company has around <a href="">65,000 active users</a>, accounting for BRL 7 billion in assets across 85,000 accounts.&nbsp;&nbsp;</p> <p><strong>Tackling the insurance market.</strong> DM10 will enforce XP Seguros, the company’s insurance unit, by connecting insurance brokers to XP’s autonomous investment agents; DM10 customers will have access to a larger investment portfolio than just life insurance and pension plans, <a href="">reports</a> Brazil Journal.&nbsp;</p> <ul><li>In a LinkedIn post, XP CEO and founder, Guilherme Benchimol, said the company aims to democratize the insurance industry in Brazil, which he believes is highly concentrated. “It’s been years and years of lack of competition, absurd products, and unqualified services offered to our population. It’s time to change that,” he wrote.&nbsp;&nbsp;</li></ul> <p><strong>Get into the specifics.</strong> According to the press, Fliper will remain independently managed, while DM10 founder, Daian Moura, will become an XP executive. The amount for both transactions wasn’t disclosed.&nbsp;&nbsp;</p> <p><strong>Why it matters.</strong> Both acquisitions mark XP’s expansion to new areas and form part of the company’s “digital disruption” strategy, which earned it expensive valuations on its 2019 IPO. Plus, investors’ have been betting high on companies that present promising digital growth perspectives. Since the worst day on the stock market in March, XP stocks traded in New York have already risen 120 percent and are nearing all-time highs.&nbsp;</p> <hr class="wp-block-separator"/> <h2>Take note</h2> <ul><li><strong>Fintechs. </strong>Digital banks dominated the Brazilian section of Forbes’ <a href="">2020 World’s Best Banks</a> list. The survey, which tracked 40,000 customers in 23 countries, found out that Nubank is their favorite bank, followed by digital competitors Banco Inter and Neon. PagBank, the digital account of PagSeguro acquirer and Next, Bradesco bank’s digital unit. The magazine says the trend shows how digital presence became a competitive edge in a world of low interest rates.&nbsp;</li><li><strong>Startups. </strong>Against the odds, Brazilian startups are still raising funds. This week, startup Boomerang, specializing in renting objects to maximize retailer&#8217;s income, fundraised BRL 3 million in a round led by venture capital fund Canary and Ariel Lambretch, founder of mobility startups Grow and 99.&nbsp;</li><li><strong>Shopping. </strong>Brazilian e-commerce revenue increased by 71 percent from February to May, versus 2019 levels, to BRL 27.3 billion, according to market research consultancy Compre&amp;Confie. While the number of purchases spiked by 82.1 percent, as a result of more people resorting to online shopping due to quarantine, however, the average amount spent fell six percent to BRL 395.80. According to the company, people are choosing to purchase basic items for their daily needs instead of more expensive products, like electronics.

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Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Before joining The Brazilian Report, she worked as an editor for Trading News, the information division from the TradersClub investor community.

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