The cybersecurity imperative: Latin America’s challenge and opportunity

Threats are growing as businesses and governments migrate their services online and use new technologies like cloud computing and artificial intelligence to streamline operations. This digital transition is making it easier for hackers to exploit vulnerabilities and find ways in.

At the same time, global tensions mean that countries are adopting cyberwarfare as part of broader geopolitical strategies. Criminals are also using smarter, more intuitive tools to launch more convincing scams and attacks. All these changes have made it harder for organizations to keep their systems safe.

Emerging pressures

With data regulation significantly weaker than developed markets, Latin America faces heightened exposure to cyber threats. Global media coverage often focuses on incidents in the U.S. and Europe, but in the background, Latin America has quietly become one of the most targeted regions worldwide.

As digital adoption accelerates faster than institutional security capacity, the World Bank identifies Latin America and the Caribbean as the fastest-growing region for disclosed cyber incidents. Attacks have increased by approximately 25% over the past decade.

A recent study by Cybersecurity Economics for Emerging Markets highlights some of the reasons for this uptick, noting a disparity between cybersecurity investment in developing and developed countries. In India and Mexico, for example, per capita spending is just $1 USD compared to $30 USD in the United States and Canada. Furthermore, the United States invests 16 times more in cybersecurity than the entire Latin America and Caribbean region combined, stressing the urgent need for increased expenditure.

According to the IDB, although most countries in Latin America now have national cybersecurity strategies, only 13 possess the institutional capacity, resources or coordination mechanisms to implement strategies effectively. Moreover, just nine countries are equipped to protect critical infrastructure such as energy systems, ports, hospitals and tax administrations. This gap between policy intent and execution is a glaring structural blind spot for the region. Brazil alone accounts for as many extortion and ransomware incidents as the next five largest Latin American markets combined (Mexico, Argentina, Peru, Colombia and Chile) reflecting the scale of the problem, and the underlying vulnerability.

System failure

IDB notes that cyberattacks in the region have already disrupted tax administrations, ports and hospitals, emphasizing that cyber risk has evolved from an individual and corporate issue into a sovereign and public security concern.

Recent high-impact incidents have exposed the frailty of Latin America’s critical systems. Mexico’s 2019 Pemex ransomware attack disrupted operations¹, Ecuador’s 2019 data leak compromised the personal information of over 20 million citizens², Chile’s Banco de Chile suffered assaults in 2018 and 2020 that resulted in financial losses and data breaches³, and the 2020 ransomware strike on Telecom Argentina crippled customer service for an extended period of time⁴.

In 2022, Costa Rica’s Finance Ministry was targeted by the Russian hacker group Conti 2, which held sensitive citizen information for ransom and paralyzed the government’s ability to provide essential services. In response, Costa Rica became the first country in the world to declare a state of emergency in response to a cyberattack⁵.

In another recent case, Brazil’s healthcare software provider MedicSolution was hit by the ransomware group KillSec in September 2025⁶, exposing sensitive patient data across hospitals and clinics. Around the same time, Brazilian authorities uncovered a breach in the PIX instant payment system, where insiders and hackers stole roughly $100 million USD. This prompted the Central Bank of Brazil to announce immediate measures to enhance financial system security.

These incidents underscore a recurring theme: public and private sector vulnerabilities are deeply intertwined, creating feedback loops that magnify systemic risk.

Plugging the gaps

Latin America’s digital expansion is clear and remains one of its major economic trends. Internet usage increased from 49% in 2014 to 82% in 2024. The e-commerce market is also developing rapidly, growing 1.5 times faster than the global average⁷. Additionally, the Internet of Things (IoT) ecosystem is gaining traction, with the market generating over $4 billion USD in revenue in 2024 and forecasted to grow at a 15% compound annual growth rate (CAGR) through 2030.

As connected devices multiply across industrial, consumer and logistics applications, the downside to increased penetration is a lack of preparedness. Ransomware now accounts for nearly half of all successful cyberattacks in Latin America, with government institutions and financial firms among the most frequent targets.

The region’s rush to adopt cloud and AI technologies will be unsustainable without commensurate security investment. Countries like Brazil and Chile are backing several cloud and data-center projects, with the domestic market projected to double by 2029 at $8-9 million USD⁸. Despite these advancements, network security and regulatory oversight lag years behind developed-market standards.

When structural risk persists, investment inevitably follows—especially as cybersecurity is increasingly recognized as critical infrastructure, as opposed to a discretionary IT expense. In developed markets, recent geopolitical tensions and repeated system-wide disruptions mean that cybersecurity is now a baseline operational requirement. In the U.S., the Cybersecurity and Infrastructure Security Agency (CISA) coordinates cross-sector reporting, while the EU has tightened regulations through NIS2 and DORA, imposing stricter requirements on essential and financial sectors.

Although governments and corporations set reporting standards and regulatory requirements, they do not directly implement secure infrastructure. Instead, they depend on specialized private firms for cloud protection, endpoint monitoring and incident response. This privatization, however, introduces new problems.

Even leading security vendors are not immune to failure and often become targets of major attacks. For example, a faulty update from CrowdStrike in July 2024 triggered one of the largest IT outages in history, while the Microsoft–Midnight Blizzard breach in 2023 exposed sensitive government data. Other incidents—such as issues with token systems and identity management at Palo Alto Networks, Zscaler and Okta—highlight the systemic risks associated with an overreliance on a small set of providers. Despite these threats, cybersecurity investment continues to scale. Gartner recently projected global spending to exceed $213 billion USD in 2025⁹, driven by demand for zero-trust architectures and AI-enabled detection tools.

Against this backdrop, local governments and businesses are modernizing—expanding broadband coverage, building data centers and experimenting with AI-driven systems—but cybersecurity investment and governance have lagged, resulting in a multiyear catch-up cycle. Regional coordination is improving, with the CSIRT Americas Network now connecting 52 computer security incident response teams across 22 countries, facilitating information sharing and incident response. This institutional foundation is likely to support sustained capital inflows.

Turning a corner?

Global vendors are responding to these market dynamics, with Latin America’s cybersecurity sector seeing a surge in dealmaking.

CrowdStrike recently expanded its regional presence through partnerships in Mexico and Brazil, bringing its AI-driven Falcon platform to a broader enterprise base. Elsewhere, Experian acquired Brazil’s fraud-protection company ClearSale for $350 million USD¹⁰, signaling global interest in the region’s security and identity-protection markets.

Zscaler has actively expanded its Zero Trust Exchange infrastructure across Latin America, establishing data centers in major cities to reduce latency and comply with emerging data protection laws. Spain’s Hiberus agreed in late 2025 to acquire Telefonica Tech’s operations in Colombia, Mexico and Chile, to strengthen cybersecurity and cloud capabilities in the region.

Venture capital is also flowing. Uruguay’s security-testing startup Strike raised a $13.5 million USD Series A in 2025¹¹ to expand its pen testing platform into Brazil and the U.S., while Argentine phishing-awareness SaaS Whalemate secured a $1 million USD seed round¹² in mid-2025 to scale its platform. Private-sector commitments mirror a regional wave of spending: the Latin American cybersecurity market is projected to grow at compound annual growth rate of 12.4% from 2026 to 2033¹³.

In parallel, governments are prioritizing cybersecurity—developing national policies, regulatory frameworks and threat response centers to address an everchanging risk landscape. Argentina recently established the National Cybersecurity Center to oversee critical infrastructure protection, while Chile’s National Cybersecurity Agency identified over 900 organizations as operators of vital importance, reinforcing the country’s focus on safeguarding essential services. Mexico’s Digital Transformation Agency launched a comprehensive national cybersecurity plan, including new operational centers and mandatory guidelines for public servants. In Venezuela, a draft cybersecurity law has been proposed, aimed at defending against external threats. These initiatives, alongside the propagation of over 50 operational incident response centers across the region, reflect a growing public sector commitment to cybersecurity maturity and resilience.

The next phase

Cybersecurity has evolved from a tactical expense to a structural investment theme, closely linked to digital expansion, geopolitical shifts and changing regulatory landscapes. The core challenge is no longer about the inevitability of digitalization, but whether institutions can scale their capabilities quickly enough to safeguard critical infrastructure and support sustained investment. As cloud computing, digital payments, healthcare digitization and AI adoption accelerate, cybersecurity spending is set to increase—regardless of broader economic conditions.

For investors, the critical questions are not about whether cybersecurity budgets will grow, but rather who will capture this growth, how vendor ecosystems will diversify and how emerging markets like Latin America will bridge their resilience gap. In this context, cybersecurity is more than just a defensive measure; it is a long-term growth driver embedded in the region’s digital future.