Published On: March 31, 2018

Technology Fights Crime

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Two years ago, when entrepreneur Federico Vega launched a startup offering Uberlike services for the freight industry, the trucking business in Brazil was in the midst of a wave of cargo theft. Across Brazil, but especially in Rio de Janeiro, crime was soaring, as is typical in a recession, with armed gangs robbing one truck every 50 minutes in Rio.

While the government has reacted with military force to the crime wave in Rio, Federico turned to software engineers at his CargoX startup. By studying a range of industry and security data, CargoX developed software that identifies risks and helps truck drivers avoid crime hot spots where freight robberies have been occurring frequently. And when a robbery does happen, the software alerts the trucking company in real time.

CargoX is one of a growing number of Brazilian technology startups that are seeking digital solutions to the problem of crime. Organized crime is targeting everything from highway robbery to the illegal plunder of tropical hardwoods in the Amazon. Meanwhile, online crime such as credit card fraud is also rampant.

The traditional policing approach of direct confrontation is costly — 134 police officers were killed in Rio last year. Hence, more companies are turning to data analysis to deal more intelligently with security. Federico says the key is to learn from the data. “Everyone says it’s good to learn from your mistakes, but it’s even better to learn from other people’s mistakes.”

Having started from zero two years ago, CargoX today has signed up more than 5,000 truckers. The company scans data from all sources to screen its motorists and study past crimes to see what routes, times, neighborhoods, and types of cargo represent the highest risk. Certain gas stations are avoided because of their criminal associations. Daytime delivery is better than night. Drivers are tracked by GPS and must stay inside “geofences” — known safe routes. Traveling outside these routes alerts the system.

Rio crime

The use of big data to anticipate crime is at the center of the approach of another tech-savvy entrepreneur, Pedro Moura Costa, the founder of BVRio Institute, an organization that seeks market solutions to environmental issues. In Brazil’s Amazon region, organized crime gangs use official logging permits for timber they have illegally plundered. Deforestation is up nearly 50 percent from its low in 2012, fueled by the illegal timber trade.

Corruption and the lack of enforcement resources characterize the official response, plus criminals are heavily armed these days. But by using data to analyze the record of the companies involved in a timber consignment for past infractions and inconsistencies, Pedro Costa’s system can help customers avoid shipments of wood that may have been illegally harvested.

For instance, he found that as much as 84 percent of Brazilian timber bought by British traders since March 2016 had a high or very high risk of illegality. “Most people who buy tropical timber, and not only from Brazil, are getting involved in illegality, unfortunately,” he warns. While the system has not yet been commercialized, he says traders have used it to scan 20,000 shipments of timber worth U$1 billion.

Credit card fraud

Prevention lies at the heart of the strategy of Konduto, another technology startup in São Paulo, which is helping vendors with credit card fraud. This type of crime cost Brazilian consumers U$22.5 billion last year, second only to China, according to the 2017 Norton Cyber Security Insights Report.

Trying to catch the perpetrators is usually a waste of time. “Retailers try to take legal action, but the police usually say: ‘Look, I’ve got this murder to solve. Am I going to go after the person who used a stolen credit card? No,’ ” says Tom Canabarro, co-founder of Konduto.

Konduto uses artificial intelligence to scan the behavior of online buyers entering a website. If they exhibit certain suspicious characteristics, such as someone very young using a credit card with no spending limit, or someone using multiple names and mobile phone chips to buy the same product across various sites, Konduto advises its client to reject the transaction.

“What we do is like providing a security camera that you would have in the physical world but doing it online,” says Canabarro.

[Article uses source material from Joe Leahy of the Financial Times and was reprinted on the OZY website.]

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