LPRC - CrimeScience – The Weekly Review – Episode 177

Episode Date: February 22, 2024

LPRC INTEGRATE is Next Week, and this week our hosts discuss the amazing things the LPRC is doing! On this episode, our hosts discuss Chinese Cyberattacks brought to light by the FBI, the challenges of growing up for Gen Z, the Girl Scouts, the best pension/retirement countries (including where the US lands), and ChatGPT's new Text to Video generation. Listen in to stay updated on hot topics in the industry and more!

Hi, everyone, and welcome to Crime Science. In this podcast, we explore the science of crime and the practical application of this science for loss prevention and asset protection practitioners as well as other professionals. Welcome, everybody, to another episode of Crime Science Podcast. Today, the latest episode in our weekly update series. I'm joined by co-hosts Tony D'Onofrio and Tom Meehan, and our producer Diego Rodriguez. And with no further ado, what I'm going to do is hand it over to my esteemed colleagues, Tony D'Onofrio and Tom Meehan. Tony, if you could take it away, I appreciate it. Thank you, Reid, for that great update. Let me start this week with a new crime survey just published by the British Retail Consortium. As they state, this survey represents the single largest and most

reliable barometer on the state of retail crime in the United Kingdom and is based on a sample from retailers representing over 1.1 million employees and nearly 200 billion pounds in sales turnover, which in U.S. dollars is about $250 billion. That's a large sample. Once again, as they summarize, the crime survey shows a massive increase in violence and abuse reaching a level experienced during the pandemic and nearly a half a million incidents a year it also shows a massive increase in customer theft doubled into just over 2 billion pounds a lack of confidence in the police response with 60% reading it as poor or very poor and a continuation on

the on the rise of cybercrime and that's just a summary so let's dig into the details. Foremost to me was the rise in crime and violence. The research found that just over 1,300 violent or abusive incidents per day were taking place in the survey time period, up from almost 870. 475,000 incidents took place in the study period, up from 316,000 and it's now equivalent to just over 100 per day, again this is just the united kingdom and that would be disturbing in europe overall the cost uh to retailers uh crime including crime prevention measures was 3.4 billion pounds or nearly 4.2 billion dollars at current exchange rates. This amount is double

what it was in last year's UK survey. Losses from customer theft reached 1.8 British pounds or nearly 2.3 billion US dollars, which was the highest ever, up from 950 million sterling or 1.2 billion dollars incidents of customer theft rose to and this was a big number 16.7 million up from 8 million or again doubling again crime prevention measures cost 1.2 billion sterling or roughly 1.5 billion dollars 61% of retailers late police response has poured a very poor which was up from 44% last year, only 8% and this was shocking, only 8% of reported incidents or violence and abuse were prosecuted, only 36% and again shocking of incidents of violence and abuse were reported by retailers to the police. 57% of retailers report an increase in cyber attacks and breaches, with 33% they stayed at the same level. Again, this is very disturbing data, lots of it dabbling,

really a major spike in customer theft, and in a lot of ways it parallels some of the trends that we're seeing in other parts of the world, including the United States. Let me now switch topic and go to new research from Gallup on Gen Z perspectives on U.S. education, well-being, and the future as the Gen Z generation sees it. As a reminder, Gen Z is defined as those born from 1997 to 2011. According to insider intelligence, this generation represents a large 27% of the U.S. total population. Some of the key findings from this new research, less than half of Gen Z Americans are thriving in their lives, among the lowest across all generations in the U.S. today, and a much lower rate than millennials at the same age. 76% of Gen Z members agree that they have a great future ahead of them, yet only 44% report being prepared for that future.

Members of the Gen Z who have an adult encouraging them to pursue their goals and dreams are more than twice as likely as those without to strongly agree that they have a great future ahead and will reach their goals. future ahead and will reach their goals. Despite significant learning loss coming from out of the pandemic, three-quarters of Gen Z students rate their academic performance as excellent or good, though male, black and Hispanic students rate their academic performance lower than others. Gen Z with excellent mental health are more than twice as likely

than those with a fair or poor mental health to say that they get excellent grade in school and are 24 points less likely to have missed any school in the past 12 months. And Gen Z most frequently cited hope for the future is to make enough money to live comfortably, that's 69%. While 64% say financial resources are a barrier to achieving their future goals and exploration. I keep bringing up both millennials and Gen Z in my conversations in the podcast because the new generation that went through the pandemic and also went through the

financial crisis in the 2008 period really are stressed. In fact, in my presentation that I do around the world, I talk about how the unlucky generation is the millennials because they are building the slowest amount of wealth because they've really been unlucky in terms of how they grew up so it's a tough life for both gen z and also for the millennials so and here today were some good insights on how we can help them and And then finally, this week, let me end by providing some insights on the best places to retire in the world, according to the Mercer CFA Institute Global Pension Index. As pointed out in the research, the average Asia population around the world continues to rise in many markets. Inflation and rising interest rates

have created a new market dynamic that poses significant challenges to pension plans. We also see continued fracturing as it relates to globalization. And these are just a few of the increasingly complex challenges that pension funds face that impact retirees in significant ways. So in terms of pensions and

retirement, receiving an A for their programs are the following countries, the Netherlands, Iceland, Denmark, and Israel. Receiving a B plus are Australia, Finland, and Singapore. Receiving just a B are Norway, Sweden, UK, Switzerland, Canada, Ireland, Chile, Uruguay, Belgium, New Zealand, Portugal, and Germany. You might be wondering by now, if you're listening in the United States, what grade does the U.S. get? And the answer was a surprising C+. And the U.S. is ranked 22nd in the 2023 Mercer CFA Institute Global Pension Index. My birth control of Italy is even lower. It's ranked 31st and only gets a C grade. Wow.

So summarizing this week, crime in the U.K. is a major challenge. And I was surprised, really surprised by many of the statistics. The Gen Z generation needs help as does the millennials. So help as you heard, if they have a mentor, if they actually do much better in life. And a lot of the lessons from around the world on improving pensions and retirement, which I'm not planning any time soon, but Italy is in the place, it looks like, so I got to plan for something else. And with that, let me turn it over to Tom. Well, thank you, Tony, and thank you, Reid, and hello, everybody. I wanted to start off today's broadcast from something that made national news, international news, really. And it was a warning from the FBI director on China-backed cybersecurity events or cybersecurity attacks on U.S. infrastructure.

And this was a pretty widespread news story from February 17th up until today, the time of the taping, which is the 20th. And what it really talks about is this is not necessarily new. from the US government of a large amount of what they're calling Chinese-backed, government-backed cyber attacks. The concern here is that the attacks seem to be widening quite a bit and are focused heavily on US infrastructure, utility, water, public transportation. And this is not, while I would say a new thing, the magnitude of these attacks have increased dramatically. And the U.S. government, specifically the FBI, has come out and made a very public statement that this will cause some level of disruption. There was specific talk about utility and air travel. So it's definitely something to be mindful of. For us as non-government

officials, I would say that to follow the same rules as always, be extra vigilant in anything that you're doing that is in a connected device. It's also a good time to ensure that you do have backups to things that you would do specifically online only. My example was, I think about two years ago, there was a Microsoft Teams and a Slack outage at the same time. And there were many large organizations that did not have backup means of communication. And individuals did not have phone numbers. They were reliant specifically on cell phones. They had no landline numbers.

They didn't have secondary means of communication. And in one case, there was an actual government agency that said that they had all had fax machines, but no one knew the phone numbers anymore. So it's just go ahead and pull kind of dust off your phone tree and make sure that you have it updated with phone numbers in the event that some of the services we use today go down. So for instance, if you had a Microsoft Teams, a Zoom, or a Slack go down, that you can go back to that regular phone number and call. There was specific reports around disruption for GPS and cell. These reports are, while alarming, are still very general. What I would say is that I've not seen the level of

attention from the federal government, specifically with the FBI. There's also a lot of European countries that are having similar warnings. We know that back a couple months ago we reported here on the podcast that there was a Microsoft exchange attack that was believed to be tied to the Chinese government. The Chinese government denied it and that was around infrastructure but that was really about emailing. One of the things that the FBI director specifically said is that they're most focused on public utilities and transportation from a safety standpoint. So this is a space we'll watch here. As I always say, we'll notify the group via the podcast and share whatever information that's valid that we can. One of the things I would say aside from dusting off those old phone trees and getting phone manuals up is just to make sure that some of your conditionery planning around disaster

recovery is up to date. I would argue that most of us based on COVID have pretty relevant and accurate plans, but sometimes the best laid plans that are heavily focused on technology need some of that good old basic communications. What would happen if you did not have your connectivity via email or Teams or Slack? What would happen if you had a cell phone outage? How would you manage that? Do you have a landline both at home and your offices? A lot of people don't anymore. Taking just an understanding of what precautionary measures

that you would need to do. And then as always, staying vigilant on standard protocols when it comes to cybersecurity, patching, updating, paying attention to those things and monitoring news and podcasts for information. I think one of the things I would say here is that this is more of a global alert of the hacking that's occurring, but I definitely think that it's something that you'd want to pay attention to. Not necessarily something you can control, but something that you'd want to pay attention to. Not necessarily something you can control, but something that you definitely want to be aware of. Switching gears a little bit to AI, we talk about AI every week,

so I think it's important to talk about it. Chat2PT's parent company, OpenAI, released last week a text-to-video application. It's called Sora. It was released in limited release, so there was only certain people that did get this, and actually around production, a lot of news media outlets got it.

And this is one of those things that I would say is a little bit eerie. You can actually type in a sentence and it will produce a video. So text-to-video is something that we haven't really seen a lot of. A big concern here during an election year is deepfakes. What are the abilities of these tools to trick people into believing something that didn't occur? My general rule of thumb has always been verify by calling or waiting for that phone call. Now you're really going to have to take the next level of verification and actually make sure that you're talking to the right individual.

This text-to-video piece is ahead of what I think we would predict at this point in artificial intelligence with generative AI. in artificial intelligence with generative AI. Some of the videos that are publicly available are not as easy to identify that they are made with AI and then others are obviously made with AI. But the interesting part here is you're taking generative AI, you're taking these models, and with very simple tech forms being able to create videos. Some of the videos that were created did depict

what I would say is celebrities just to test it out. This is to test it out, not to actually replicate anybody, but just to show what the capabilities are. This is one of those things in the generative AI space that we need to be aware of and understand what's the impact to us. I think for me and sitting in my seat, it's mostly politically driven and misinformation. That's what the concerns would be. The risk is we'll get to the point where people don't necessarily understand what it is that's occurring. I think that when I look at what I'm seeing, is there's a real, real challenge with being able to decipher what's real and what's not, and the information that is being moved around.

So something to definitely pay attention to and keep an eye on. But we will continue to report on AI. I don't necessarily think this is bad or good. It's just information. And I think that it's something that we're going to need to watch and then lastly i thought it was a really interesting story that i'd mentioned is it's girl scout cookie season um the girl scouts are expected to sell a billion dollars of cookies this year just think about that a billion dollars in cooking cookies and then in much like anything

else inflation has kicked in and there's between an 18 and 22% price hike on these cookies. So think through that this is a billion dollar industry this year. It's expected to have profit margins of close to 22%. I thought it was a really interesting story to end out the day to think about you know business and how all of us here in retail are selling things and then you have the Girl Scouts selling a billion dollars of cookies every year and it was a really interesting article that I read that said on average in order to meet that billion each Girl Scout has to sell around $600 of the cookies why am I talking about the podcast I thought the inflation piece of it was really interesting that's why I has to sell around $600 of their cookies. Why am I talking about it on the podcast?

I thought the inflation piece of it was really interesting. That's why I put it out there. And by the time you'll be listening to this on Thursday, then the week after, we will be at LPRC's Ignite and Innovate. So if you're there, please stop by and say hello. I'll be there. I'll look forward to seeing everybody. And with that, I will turn it back over to Reid. All right. Well, thanks so much, Tony, for all that information. And of course, Tom, there is a lot going on that we've

got to pay attention to. We've got wars. We've got a lot of antisocial behavior. We've got a lot of problems that are taking place clearly in the retail environment as a result of that and more. So at LPRC, we're dedicated to moving on. We've got our new team members. They spend good quality time training with us, helping us plan 2024. So we will update on everything that we can as soon as we can. So stay safe and stay in touch. Thanks for listening to the Crime Science Podcast presented by the Loss Prevention Research Council. If you enjoyed today's episode, you can find more crime science episodes and valuable information at lpresearch.org. The content provided in the Crime Science Podcast is for

informational purposes only and is not a substitute for legal, financial, or other advice. Views expressed by guests of the Crime Science Podcast are those of the authors and do not reflect the opinions or positions of the Loss Prevention Research Council.