How is inflation linked to rising rates of criminality, and what should your organisation do about it?
Throughout history, periods of economic downturn have coincided with increased rates of criminality. With inflation ballooning across the Global North and an imminent recession expected, your security department can expect to end up on the sharp end of this relationship to some degree.
The dynamics of the link between economic depression and criminality are not as basic as it may seem. Interestingly, statistical analysis shows that the Great Recession of 2008-09 bucks the historic precedent seen across western Europe and the USA for the past 100 years. But what does this mean from a criminology perspective? Clearly it is not as simple as people having less money and therefore being motivated to commit property crimes.
Further analysis shows that it is specifically high inflation, net of other economic conditions, which is linked to increased criminality, which was not a characteristic of the Great Recession. The latest research has put this down to the increasing demand for low-cost stolen goods during times of dramatic price rises. Somewhat surprisingly, increases in violent crime are due to people selling stolen goods in unregulated criminal markets outside of state and police protection. For example, shoplifters and employees stealing from businesses are not likely to experience violent resistance when committing crime, but they risk attack by violent criminals when selling the goods.
Hackers have costs too, and so cyber-crime cannot be discounted. Financial impacts of cyber-crime have been estimated at $600bn in 2019, around 1% of global GDP, and publicly reported ransomware attacks went up 17% in 2021. Not only have attacks increased, but they have also become more damaging. Hackers are getting smarter changing who and how they attack. Smaller companies with weaker security are getting targeted more, and the attacks are timed during weekends and holidays when the capacity to manage the incident is at its lowest. Furthermore, attackers are targeting entire supply chains, rather than a single entity, to increase the impacts.
So, how should security functions respond to the changing threat picture? It comes down to a combination of planning, stakeholder engagement, and security training and awareness.
Planning
As with any material change to threat level, there will be a impact on risk. Changes in risk level on the ground should always be followed by a revision of security risk assessments. Key elements to focus on will be the threat assessment and vulnerability analysis. Understanding the nature and scale of threats you face will help develop a more accurate understanding of the likelihood of risk events. Engage with sector literature and law enforcement bodies to build more detailed knowledge about how threats are carrying out attacks. In combination with the vulnerability assessment, this will highlight any potential gaps in existing security systems and allow you to take actions to ensure they are commensurate with risks on the ground.
Stakeholder Engagement
It is a simple, if obvious, fact that security risk events are contingent on an adversary threat. Whilst it is difficult to motivate an individual away from criminal tendencies, the key question for your security department should be how to deflect criminals away from attempting attacks against your organisation. Stakeholder mapping and engagement is a key tool to achieving this. Build an understanding of the political, socio-economic and cultural factors which are most influential on the lives of those most affected by your business. These could include employees and neighbouring communities and businesses. Having this knowledge will allow you to better predict and prepare for upticks in criminality by understanding the factors which can unsettle your stakeholders and lead to instability and criminal motivations. Furthermore, it will help you identify key areas to target community investment and projects to build a more resilient stakeholder network. Not only can these actions help you understand and support your stakeholders, but they will also build trust between your organisation and its stakeholders. Trust and goodwill are key currencies for reducing criminal motivation against your organisation, helping reduce the scale and scope of potential attacks and adversaries.
Security Training and Awareness
As the old security adage goes, security relies less on the strength of fortifications than the state of mind of its inhabitants. Individuals across your organisation, not just in the security department, should understand the security risk portfolio and feel equipped to manage the elements which relate to their roles and responsibilities. Reinforcing the importance of your employee’s contributions to security, such as by involving them in the risk analysis process, will empower individuals to act more vigilantly during their day-to-day activities. This is particularly important for cyber security; IBM estimate that 95% of security breaches result from human error. Supporting awareness campaigns with risk-specific training relevant to their role will facilitate employees acting more surely. The security benefits of this combination cannot be understated.
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Telephone us on: +44 (0)207 730 5446, or email us at: london@hendersonrisk.com
