2023 Security Risks - A Look Ahead

January 9, 2023

In August we blogged on the trending issues in 2022, and by all measures the expectations have been met, and we have seen more disinformation, election issues, public safety challenges, and additional violence in society due to socio-economic issues. Some of these will likely continue into 2023, but there are new risks on the horizon as we move into the new year.Here are the key strategic and near future issues we are monitoring at Red Five as we enter 2023, and some suggestions of what you can do to get ahead of any concerns for the protection of your company, your clients, your families.

Three Strategic Issues to Monitor in 2023:

  1. Ukraine/Russian War accidental spillover into Europe – As 2022 closes we are seeing both increased asymmetric moves by Russia in Ukraine and Europe, and the addition of more sophisticated (and likely provocative) weapons systems into the Ukraine theater by western powers. Russia continues to use disinformation campaigns, propagation of para-military group activities, and the fomenting of violence through mail, improvised explosive devices, and protests across Europe and into Africa. These asymmetric efforts in countries that support Ukraine are a strategically weak but locally effective means of stirring unrest, doubt, and fear. The addition of more advanced over-the-horizon / precision weapon systems increases the likelihood of conflict between Russia and US advisors/NATO forces that are collocated with Ukrainian forces, or are otherwise associated with these systems. Many in the intelligence community believe Russia is not spoiling for a fight with the US/NATO, nor are they looking for a reason to use nuclear weapons – but their activities relative to the above factors could amplify the likelihood of an accidental escalation and hot war with NATO.
  2. China/Taiwan Watch out for continued probes and potential for accidental escalation in Cold War Part Two. As the US and China continue to square off over trade, human rights, geopolitical influence, and Taiwan, the world can expect an extension and perhaps escalation in the cold war across the pacific. As we did against the U.S.S.R. in the second half of the last century, so will we continue to similarly “engage” in the Taiwan Strait and over the island of Taiwan. China continues to conduct aerial and maritime probes of Taiwanese defenses and operates a global effort of disinformation, cyber-attacks, and national surveillance over its people (at home and abroad). While China has patiently, and intently monitored Russia’s folly in Ukraine, they are not letting up on their regular testing and penetration of Taiwan’s air defense network.
  3. Crypto fallout and reorganization – The collapse of FTX and recent charging of the founder with wire fraud, securities fraud, money laundering, campaign finance fraud, and various counts of conspiracy gives the US government and others a chance to exercise how incidents in the crypto market will be addressed by governing bodies. More specifically, we will see how a fraudulent effort in crypto investing has had cascading effects relative to other investment instruments and markets. None of this is to say that investors shouldn't necessarily invest in crypto. Regulation isn't necessarily a bad thing. What we would suggest is to do your homework, and make sure that any crypto investment comes with the proper security controls around your accounts. Remain vigilant as crypto scams are common. Finally, call us if you think you're unprotected and need help to build the right safety parameters around your digital assets.

Three near future issues to address immediately in 2023:

  1. Increasing violence in bespoke HOAs or affluent neighborhoods – We have seen, and are continuing to see an increase in home invasions, armed robberies on the street, and a struggling public safety response to same. The most prolific criminal spikes being in affluent San Francisco Bay Area neighborhoods, Chicago northern suburbs, areas outside of New York City, and in the more urban areas of Washington, D.C. and Atlanta. While having the best intentions and responding as fast as possible, public safety departments continue to struggle with staffing, speed of criminal incidents, and deploying the latest technology to help with investigations and community policing. Furthermore, gated communities do not always mean safe and secure and have also experienced intrusions, break-ins, and negative impacts to residents and their Home Owners Association (HOA) brand. To round out the concerns, it’s not only physical vulnerabilities that must be addressed as HOAs seek to reduce their liability for cyber security of their systems, data breaches, and loss of personally identifiable information (PII). Those HOA boards and families in affluent neighborhoods must continue to be vigilant, stay ahead of criminal trends, leverage neighborhood watch, hire experts, and liaise regularly with local law enforcement to maximize communication. Red Five is currently providing new clients in this space with solutions and privacy protection subscriptions.
  2. Persistence of cyber threats, AI-enabled spear-phishing – While “cyber” will be on our radar for the foreseeable future, the addition of Artificial Intelligence (AI) and Machine Learning (ML) capabilities to criminal enterprises will be a rising threat starting in 2023. Humans remain the weakest link in secured systems. Focused attempts using these new technologies to socially engineer security breaches will continue to evolve, and potential victims (both business and personal) must endeavor to stay ahead of the adversaries. As this year’s trend manifests families of all levels of affluence will need to get help as fending off the privacy and digital threats is no longer sustainable by the individual. After attending a recent Red Five Privacy Summit, an attendee stated, “I have realized that this [protecting the identity and online information of his family] is now a full-time job, and I can no longer do this alone. I need Red Five.”
  3. Corporate IRS Part 132 Independent Security Assessments By hiring an independent consultant to conduct a third-party security assessment that articulates the threats, and makes security recommendations to corporate management, corporations can use the Part 132 Assessments to apply the correct treatment to executive compensation as it relates to security expenses as fringe benefits. Corporations are smartly getting ahead of these issues, staying compliant, and avoiding undesired inquiries from the IRS. It is important to complete a new Part 132 Independent Security Assessment if corporate leadership changes, the founding CEO moves to the Board, or if the corporation hasn’t completed a part 132 Security Assessment in recent past. Red Five conducts IRS Part 132 Independent Security Assessments for Fortune-listed companies regularly.  When was the last time your corporation completed an independent security assessment for your leadership?

Five Recommendations:

Much like with our personal health, understanding any family issue is important. As you cannot apply proper remedies to health concerns until they are diagnosed; knowing your family’s physical and cyber security risks before they become active crises is responsible, smart, and helps you protect what matters most. Be proactive and get a holistic assessment of your family’s security posture from Red Five today.Adopt a culture of resiliency. Considering all that’s going on in the world geopolitically, global health concerns, and supply chain challenges, it’s absolutely critical that your family and your business adopt a culture of resiliency. Things are going to be dynamic in the coming year – and things could change very quickly. With little to no notice corporations could find themselves or their supply chains embroiled in a spillover hot war in Europe or Taiwan, or in the middle of a asymmetric cyber exchange with dramatic indirect effects. Corporations and boards should be ensuring their business continuity plans are updated, and have been properly tested. Families and small businesses can also get ahead of unexpected events by refreshing their supplies, updating their evacuation and communication plans, and firming up relocation sites. All of these actions are a result of a mindset of resiliency, instilled by leadership and executed by a team ready for the unexpected.Bring in help when you need it. Don’t wait. Some say time is money, and sometimes time is the difference between success and failure. Whether you are a victim of a crypto scam, there has been a data breach, or you or your company are receiving cyber threats – get help fast. A timely and effective response can reduce the risk and bring peace of mind; and, often avoids a longer, resource-devouring crisis. Contact Red Five promptly if you need help with risk management for your family or your company.You have a problem. We have the analyst. Sometimes a corporation knows it may have a problem but does not have the resources to analyze the issue so it can be fully understood, and therefore properly resourced. Without having to hire a full-time employee (or several) Red Five can help analyze the problem, and give corporations enough information to make good decisions with timely, tailored, and actionable deliverables. With its robust analytical talent and technology, Red Five responds quickly to corporate clients’ analysis needs with outsourced, customized subscriptions to our analyst services and solutions.Mindset of survival, growth, and positivity. With a dynamic environment, persistent threats, and states of constant readiness it is imperative to maintain a positive mindset, where survival isn’t an option, but the objective. Growth and positivity will always win the day – especially when co-workers, or even poor leadership are focused on the negative, or are busy espousing catastrophic thinking. There is always a way out of a bad situation, there is always a positive side – but choosing to maintain a survival mindset is a powerful choice for anyone in the face of fear, unknowns, disruption, or competition.Stay safe out there – all the best to you and yours in 2023!

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