Security Versus Convenience

On today’s show we are talking about the tradeoff between security and convenience. Your phone is a device that has so much knowledge about you embedded within it. 

How long before the very devices that we rely upon to act as our communication device, our camera, our entertainment screen, our wallet, and the key to unlock the entry door to our home becomes too much of a liability?

The epidemic of identity theft has been problematic for some time. It used to be the case that identity theft could allow someone to get a credit card in your name. 

So the question is what do you as a real estate investor need to know to protect your properties? How do you prevent someone from entering a building who is not authorized to do so? 

Smart building systems are extremely convenient. But are they secure? How do you perform the evaluation to know whether you are buying the right system? 

These are more questions than answers. Even if you have an answer today, who knows whether the answer will still be correct in a year or a month or a week from now. The capability of AI systems is growing at an exponential rate. 

-----------

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Episode Transcript

(00:02):
Welcome to the Real Estate Express, a podcast.
Your morning shot of what's new in the world of real estate
investing. I'm your host, Victor Minash.
On today's show, we're talking about the trade off between
security and convenience. Your phone is a device that has
so much knowledge about you embedded within it.
How long before the very devicesthat we rely upon to act as our
communication device, our camera, our entertainment

(00:24):
screen, our wallet, and the key to unlock the entry door to our
home becomes too much of A liability?
The epidemic of identity theft has been problematic for some
time. Used to be the case, identity
theft could allow someone, maybeto get a credit card in your
name. So the question is, what do you
do as a real estate investor? What do you need to know to

(00:44):
protect your properties? How do you prevent someone from
entering a building who's not authorized to do so?
Electronic building access is usually permitted through one of
several means. It could be through a four digit
code, an RFID card or a fob, electronic authentication with
an app running on a smartphone, or the good old fashioned way

(01:05):
using a physical key. All of these systems have the
potential to be compromised. People can share A4 digit code
to the wrong person. Someone can copy a metal key, an
access card and a smartphone. They can be stolen.
There's several lines of defensethat are important.
Number one is preventing unauthorized access, but #2
maintaining enough evidence to identify a criminal after the

(01:28):
fact if they happen to get through.
The method that provides access to the building should be
separate from the method that provides access to individual
apartments. If the perimeter of the building
is compromised, we don't want that same individual to
automatically gain access to a unit.
When we think about smart building access, we want to
ensure that residents feel safe,and that feeling of safety is in

(01:49):
fact not just a feeling, but supported.
In reality, there's a lot of newproducts entering the market.
When it comes to electronic access, many of these companies
have a very short time in the market.
When you make an investment in abuilding, the life cycle of the
building is measured in decades.You don't want to face a
situation where a lock fails andthe company that supplied them

(02:10):
is out of business and you can'tget replacement parts.
This is why it's important, at least in my opinion, to stick
with a few of the larger mainline suppliers who have a
sufficient installed base and longevity in the market that you
can count on them to get parts for years to come.
Even then, you'll want to carry an inventory of spares to have
replacement parts on site since lead times can never be

(02:31):
guaranteed now. In the old days when a tenant
moved out you would hire a locksmith who would have the
lock re keyed in time for the new tenant to arrive.
While those days are over, someone with the phone combined
with facial recognition could provide enough security to
ensure the phone doesn't get compromised.
That's a form of two factor authentication that can reduce
the risk. Then we're seeing AI generated

(02:54):
likenesses of real people that are incredibly realistic.
It's fair to say that you can nolonger trust what you see.
AI generated images, especially defects, and these highly
realistic synthetic faces, do pose a significant and growing
threat to some smartphone facialrecognition systems, though the
most advanced systems didn't have implemented some

(03:15):
countermeasures to mitigate against this.
These images are a threat because AI can create incredibly
realistic and convincing facial images and even short videos
that are indistinguishable from real photos or videos to the
human eye. Some facial recognition systems
look for facial movement that a static image can't mimic.
But AI is increasingly able to generate animation of facial

(03:36):
features like little muscular twitches that can fool humans,
and they can also fool a facial recognition system.
These are some of the most effective countermeasures.
Systems like Face ID use specialized hardware.
They create a detailed 3 dimensional depth map of your
face. A flat AI generated image or
video lacks this crucial 3 dimensional depth information.

(04:00):
Some use infrared imaging. Capturing an infrared image of
the face can reveal details likeskin texture and subtle heat
signatures that are difficult toreplicate with an AI image.
There are techniques to analyze subtle involuntary facial
movements, eye blinks, little twitches, changes in facial
expression that are characteristic of a live human

(04:20):
being. Although AI generated images are
increasingly able to replicate those small, nuanced movements,
some systems require the user tobe looking directly at the
phone. Combining facial recognition
with other biometrics like fingerprints or some kind of
password would potentially add another layer of security.
Fact is, in the world of AID fakes, security of your

(04:42):
buildings and apartments could be increasingly in question.
If someone breaks into your building and harms A tenant,
what is the liability to you as a landlord?
Will your insurance cover such alawsuit?
In a name peril policy, it's almost guaranteed you're not
going to be insured. Smart building systems are
increasingly prevalent, and they're extremely convenient.

(05:02):
But are they secure? How do you perform the
evaluation to know whether what you're buying is the right
system? These are more questions than
answers, and even if you had theanswer today, who knows whether
that answer would still be true in a year or a month or a week.
The capability of AI systems is growing at an exponential rate,
something you want to perform significant due diligence on.

(05:24):
As you think about that, have anawesome rest of your day.
Go make some great things happenand we'll talk to you again
tomorrow.