It is difficult to find a reliable number of gold shops in Thailand or specifically the gold shops in Bangkok. One Internet source put the number at 6,000 gold shops in Thailand. I’d venture a guess there are at least a couple of thousand gold shops scattered throughout Bangkok. And China Town along Yaowarat Road is gold shop Mecca. There are 2,170 bank branches in Bangkok according to the Bank of Thailand and 405 sub-branches of banks in Bangkok.
The above statistics show how Bangkok dominates the banking industry by centralizing it in Bangkok. But that is another story. This essay is about robbers.
An American bank robber Willie Sutton is alleged to have said in reply to a question of why he robbed banks, “That’s where the money is.”
Thai robbers also know that gold shops are as good as gold when it comes to a robbery. Gold shops, along with banks, are a natural target for robbery. This makes it natural to ask a few questions:
1) Is there a serious problem of robbery of gold shops and banks?
2) What security precautions do gold shop owners and bank branches use to protect their staff and inventory against robbery?
3) What role does the new technology play in improving security?
4) Have traditional security jobs been disrupted by the new technology?
Is there a problem?
According to one report in the Bangkok Post (which gives no statistics to support the claim), gold shops have become a high-profile target and the robbers are running off gold worth in excess of one million baht. The police, it is reported, have made little headway in solving these robberies. That is alarming on the face of it. Until you read the lead story in the same edition of the Bangkok Post stating that between August 2013 and July 2014 there were a total of 5 gold shop robberies (4 banks were robbed during the same period). I don’t know about you but the robbery of five gold shops out of several thousand and four banks out which operate thousands of branches qualifies as a rounding off error.
It amounts to low probability of any one gold shop or bank being robbed over the course of a year. Of course, if it is your gold shop or bank, the robbery is hardly insignificant. Like lightning, when it strikes, it can cause considerable damage, and that is why landowners buy insurance. It’s also why gold shop owners buy insurance. Some in the insurance industry can set me straight, but I suggest that the premiums paid for robbery and theft insurance were increased based on the 5 gold store and 4 bank robberies reported during the one-year period. Only one arrest was recorded for each category: one gold shop robber and one bank robber.
That’s 20% and 25% clearance respectively of the caseload. In the other 80% and 75% cases, the police, one presumes are still looking for clues. With a total of 9 robberies in one year an observer might conclude this falls below the threshold of a crime spree. The police low success rate supports the Bangkok Post theory that these are well-planned heists, unlike the convenience store robberies committed by drunken teenagers who live in the neighborhood and act on an impulse. Robbing a neighbor when you are drunk is bound to cut down on your odds of getting away with the crime.
A senior police officer was quoted as saying gold shops are the hardest nuts to crack. Certainly compared to the convenience store robbery, which is a nut with a very soft shell.
We can conclude that, in the scheme of things, gold shop and bank robberies are a minor part of the crime industry operating in Bangkok and elsewhere in Thailand.
What security arrangements are used by gold shop owners?
I’ve written about the poor pay of the police in Thailand in an essay titled The High Cost of Badly Paid Cops. Many rank and file Thai cops work a second job to make ends meet. One of the popular moonlighting gigs is working as a security guard in a gold shop. For many years, you could walk past a gold shop in the main shopping areas along roads such as Yaowarat, Silom, or Sukhumvit and spot a uniformed Thai police officer through the window. He (I never saw a female cop working in a gold shop) appeared inside the shop, usually seated on a chair, looking bored.
The use of regular police officers rests on two premises: 1) the presence in a gold shop or bank of a uniformed cop, a gun strapped to his hip, means only the most hardened and determined criminal are expected to rob the place; and 2) there is a ready supply of police willing to act as security guards as they are underpaid. With enough of the security moonlighting jobs for lowly paid cops, it takes the heat off the politicians to increase police pay. The authorities can factor in the second-job income received from the security detail and conclude that overall the average cop is able to get by. In the traditional system, everyone benefited. The shop owner from enhanced security, and the government in underpaying the police.
What role has new technology played in disrupting the old arrangements?
Two things have happened.
CCTV cameras became cheap, reliable and robbers except for the total morons know that gold shops and banks have cameras recording everyone coming in and out. The thing with CCTV cameras is they work 24/7, they never get tired, bored, or read newspapers. They aren’t fitted out with guns (wait five years for that development), which deter robbers, though may also terrify some customers. A terrified customer is less in the mood to buy gold.
Point the finger in the direction of the Internet. The trail of disruptions mostly leads back to new technology and the use of the Internet. CCTV cameras can be linked directly with police stations. Why continue to employ human security guards when CCTV cameras can do the job cheaper and better?
The disruption of the security job sector in gold shops and banks
Most employment sectors are bleeding jobs. It started with ATMs, an easy way to do banking without joining a queue. This trend line will only become worse over time for bank employees. Computers and robots can simply do the work cheaper, longer, better and without expecting a bonus at New Years. Gold shops and banks are in the business to keep costs low, revenues increasing, and profit margins high. In the cold-blooded, rational world, security guards are a cost to be measured against the costs of alternative methods of providing security. If the costs of new technology plus the insurance premium paid to insure against theft and robbery are lower than the wages and benefits paid to an off-duty police officer, doesn’t the capitalist mind conclude—no more security guards. Money is saved. Profits go up. Shareholders are rewarded with higher dividends.
If the premiums on the insurance are low, then the cost to the bank for a robbery is not the money stolen, but the premium paid. It’s like health insurance, you have a heart attack, and the insurance company pays the cost. But if you are in good health the premium is low and the probability is you won’t have one. That’s why insurance companies become rich. We overestimate the probability of something bad happening because we read about someone who died of a heart attack, or we read about a plane crash, or a bank robbery. We suddenly feel vulnerable. It’s irrational. And business is there to take money from irrational people who want protection.
This didn’t stop a senior Thai police official from telling the Bangkok Post that Kasikorn Bank’s robbery record (it is not clear how many of the 4 bank robberies occurred at a Kasikorn Bank branch) happened because the bank failed to hire security guards. As the police are mainly the ones hired as security guards, one would expect a senior cop to take that position. He’s looking after the welfare of his men and packaging it as the welfare of the bank. That sleight of hand is normal in such circumstances.
A senior vice president of Kasikorn Bank agreed with this official assessment. It seems that the bank hadn’t employed security guards at its branches because it feared clashes between the guards, thieves and customers. That’s an interesting scene in a movie. A shoot out in the bank as guards and thieves and customers trade gunfire. Though there was no evidence this has happened in a bank or gold shop in the immediate past. Still, it makes you understand how fear drives corporate policy when it comes to security and worst case scenarios are used to justify an expense.
The possibility of a shootout, however improbable, raises another point in the disrupted banking employment world. It’s not just that security guards are no longer needed, most bank employees are in the cross-hair of losing their jobs. It’s called internet banking. Which of course raises another issue: in the past customers had no choice but to go in person to a branch to transact business, but with online banking most transactions can be conducted on line.
What has the bank decided? To hire security guards for its 1,000 branches (this number of branches isn’t consistent with the Bank of Thailand numbers, but that is, likely a mistake in the report or another story). That’s good news for the moonlighting police. It is good news for the Thai taxpayers who won’t worry the officials in charge will seek a tax hike to pay higher salaries to the police. Instead that money comes out of dividends paid to the shareholders of the bank. I am certain the shareholders will be happy to subsidize police salaries. When it comes time to layoff tellers, it will be interesting to revisit this issue and find out as compensation is fought over amongst the dwindling staff, whether robbery is the least of the problems faced by an industry in the midst of major disruption.