28/11/2016

Just how big is the financial risk from telecommunications fraud?

Just how big is the financial risk from telecommunications fraud?

Just how big is the financial risk from telecommunications fraud?

Further Reading

2016 Fraud Reports

Get our full, free to download, Fraud Reports. Engage with us on Twitter using #TelcoFraud @smartIPX

Q3 Fraud Infographic

Share our easy to digest Q3 Fraud Infographic. Please use #TelcoFraud on Twitter and tag @smartIPX

Fraud Management

Learn more about our highly cost effective and scalable Fraud Mitigation solution, protecting your voice margins

Telecoms operators face an estimated global average loss of 13% or $294bn (USD) resulting from uncollected revenue and fraud according to a 2016 Neural Technologies survey.

More than 100 telecoms fraud experts completed the Global Telecoms Risk Management Global Survey which found regional variations in the cost of telecoms fraud and which we have touched on in our Q3 2016 Fraud Report.

Hard revenue losses – such as external fraud, bad debt and internal fraud – totalled 6.9%, (equivalent to approximately $155bn) with missed revenues, for example sub-optimal call routing, poor processes and incorrect data usage, accounting for the remaining 6.2% ($139bn).

But just how widespread is telecoms fraud and what, if anything, is being done to combat it and how do companies deal with the other financial costs which may come alongside it?

In October 2016, UK communications company TalkTalk was fined a record £400,000 by the Information Commissioner’s Office for poor website security which led to the theft of the personal data of nearly 157,000 customers the previous October. The ICO’s in-depth investigation found that an attack on the company could have been prevented if TalkTalk had taken basic steps to protect customers’ information.

Also in November 2016, UK police arrested three people in connection with another data breach at mobile network provider Three Mobile. The Daily Telegraph reported that hackers successfully gained access to Three’s customer upgrade database using an employee login. They then used the login to trigger bogus upgrades for premium smartphones – with the aim of intercepting devices before they reached customers.

Digital data protection is critical

These two incidents, while different in nature, show how critical it is that any data being sent digitally, or being stored digitally, is protected and how having the right mechanisms in place to detect unusual activity can help mitigate against fraud and the financial implications of it.

As has been the case in the past, these kinds of data breach usually lead on to identity theft and, also more relevant to our interests, the devices are often then used to help perpetuate other forms of telecoms fraud, including PBX Hacking, International Revenue Share Fraud (IRSF) and Arbitrage.

Managing VoIP fraud

At SmartIPX our focus is on managing VoIP fraud but we understand the greater impacts of fraud across the Telecommunications sector which can result in devastating effects on your margins and reputation. Our recent case study with the Imagine Group gives one operator’s perspective on the effects of telecoms voice fraud.

When it comes to digitally transmitted data, such as VoIP, the financial implications of fraud remains a concern. But, due to a number of processes – including greater collaboration between carriers and organisations such as the i3Forum – these numbers are falling. The latest CFCA report in 2015 showed annual losses to carriers had fallen by 18% to $38.1bn in the two years since its previous survey. One of the other reasons given by the Communications and Fraud Control Association as contributing to this overall reduction in money lost globally is machine learning and the smart use of data.

Machine learning and smart use of big data helps

Machine learning, such as that being developed by SmartIPX partner Cataleya, has become an increasingly important tool in the fight against telecoms voice fraud. At SmartIPX we deploy Cataleya’s Orchid One Network Session and Application Manager, (a highly advanced evolution of a Session Border Controller), on behalf of our customers.

Orchid One provides real-time reporting which is used to correlate data with past network patterns to display current business/network performance and predict future requirements. However, it is also able to identify traffic anomalies and fraud trends and this agile and responsive way of monitoring – 24/7 by our team of FTE engineers and technicians – which means we can not only offer advanced QoS and QoA but also effectively work to mitigate the risks for our customers and their clients.

Only continued vigilance, combined with investment in the best technology and improvements in processes and the consistent training of an agile, responsive team, will result in further falls in the financial cost of telecoms voice fraud.

What end users can do to help combat telecoms fraud

What end users can do to help combat telecoms fraud

At SmartIPX, we help you to Fight not Facilitate this type of fraud so you don’t have to be worried about the impact VOIP fraud will have on your business. We have built our domain expertise helping to meet the needs of service provider partners.

Our service is designed:

  • To allow our clients’ customers to continue making calls
  • To protect your customer relationships
  • To minimise the risk of fraud and therefore margin loss.

Fraud Reports

Get our full, free to download, Fraud Reports. Engage with us on Twitter using #TelcoFraud @smartIPX

Further Reading

Q3 Fraud Infographic

Share our easy to digest Q3 Fraud Infographic. Please use #TelcoFraud on Twitter and tag @smartIPX

Fraud Management

Learn more about our highly cost effective and scalable Fraud Mitigation solution, protecting your voice margins

Q3 Fraud Report

Get our full, free to download, Q3 Fraud Report. Engage with us on Twitter using #TelcoFraud

Further Reading

Q3 Fraud Infographic

Share our easy to digest Q3 Fraud Infographic. Please use #TelcoFraud on Twitter and tag @smartIPX

Fraud Management

Learn more about our highly cost effective and scalable Fraud Mitigation solution, protecting your voice margins

Company News, Fraud, P.Tindley , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *