Telecommunications networks have helped individuals, businesses, communities and nations evolve rapidly. However, a dramatic digital transformation has swept enterprise communications in recent years. This transformation has been further accelerated during the pandemic, and has also brought significant challenges to telecoms service providers and operators. Telecoms fraud is one of the most severe among these, not just because of the financial implications, but also due to the long-term impact it can have on the reputation of their brands.
Gavin Stewart, Vice President of Sales at Oculeus, a provider of advanced software tools for the telecoms industry, says, “Cybercriminals and fraudsters use the latest state-of-the-art technologies to execute financially damaging telecoms fraud attacks.”
“Fraudsters employ AI technologies to continuously refine their attack strategies in order to evade detection and bypass traditional anti-fraud approaches implemented at telcos and enterprises,” he adds.
Telecom fraud leads to reputational damage
The financial impacts of telecoms fraud are well-documented. Unfortunately, telecoms fraud is currently one of the most profitable forms of cybercrime and is relatively easy to execute. As per the Communications Fraud Control Association (CFCA) – Fraud Loss Survey Report 2021, total amount of telecom revenue loss due to fraud is estimated to be $39.89 Billion in 2021 alone. Enterprise Voice over IP (VoIP) is among the most vulnerable channels for modern telecom frauds, whose current threats include robo calling and call flooding, international revenue share fraud (IRSF), call hijacking and much more. As VoIP networks expand, the attack surface also expands, making more providers and users more vulnerable to such fraud attacks. There are often instances where the business customer is aware of the fraud, but can do nothing to avoid the financial consequences.
But what about negative impacts to the brand? In today’s competitive world, maintaining the reputation of the retail brand is important than ever, especially in the telecoms industry. Negative publicity can restrict growth and even uproot the entire business in just a few days. Shareholders can turn hostile as they realize the company fails to implement proactive measures to avert such scams. Lawsuits arising from data violation or security breach can bring financial loss to the tune of millions of dollars.
In an example from a parallel industry, Crypto.com recently suffered a security breach in which hundreds of customer accounts were hacked. Crypto.com is a growing cryptocurrency exchange and in recent months has been investing in developing its brand in the US. The company recently launched an online campaign with a well-known Hollywood star and initiated sports-related sponsorships in southern California.
The analyst firm OXT Research estimates that this security breach caused up to $33m in financial damage. At the same time, TechCrunch suggests that the brand damage from this attack threatens to stall the company’s expansion in the US.
The B2B brand is equally affected. The sphere of wholesale partner relations, wherein telcos and service providers form a crucial trading ecosystem to support operational activities, can also be negatively impacted. Partner disputes can arise from multiple angles to affect the stability of the business.
Wherever fraudulent traffic is present in the traffic flows, it will commonly trigger objections from wholesale customers, who may have a contractual right to raise a dispute and seek redress. Since such disputes are onerous, time-consuming and welcomed by nobody, negative brand connotations quickly flow down to the carrier responsible; in a highly competitive wholesale marketplace, nobody wants a reputation as a ‘supplier guilty of carrying fraudulent traffic”.
Oculeus protects brand reputation
The negative impacts associated with telecom frauds are immense and often difficult to quantify. However, by implementing the right fraud prevention systems and measures, all these negatives can be turned into positive opportunities.
Oculeus has designed a broad portfolio of telecom solutions that leverage advanced AI to help service provider and network operator customers better manage their business and network operations with high levels of accuracy and automation. The company’s telecoms fraud prevention solution use AI technologies and anomaly detection techniques to provide a modern and automated approach to preventing telecoms fraud.
“The presence of AI means that our software tools are in a continuous ‘learning’ mode. The person operating the software will set in motion a process of defining what represents ‘normal’ or ‘abnormal’ activities,” explains Stewart.
“This is common for anti-fraud solutions that follow ‘rules’ based analysis strategies. However, fraudsters are skilled at disguising their activities in ways that outwit this rather crude approach. So the Machine Learning takes the next step forward as it continuously analyses huge amounts of system data in real-time to find patterns that may be too subtle for a human being to notice, and also make associations based on insights learned from past cases that a human could potentially mimic, but only assuming weeks or even months of laborious effort,” continues Stewart.
“In this way, Machine Learning makes meaningful connections incredibly quickly to help telecoms operators ‘meet fire with fire’ in their defensive activities against AI-based fraudsters,” he says
By adopting these advanced fraud prevention measures, telcos can drastically improve customer satisfaction and build loyalty. At the same time, wholesale customers will see increase in traffic as MVNOs tend to stay loyal to the host. With good fraud prevention practices, net promoter score (NPS) can be improved and brand reputations and values also grow higher.