Tackling telecom fraud in the 5G era
5G is revolutionising the telecom sector with high-speed connectivity and new opportunities for customers to stay connected. However, this revolution comes with potential threats and vulnerabilities in the form of sophisticated telecom frauds resulting in revenue leakage and losses for the telecom companies. These threats and vulnerabilities call for enhanced telecom fraud management and prevention through telecommunications revenue assurance.
The impact of telecom fraud
Telecom fraud is one of the telecommunication industry's greatest challenges and impacts both the telecommunication service providers and their customers. Telecom frauds involve misusing or abusing telecommunication services and products to illegally acquire money from either the telecom service providers or the customers. In 2021, telecommunication companies lost approximately $39.89 billion (around 2.2% of the global revenue) to telecom fraud and revenue leakage. This is a 28% (approximately $11.6 billion) increase in losses compared with 2019.
This increase in telecom fraud losses is because of the rise in targeted social engineering schemes, involving use of stolen credentials obtained through data breaches and the use of online portals to avail telecom services. Moreover, fraudsters are also exploiting weaknesses in voice-over-IP technologies and leveraging the recent uptake in voice and data traffic to steal more money since the outbreak of the COVID-19 pandemic.
Some of the most commonly reported telecom fraud methods in 2021 include Wangari fraud, smishing (or SMS phishing), subscription fraud, PBX hacking, account takeover, and SIM jacking (or SIM swapping). International revenue sharing fraud (IRSF), traffic pumping, telecom arbitrage fraud, and interconnect bypass fraud were among the top 10 telecom fraud types reported in 2021. Many of these frauds are evolving to incorporate sophisticated technologies and can circumvent current countermeasures adopted by telecom companies. This calls for a change in the approach from telecom companies towards fraud and to promote revenue assurance.
The need for real-time revenue assurance
The traditional response of telecom companies towards telecom fraud is reactive and slow and is focused on identifying revenue losses instead of proactively identifying and eliminating the fraud in real time for revenue assurance. This has worked in the past as telecom companies have been able to absorb these losses as they were insignificant compared with the annual revenue (approximately 2.2%).
However, such an approach demands rethinking with the emergence of innovations such as OTT services, 5G and IoT, and customers' focus shifting from calls and SMSs to data services. Although these innovations have opened numerous business opportunities, they have allowed fraudsters to overcome conventional countermeasures and commit sophisticated telecom frauds.* Responding to these threats requires much more than the traditional revenue assurance system and reliance on historical data to detect revenue loss.
With 5G technologies set to double their importance and adaption over the next three years, it is high time telecom companies invest in a real-time system for revenue assurance to battle revenue leakage and losses, with the latency standards shrinking from 250 milliseconds to 10 milliseconds. A real-time revenue assurance system can allow telecom companies to identify potential telecom frauds in action and trigger appropriate countermeasures swiftly in the 5G era. A new real-time revenue assurance system can improve telecom fraud management and prevention and allow telecom companies to restrict revenue leakage and losses.
How can Infosys BPM help?
Infosys BPM offers telecom fraud management and revenue assurance solutions to global communication service providers. Three key services offered by Infosys BPM are Revenue Assurance and Fraud Analytics, Assessment Services and Automation, and Digital Fraud and Revenue Assurance Operations.
Telecom service providers can leverage these services to identify and eliminate telecom frauds and revenue leakage within their networks and ensure near-real-time monitoring to increase revenue assurance and fraud coverage by 100% in the high-speed 5G environment. Leverage the advanced analytics, years of expertise, and round-the-clock revenue assurance and fraud investigation support from Infosys BPM to prevent telecom fraud in real-time, protect your revenue, and prepare yourself for the fast-paced and innovative 5G era.
*For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive yet modular suite of services is doing exactly that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.