CSG’s Finn Kornbo, director of strategic product management for digital wholesale, shares his perspective on how operators can protect their bottom lines and keep their reputations in good standing by preventing fraud before it reaches the customer.
Fraud can be a pervasive and costly issue, a fact the ICT industry knows all too well.
According to a recent CFCA study, fraud losses accounted for approximately R411 billion, or 1.74 per cent of total revenue, in 2019.
The fraud issue is even more pressing in Africa. There is a higher termination charge rate when compared to the rest of the world – typically up to R2.94-4.41 per minute.
As a result, there is a great incentive in Africa to illegally bypass higher termination charge rates by using a SIM box or other methods.
International Revenue Share Fraud (IRSF) is also a problem for traffic streams originating or ending in Africa.
In this scenario, fraudsters make artificial calls to the region while also getting a higher pay-out.
False Answer Supervision (FAS), another common fraud tactic, involves false answers through short-stopping, early answering pre-charged calls, and a late disconnect for post-charges.
Combatting Telecom Fraud
The current status quo involves a manual approach to fraud detection, and there are many ways that bad actors can sidestep manual safeguards.
To effectively combat fraud, the best approach is to combine automated active and passive fraud detection methods.
Passive monitoring involves real-time detection while active includes setting up dedicated test sessions between two endpoints on the global test network.
This dual approach, coupled with machine learning and big data techniques, lets carriers and providers increase their fraud detection efforts without adding more manpower.
As fraud continues to evolve, machine learning and analytics will assist in identifying the newest method of deception.
This approach can identify and block fraud by 35% to 50%, saving millions in the process.
An innovative and improved fraud detection solution can result in substantial savings and a better customer experience.
By preventing fraud before it reaches the customer, operators can protect their bottom lines and keep their reputations in good standing.
CSG worked with an African wireless operator that suspected revenue losses due to international bypass fraud.
We launched a campaign including test calls from more than 150 countries, which revealed a total of 40% bypass fraud in their system.
With CSG’s passive and active testing solution, the operator can now detect and block 200,000 illegal minutes daily, preventing revenue leakage of eight million per year.
In some ICT circles, particularly in Africa, fraud has become acknowledged as a by-product of doing business. With billions at stake, there needs to be a better solution.
The best approach includes simultaneously using passive and active monitoring while utilizing machine learning and big data.
Fraudsters will continue to craft creative methods, so providers need to be proactive and innovative in their prevention methods. By doing so, revenue and customers can be protected.
To read more about how CSG can help prevent telecom fraud in Africa and beyond, please visit our website.