Revenue sharing fraud, PBX hacking, account takeover, bypass fraud, traffic pumping, subscription fraud – the types of fraud affecting the telecom sector are growing in number. In 2021 alone, telcos lost 2.22% or $39.89 billion of their revenue due to fraud.
Imagine having to deal with all of these frauds in addition to installing new equipment, expanding networks, and ensuring consistent service. Truly, running and managing a telecom business is not a walk in the park. But the right technologies in place can surely turn the tables on the fraudsters.
Fraud in Telecom – A Growing Deterrent
Fraud in telecom is probably as old as the industry itself. For many years, operators and providers just accepted the reality, either absorbing the losses caused by fraud or simply passing them on downstream. However, the occurrence and complexity of fraud are escalating day by day.
More than ever, unauthorized people are taking advantage of telecommunications companies using a variety of fraudulent practices conducted via:
- Interconnect bypass that takes advantage of termination rate complexity to make cheaper phone calls
- Revenue sharing by misleading users to make calls and pay for premium phone rates
- Arbitrage by incorrectly routing international long-distance calls through a third country where call costs are cheaper
- PBX hacking – Allowing impostors to exploit unsecured phone networks and take control of phone lines
- Subscriptions and online store hacking using stolen IDs or credit card numbers
- Traffic pumping, where deceitful local exchanges falsely state the number of calls to their networks to benefit from compensation fees
- Account takeover, where online hackers steal user login credentials to create new accounts
- SMS phishing to obtain personal information and use it to fake identity or steal money
The Role Blockchain Can Play
As one of the most transformative and widely-discussed technology trends of all time, blockchain carries the potential to completely disrupt the telecom sector. By encrypting data, increasing transparency, and establishing accurate identities, blockchain can boost IoT connectivity, streamline 5G services, and prevent telecom fraud.
As the impact of fraud begins to get out of hand, telecom operators are inclined to face unique fraud challenges – head-on.
Let’s look at the many opportunities blockchain offers for telecom operators looking to combat growing instances of fraud:
Ensure Subscriber Authentication and Tracking
In the telecom industry, there are many ways in which a subscriber’s identity can be compromised. Blockchain technology allows operators to link devices to a subscriber’s identity, carry out regular authentication via public keys, and encrypt digital wallets for safe payments. Such secure authentication helps build a clear picture of stakeholders, ensuring smooth and secure experiences for users.
Thwart Roaming Fraud
Detecting and responding to roaming fraud hasn’t been easy for telecom operators until now. Blockchain technology allows operators to implement a smart roaming agreement with designated nodes to constantly verify transactions broadcasted on the network. Every time an event is triggered, it verifies the information and accordingly executes the terms of the agreement.
Enable Real-Time Consent Management
Blockchain-enabled RegTech platforms that use DLT technology can enable real-time consent management. It thwarts Unsolicited Commercial Communication (UCC) across messaging networks, defends unsuspecting, and enables operators to efficiently deal with fraudulent calls on the rise.
Establish Accountability with Regulators
Telecom operators can use blockchain technology to establish much-needed accountability with regulators. Using a unified platform, telecom clients and telemarketers can register all stakeholders and connect with regulators to streamline communication and responsibilities.
Identify Telemarketers
With users inundated with numerous spam calls and messages each day, blockchain can help in the identification of telemarketing calls and get rid of them altogether. It allows telecom operators to verify and shortlist subscribers who have opted for such calls while preventing unauthorized calls.
Efficiently Deal with Stolen Devices
Telecom operators can store unique device or SIM data along with the customer profile in secure ledgers and instantly block stolen devices in the event of a theft. Since a single blockchain network will contain immutable information about all stolen devices, telecom operators around the world will more easily be able to find them.
Summing Up
As the telecom industry grapples with mounting incidents of fraud, blockchain offers the potential to nip fraud in the bud. It provides numerous telecom fraud solutions, including subscriber authentication, roaming fraud prevention, real-time consent management, regulatory accountability, telemarketer identification, and stolen device management.
With fraudsters becoming more and more adept at evading identification, blockchain technology reduces the likelihood and scale of attacks. It helps businesses vet and filter out stolen credentials, secure transactions, and protect business revenue.
At Globe Teleservices and our group company, GTS Tech Labs, we help telecom companies build the blockchain solution they need to keep the business running and the revenue flowing. As an innovative, forward-thinking organization that makes cutting-edge telecommunication products and solutions, we are committed to helping you deal with telecom fraud – without disrupting the customer experience.