PARTNER FEATURE: Telecoms fraud has existed for as long as the industry itself and, despite attempts and numerous systems to manage and prevent fraud, it still continues. In fact, fraud grows with new threats and fraudulent practices emerging continuously. Fraudulent activity encompasses, but is not limited to, imposter fraud, robo-calls, calling line identity (CLI) spoofing, Wangiri frauds, and traffic refiling.
The impact on the industry is enormous, costing telecom operators of all types many billions of dollars. The Communications Fraud Control Association (CFCA) has reported that frauds involving the following issues cost the industry US$18.2bn every year. These include: international revenue share fraud (IRSF) costing US$5bn, call stretching and short-stopping costing US$4bn, PBX hacking costing US$3.6bn, interconnect bypass which costs US$2.7bn, CLI spoofing costing US$2bn and robocalls which cost the industry US$0.9bn.
The scale of the problem means that operators, along with national regulators, have sought to eliminate and prevent fraud. Recent legislation includes the TRACED anti-robocalling act in the US, but fraudsters pay little attention when there is so much money to be made from telecoms fraud. Operators have devoted enormous effort and attention to preventing fraud, investing in fraud management and prevention systems to try and protect their businesses. However, the pace of fraudsters’ innovations often puts them on the back foot and, although certain amounts of revenue are protected, fraud still happens to the scale and extent identified by CFCA.
One reason for this is that telecoms is a fragmented industry. Different jurisdictions have different regulations but, more significantly, telecoms services are often delivered by multiple network operators. A simple voice call could originate on one cellular network and terminate on a fixed line network, involving a different provider. That’s just a simple example, a more complex session could start on a mobile in one country, traverse a global long distance network or networks provided by other operators before terminating on another mobile network.
The interconnections between operators provide enormous potential for fraudsters to embed themselves into the business chain and commit fraud. Much of this activity is hard to eliminate because, while individual operators have invested in systems to identify and prevent fraud, these are typically confined to their own operations. In essence, they can see what’s happening in their network but they can’t see beyond and understand if and how fraud is occurring in their partners’ networks.
Fraud does not mean only financial losses. Increasingly, the costs also involve reputational damage and operators are seeing delayed consequences such as mistrust among operators. This has resulted in individual operators initiating a variety of fraud protection systems that are incompatible with those of others. The result of this has been no way to interlink fraud-related information between different operators.
Traditional systems offer only reactive protection for individual operators that can use their own data and analyse calls on their networks. This means they can only gain insight into the parts of a call that happen on their own networks. However, if operators can collaborate they can see the full extent of fraud across calls from end-to-end and move from reactively understanding that fraud has happened to proactively co-operating to validate calls across multiple operators.
This is the thinking behind AB Handshake which has launched a new ecosystem for validating calls. The company is building a fraud-free community of operators and is completely confident that this community will be safe from fraud because of the real-time call validation between originating and terminating networks performed by AB Handshake system. In fact, AB Handshake guarantees the community is 100% fraud free because of this capability.
In addition, AB Handshake is able to address the entire operator landscape because the solution works with both TDM and IP networks and therefore all types of operator business can take advantage of the system. This is unique in the telecoms fraud industry which has traditionally been composed of network-specific systems.
To create this community, the company is bringing together operators and associated organisations such as DID number owners to create an end-to-end mechanism by which calls can be validated. Instead of retrospectively identifying fraud and then trying to go back and prevent it happening again, operators can interact with their partners to ensure that traffic across multiple parties’ networks is validated.
For the system to work optimally, as many network operators as possible should collaborate and AB Handshake is adding operators to its ecosystem continuously. Each addition strengthens the ecosystem and enables more calls to be validated so adding more operators is a priority. The model can be compared to the SWIFT financial clearing mechanism that banks use as a trusted method for transferring funds internationally.
To attract operators, AB Handshake is offering the ecosystem with no upfront capex required and is minimising the integration burden for operators – which inevitably has a cost in terms of hours spent. The onboarding process involves identifying the ideal integration option which takes account of the fact that operators have very different networks. To accelerate uptake, the company has a special programme for early adopters to encourage them to join the AB Handshake community.
Joining the community is quite straightforward. Operators simply install the AB Handshake software on a dedicated server and connect it to the network equipment. The system is then ready to use and operators can select their own security policy for signalling solutions.
AB Handshake generates its revenue by charging for validation of calls. As each operator comes on board, a certain portion of their traffic starts to be validated. For example, if an operator has ten connections with other operators and five of them are members of the AB Handshake community, traffic between the member operators will be validated. Each validated call is charged for because that’s where the value of the service lies – the more calls that are validated, the less fraud can occur.
The system charges for any validated call attempt, because the information that a call is not fraudulent is also valuable. Of course, the charging is not excessive with AB Handshake keen to point out that any solution aimed at detecting fraud should not cost more than the cost incurred by the fraud itself. By offering a pay-as-you-grow model, the company believes it can increase the numbers of operators involved to create a global, interconnected ecosystem of operators with every incoming and outgoing call validated with 100% accuracy and there are no false positives.
Operators can monitor the validation process via the web interface which gives visibility into what is happening in the system. This also provides all the necessary logging and export capabilities so operators can enrich the information within their existing fraud management systems.
The sheer scale of telecoms fraud is helping AB Handshake to gain traction among operators with this new approach. The ecosystem currently has around 200 operators in its pipeline at varying stages from negotiation to signing contracts and onboarding. Current participants in the AB Handshake community have live traffic towards any destination in the world, which allows detection of interconnect bypass fraud for any operator that comes on board.
To further grow the community, the company is focused on promoting its solution to operators as well as vendors of software and billing systems who can aid integration with AB Handshake. The company is also working with regulators who are paying increasing attention to telecoms fraud.
The telecoms anti-fraud community is playing an important part in spreading the message about AB Handshake. Once professionals experience the benefits of 100% call validation, they tell colleagues and this drives more operators to the AB Handshake community.
The handshake between operators is enabling validation of all calls across any networks and is becoming the strongest weapon the telecoms industry has against fraudsters.Subscribe to our daily newsletter Back