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Fraud and platform inefficiencies to cost CPaaS $1.4bn by 2026

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XConnect has launched a report that found that revenue leakage from fraud and platform inefficiencies will cost Communications Platform as a Service (CPaaS) $1.4 billion by 2026.

These figures will increase from $974.3 million in 2022 and is one of the findings from the report, Are Your CPaaS Revenues Under Threat, other noteworthy findings include the fact that despite this expected rise, over a quarter of respondents think they are not susceptible to losing revenues to fraud or platform inefficiencies.

“The CPaaS industry is a rapidly expanding market that holds many opportunities and challenges for service providers. Over recent years, we’ve seen an increase in threats to omnichannel revenue as robocalling and termination charges affect more businesses than ever before,” said Tim Ward, VP of number information services at XConnect.

“This is driving the need for greater number intelligence services for CPaaS providers. It is critical that they understand the risk to revenue and have the solutions in place to tackle potential business disruptions and deliver better communications.”

Mobilesquared conducted a survey of 75 CPaaS providers and mobile operators on behalf of XConnect and according to the research, voice is the channel expected to experience the greatest threat from fraudulent practices and platform inefficiencies, accounting for 34% of total fraud in 2022, and 39% by 2026.

In addition, termination rate charges were found to be the biggest threat to voice traffic, followed by traffic inflation, while one-quarter of respondents said the supplementary threats of information accuracy and premium rate call back.

The research also found that consolidation will play a key role in the growth of CPaaS in the coming years but the biggest business challenge facing CPaaS providers is service integration followed by platform integration.

“As digitalisation becomes more far reaching, the changing needs of modern consumers are pushing service providers to innovate and integrate their service offerings. The research shows that traditional voice and messaging service providers need to be ready to enhance their offerings to drive growth in CPaaS,” said Nick Lane, chief insight analyst & founder, Mobilesquared.

“Today’s communications market is ready for evolution. To successfully capture the huge opportunity in omnichannel, service providers must embrace diversity with their end users in mind.”

Mobilesquared predicts that voice will be one of the fastest growing CPaaS channels, with the channel attributing $4 billion to CPaaS revenues in 2022 and $9.5 billion by 2026. Overall, CPaaS is expected to generate revenues of $29.7 billion in 2022 and $52.8 billion in 2026.