How are SIM-Box detection solutions helping to reduce SMS fraud?
There are different kinds of fraudulent activities related to SMS but it is the illegal bypass fraud that can be most efficiently addressed with SIM-Box detection solutions.
SIM-Boxes are used by fraudsters to terminate SMS traffic via grey routes and can cause significant revenue loss to operators.
Proactively detecting these SIM-Boxes and preventing them from causing damage before it really hurts is the key to any illegal bypass detection solution.
How much interest from operators are you seeing in SMS anti-fraud solutions and why do you think it is increasingly on their agenda?
It is very apparent that operators are giving increased attention to SMS fraud.
In the past, fraud prevention focussed very much on voice, and rightly so. The unstoppable rise of A2P (Juniper Research estimates the application to person market will be worth $60 Billion in 2018) is increasingly attracting the kind of fraudulent activities that were in the past associated with voice only.
In the last few months at CSG International we have spoken to several mobile operators in eastern Europe who have put budget aside for 2016 to combat SMS fraud.
What can carriers do to prevent SMS grey routes?
In an ideal world every operator would establish a proper inter-working agreement with every carrier and aggregator they are connected with. This would allow the operator to charge for every SMS coming into their network.
However, in many cases only a technical interconnect exists allowing fraudsters to exploit the connections and to flood the operator with SMS traffic which they will never be able to bill for.
In addition fraudsters have learned to impersonate genuine sources of SMS traffic (“spoofing”) which makes it even more difficult for operators to protect themselves.
Operators really need to have a two pronged approach: proactively testing their incoming routes with illegal bypass detection solutions and firewalls for passively monitoring and filtering for unwelcome incoming SMS traffic.
What revenue challenges do operators face with OTT messaging as a competitor to traditional SMS?
OTT messaging is competing with SMS and certainly looks like winning in the long run. For the operator, this isn’t good news.
They lose termination fees while at the same time finding OTT traffic is putting pressure on their bandwidth. Some would argue that terminating an SMS via an app can in some cases constitute fraud; but the jury is still out on this particular point.
Overall, how do you view the progress being made by the industry in combating SMS fraud and what challenges lie ahead?
The industry has been perhaps a little slow to fight SMS fraud but is now waking up to the fact that revenue is being lost on a daily basis.
This is a typical cat and mouse game: the operators are catching up and are starting to putting increasingly sophisticated solutions in place to combat such fraud, whilst the fraudsters are constantly trying to stay a step ahead.
The main challenge for the operators will be to effectively protect their SMS revenue in an efficient and automated way without negatively impacting their genuine SMS traffic.
