Battling fraud into the future

Battling fraud into the future

04 December 2019 | Gareth Willmer

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Fraud is growing as a concern throughout the businesses of wholesale carriers, but they need to stay aware to deal with a constantly shifting landscape.

Telecoms carriers are increasingly viewing fraud as a company-wide issue, as efforts involving big data and innovative technologies such as machine learning, artificial intelligence and blockchain are examined and ramped up to combat attacks.

This is among the findings in the recently released Fraud Report 2019 by industry body the Global Leaders’ Forum (GLF), its second annual report on international wholesale fraud. Some 80 per cent of carriers consider management of fraudulent traffic as a key strategic priority and over half as an increased concern over the past year, according to its survey of more than 30 international carriers, plus technology providers.

A more proactive, coordinated approach is being seen by many as key to combatting these issues, given developments like the massive-scale threats the world has seen in the past few years from distributed denial-of-service (DDoS) attacks as the number of connected devices surges. Ericsson predicts, for example, that cellular internet-of-things (IoT) connections will quadruple from 1 billion last year to 4.1 billion in 2024.

IoT and other new technologies, such as 5G and edge computing, have the potential to significantly widen the number of access points for attacks and lead to the emergence of fresh threats like those based on bots, virtual machines and distributed device hacks.

But as well as readying networks for future battles, there’s a need to keep an eye on the ebb and flow of other existing threats. International revenue share fraud (IRSF) is cited by carriers as the chief growth area for threat activity – with more than three-quarters of respondents in the GLF’s survey reporting high or very high volumes of such activity – and practices such as robocalling are rising in prevalence.

Gaining awareness

Though plenty more can still be done and carriers will continue to face threats amid a constantly changing environment, industry players see it as encouraging that awareness about fraudulent activities has grown outside carriers’ specific fraud teams, and is no longer seen as merely a cost of doing business. This is key, given that society in general has become more knowledgeable and demanding about protection.

Katia Gonzalez, head of fraud prevention at BICS, a GLF member, and chair of the fraud working group at industry body the i3forum, speaks of the change she has seen in the past couple of years, with a greater number of platforms and products being brought out to deal with such activities. “Discussing fraud now in any meeting with a customer or peer is normal,” she adds. “It’s just part of the agenda.”

Fraud is also increasingly being considered as a matter of course in many more parts of telecoms businesses all the way up to top management level, with some 58 per cent of respondents to the GLF’s survey reporting that fraud management has risen in importance at their organisation over the last 12 months.
“When you have CEOs, CFOs and CTOs involved in talking about how to fight fraud, it makes much more impact and tends to drive the industry more, like is happening now,” says Gonzalez, adding that this also improves synergies between teams.

She believes it is not sustainable to avoid facing up to fraud for the long-term future because it will eventually impact on business relations with customers, which increasingly link fraud prevention to quality. “Dealing with fraud is not an option any more, but a must,” she says.

Gonzalez adds that BICS and other i3forum members are now more careful in choosing business partners, and when telecoms fraud becomes a problem, these relations are discontinued.

Evidence is that the industry is getting faster and more effective at blocking fraud, she says, with carriers such as BICS able to help through its learnings from the huge amount of data that flows over its network. According to the company, its FraudGuard platform enabled operators to save more than $320 million in 2018, identifying and proactively blocking more than 170 million fraudulent call attempts.

Gonzalez believes that machine learning combined with big data will grow over time to be a significant help in stamping out fraud in the future, pointing out that it will also be necessary to do this because fraudsters themselves will arm themselves with such tools.

But she emphasises that there will always be a need for a strong team behind this too, for analysing traffic and providing support to customers around the clock if anything should go wrong. “I don’t believe in purely automated platforms,” says Gonzalez. “We have a lot of data to crunch, and we still need people at some point to decide what is and isn’t fraud.”

Cross-industry collaboration

Others also reflect on how organisational and cross-industry measures are helping to quash threats. “The wholesale market is now setting up departments and processes to address this issue,” says Jason Lane-Sellers, president of the Communications Fraud Control Association (CFCA) and director of fraud and identity at LexisNexis Risk Solutions. “Yes, more needs to be done and greater collaboration across the industry will help, but progress is under way.”
Lane-Sellers explains that one of the key reasons for this is that fraud scenarios frequently involve different parts of the industry, such as the enterprise, consumer and wholesale segments. “As such, the greater the collaboration we can encourage and the more members that join the group, the better fraud knowledge, detection and prevention there will be across the industry,” he says.

He adds that the wholesale providers benefit from their “unique” position in being able to identify fraud attacks in the early stages because of their global view of traffic, but effective anti-fraud approaches need to be harnessed by the whole marketplace and can be facilitated by cross-organisational collaboration via associations such as the CFCA and GLF.

One industry-wide move that has helped establish more of a framework for jointly battling fraud in the wholesale market is the code of conduct launched last year by the GLF in partnership with the i3forum. Signatories to this have now grown to more than 30 carriers, with the recent addition of MTN GlobalConnect, OTEGLOBE and Rostelecom.

Establishing this code has been a significant positive step, says Robert Teichmueller, head of fraud management at Deutsche Telekom Global Carrier, but he believes there is room for building on these recommendations with firmer and more standardised commitments in future.
He thinks collaborations like that recently announced between GLF members to work together via a Communications Blockchain Network also aid this ability to cooperate across the industry. “I’m positive about the conversations and cooperations we’re having,” he says.

Higher level of security

Teichmueller says that at DT Global Carrier, there is a commitment to providing security to all customers without them having to sign up to a paid product – with use of big data and automation helping to monitor and reduce damage, and increasingly fit the needs of individual customers. “We have also built a fully automated blocking system that blocks at a granular level,” he adds.

As a result of this, he says, the company has seen a decline in the biggest-scale attacks and although the volume of attacks is growing, they are at a smaller scale and therefore less damaging.

At NTT, Michael Wheeler, executive vice president of the Global IP Network, talks of the need to remain vigilant amid the continuous “ebb and flow” of the threat landscape as tools are found to block attackers and attackers discover new fraud methods. “There’s some of that cat-and-mouse game that occurs between attackers and defenders,” he says.

Yet even if it’s not possible to predict everything that might unfold, the fact that NTT has been tracking these events for a couple of decades and has a group of experienced experts working on this means the company has extensive knowledge of what types of tactics it might employ in certain scenarios, says Wheeler.

A spokesperson at Kaspersky, which offers tools to wholesale providers such as a service that can notify users of the reputation of incoming numbers, says that “data analysis and research are key” in stamping out threats. “This can be used to find anomalies within user device and phone number behaviour, as well as build partnerships globally to mitigate international fraud, create anti-fraud communities and work closely with cybersecurity and fraud analysis experts,” says the spokesperson .

Elsa Uguet, anti-fraud and security marketing director at Orange International Carriers, points out that fraud management systems have become increasingly commonplace among wholesale players in a way that was not seen a few years ago. “Protecting the value of the business has become a key objective and having a strategy to fight against fraud is now a must-have,” she says.

One key product that the International Carriers division has focused on for customers is its Hubbing Platinum service, which includes anti-fraud capabilities that have helped reduce the impact of rising IRSF activity by detecting and blocking such traffic.

Given the Orange Group’s global operations on the retail side, says Uguet, “we know exactly the game and the pain when it comes to retail traffic impacted by fraud. At the end of the day, it is the end users that suffer and the retail operators that take the blame.”

In the industry as a whole, she notes that efforts such as blockchain and collective work on “STIR/SHAKEN” standards in the US to help halt the rise of robocalling look promising, while initiatives such as the GLF and i3forum are key too. But she agrees that everyone needs to come on board when it comes to collaboration to fight effectively against fraud in the future.

“We have to stay focused and be ready for everything,” says Uguet. “For us, the message is clear: do not stop the fight.”