We are a global leader and innovative provider of Revenue Intelligence solutions for Communication service providers as well as telecom regulation authorities.Office Locations: UK, Germany, Bulgaria, India, Brazil, Israel, USA, Hong-Kong, SingaporePartners: both local and global partners such as Oracle, Microsoft IBM, ATOS, Ericsson, Huawei, Deloitte, Amdocs, PTSI, Dominion, ….Leading RA & Fraud Management Standardization with Top Industry Forums. Our CTO is leading the RA group in TMF and our Fraud Strategy Director is co-chairing the Fraud TMF group
There’s a new landscape in the telco arena and actually it is not only a new landscape but a silent revolution which is gradually happening below the radar.We believe that this new landscape is a game changer for Fraud Management units, meaning fraud departments will need to change their way of thinking and adapt themselves to accommodate this new landscape.One of the major challenges for the Fraud unit will be the need to justify themselves. We believe that Fraud departments have a lot of inside knowledge - through their work which is transversal through the organization, through the exposure they have on all kind of data such as customer information, subscription orders, usage from various services, traffic patterns and through the expertise they have developed in Fraud detection - and the Fraud unit can leverage all this knowledge to provide value to the operator e.g. improve the revenues and the profitability of the operator.
As I said there is a gradual but fundamental change going in in the Telco arena. This change is the result of an aggressive price competition, increasing regulation and economic challenges and the need to put more efforts on customer retention.All these factors lead telcos to launch new offers which need to be attractive in terms of services (“bundles”) and simple to understand in terms of costs (“no surprises”). Examples:More and more bundlesNo more limitation on usage; voice & SMS are perceived as commodity -> a must have, not something you as an operator can charge forFlat ratesLet’s see some examples <animation>
So the question that needs to comes up from FraudDepartment perspective is the following:- If everything is unlimited and everyone has unlimited call volumes, how will fraud managers be able to convince management that they must continue hunting for fraudsters? - I mean, if everything is unlimited, what's the point of seeking out "abnormal" behavior?
This change of landscape is a major dilemma fraud officers face today, many of whom have approached us for advice on the issue over the past 2 years
So the questions Fraud managers are asking themselves today are:How, or what should I do, in order to stay important and essential in the organization?How can I become proactive and innovative enough to stay relevant?
So due to the landscape change, Fraud units must adapt themselves. They need to shift from an only technological (mainly network) oriented unit to a more business-oriented unit. This means Fraud departments must justify themselves. How do they achieve this? They achieve this by being more efficient, more proactive and more innovative.
Now in today’s landscape, the objectives of the Fraud unit need somehow to be aligned with the business objectives of the telco, such as:Increase customer satisfactionCreate differentiators vs. competitionImprove the reputation and the brand of the company- Generate new revenues for the company
And this brings us to the Enterprise Opportunity.On one hand with have the challenge of the fraud department, who ask himself: how can I monetize my Fraud expertise? Maybe I can generate revenues by offering added services to enterprise/corporate customers? Not only I will be able to generate revenue but I will also give value to my enterprise customers, increase their satisfaction and reduce churn?On the other hand, we have the challenge of the enterprise telephony manager’swho ask himself how can I minimize risk & exposure across the corporate telephony & data. This can be:External hacking into the corporate PBXFraud & malware attacks on employees’ phonesInflating bills, subsidized by the corporationCompromising sensitive corporate informationAbuse of telephony services (PBX & personal phones) by employees
So the overall idea is to turn the lemon into a lemonade.Meaning the fraud departments turns the challenge resulting from the new market landscape into an opportunity such as: <examples on the slide>Increasing internal positioning for Fraud DepartmentsFraud & RA teams could utilize their capabilities to promote their benefit internally to other departments:Information analytics used for fraud and RA can provide vital data internally such as:Profiling behaviorDefining norms per product and serviceIdentification of anomalous or out of norm activity segmentsNew product potentialMargin AnalyticsLifecycle analysis by product and servicesService Abuse ManagementThis relates to the ability of the Fraud unit to monitor Fair Usage Policy and T&CsActually the fraud department is ideally positioned to manage service abuse and provide value to the organizationAn effective FMS system can provide this capability to add value via;Monitoring and alerting of high level abuseIdentification of margin negative services or entityTraffic profiling and analysisLocal, national, multi/single party, diversity etc.Alerting and notifications for T&C or FUP abuse
So how does the Fraud Department turn into a revenue generating unit?
As an example of behavioral analysis for internal departments, Fraud managers can leverage their FMS in order to configures rules which, if breached, will generate notifications and alerts directly to the relevant department, e.g. rules which may detect increased churn risk for high-value customers. Alerts will be sent directly to the Customer Retention department, and this process will be completely transparent to the Fraud Analyst.
Let’s drill down a bit more into 2 specific areas:FMAASEnterprise Fraud & Risk Management
Crowdsourcing (ability to use data which you get from everyone, make value out of it and resell it as a service e.g. WAZE)Comprehensive central database of anti-fraud controls, Fraudsters’ information, hotlists, rules & scenariosBased on shared controls across the Telco operator’s customer baseCollected & processed by the Telco operator’s expertsGlobal/regional/group-specific solutionsAvailable anti-fraud controls in the Telco’s operator central database Regional fraudster listsRegional fraudster’s fingerprintsGlobal PRS listsGlobal & regional “hot” destinationsUp-to-date Industry lists (e.g. IRSF list, “hot countries” list)Anti-fraud controls to new fraud patternsBenefitsPro-active protection against future & existing fraud, via a collaborative approachCustomer or Partner X is hit by a new fraudster/fraud scam All other members are protected by instant update of dedicated fraud controls and fraudster’s fingerprintsCollaboration at the global/regional/group levelMost effective & up-to-date anti-fraud controls & hotlistsControls & hotlists collected & processed by the Telco Operator’s expertsMinimal investment in gathering knowledge, collecting information, building & maintaining anti-fraud controls ExamplesReport malicious appsReport fraudulent/unrecognized destinations of calls, SMSs, payments, data sessions
There are quite a few types of fraud which may occur at the corporate level, and to whose occurrence the telco is often blamed by the corporate customer for not protecting them. As we discussed and saw in the FIINA survey presented yesterday, the PBX hacking is still a predominant fraud phenomena, and even becomes more dangerous with the rise of IP-based PBXs.So, why not create a mechanism for CSPs that will detect PBX hacking and post alerts, and offer it to the PBX owners themselves as a service?This is the latest trend and future of PBX and enterprise fraud. Tier-1 and Tier-2 operators will be able to sell fraud prevention services directly to their enterprise customers, giving them the ability generate revenue while allowing PBX owners to monitor their own call activity in real-time.
So if I summarize the main message of my presentation in 1 sentence:Fraud units that used to only detect and investigate, often operating in secret without anyone knowing, can be transformed into departments that are totally integrated with the organization to fight the competition, create differentiators and generate value to the operator.How to do it?<see on the slide>
Telco’s change in Climate Brings new opportunities for growth
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Today The enterprise opportunity New landscape How to A need for a change become a revenue in scope of work generating unit for Fraud Management5
CHANGE of Telco’s are going through a gradual change Revenues are down due to change inClimate products & plans – A shift towards bundles – New flat tariff plans – All included plans – Unlimited Voice/SMS/Data
Change in Fraud Management If traffic is unlimited … – No more “high usage” ? – No more “abnormal” traffic behavior ? Change of fraud incentives ? – Why bother for fraud if it’s all so cheap and unlimited ? Change of Fraud Management strategy ? – Who are we after ?7
Fraud Manager’s Dilemmas Today ? ? ? How can I generate new How do I develop proactive revenue streams from approach to protect the the same tools I use to organization from future prevent losses? fraud threats and challenges? How do I protect my organization from current fraud threats to minimize revenue losses?9
A Shift in Approach Fraud departments are Effective: obliged to be more: Achieve more with fewer resources Support large volumes and multiple types of transactions Align activities with corporate business goals Demonstrate their activities and effectiveness within the organization Proactive: Assess risks of services & products pre-launch Top down analysis & prioritization Innovative: Stay ahead of threats and challenges Produce revenues as well as prevent losses Be prepared for upcoming technologies and products10
The Traditional Fraud Department Traditional Operator Fraud Teams Operation & investigation teams Seen as a necessity – no benefit recognition Operations – measurement focus, high volumes of incidents and high number of personnel Investigations – small case loads, long timespans, legal actions, minimal recovery Simplistic process, lack of technical understanding No commercial skill sets, or process expertise11
Fraud Management in Main Stream From a defensive, reactive and detective unit to a proactive, revenue generating and innovative unit Goals and targets shift from simply: ”Detecting more fraud” to “Achieving higher customer Satisfaction” and “Creating new revenue streams”12
The Enterprise Opportunity Provision of a Fraud Management service to customers as a differentiator including capabilities such as: – PBX protection as a service to corporate customers (PBX detection as revenue generator) PBX profiling Back-office investigation tools – New dedicated fraud detection schemes Management per customer Allowable activity programming – Corporate customer portals Notifications directly to customers (SMS, Email) Dashboards, Tuning of fraud controls – Smartphone malware protection App based analysis, with system integration13
TURNING a Lemon to Lemonade Sales and partner Increasing internal risk management positioning for Protection Fraud offering for corporate Departments customers FMAAS - Fraud Management As A Service for Partners Service abuse management Behavior analysis capabilities for marketing1414
Areas to Consider Partner FMAAS Service Abuse Management – Provision of FMS for partners (such – Product protection as VNO’s & Wholesale) – Margin, T&C’s & FUP’s – Spam, SMS, Bypass, etc. Enterprise Fraud Protection Services – Enterprise PABX Fraud Management Behavioral Analysis for internal – Enterprise Risk Management departments – Customer profiling Sales Channel Risk Management – Anomalous groupings – Commissions & payments – Segment behavior – Internal & external sales teams – Location profiles16
FMAAS and Enterprise Fraud & Risks Management1717
FMAAS More Telcos have relationships and arrangements with other operators via MVNO or VNO relationships, reselling agreements or wholesale relationships Effective fraud management is often difficult in these situations as the third party partner owns all the customer data and the third party often has a delay in receiving data or the data is limited Therefore there is an opportunity for operators to offer fraud services to these partners to allow them to achieve effective real time management18
FMAAS cont’d Services offered to these third parties could include: – Dedicated fraud detection schemes – Fraud Management per 3rd party » Specific rules and analysis » Specific profiling – Partner FM portals – Rule and threshold configuration & tuning of fraud controls – Notifications (SMS, Email) – Management and operational dashboards, – Crowdsourcing & sharing of information – Hot B number lists – Fraudster profiles & fingerprints19
Enterprise Fraud Movement (or regrowth) of fraud to enterprise/corporate level, including: – Subscription & ATO fraud at the corporate/SME level – Regrowth of PABX fraud – IP service growth – IP PaBX software – Bypass/Gateway as a source – Customer manipulation – Traffic pattern hiding – Internal Fraud in the enterprise Often the operators are blamed by the customer for not protecting them from these type of fraud20
PBX Fraud Protection Package – Example A dedicated dashboard portal to corporate customer users as well as the operator’s account managers including the following: – Status report and traffic trends on all PBX’s – Drill down to specific PBX’s to view alerts & trend graphs with daily/weekly/monthly profiles of calls – Standard case management & investigation capabilities to investigate PBX hacking alerts. – ‘Gatekeeping’ activities, such as: Setting corporate whitelists & blacklists – A set of configurable permissions defining what data each user may view or update – Analysts can get notification by mail/SMS on alerts21
FM & RA units need to keep track and be ahead of challenges Understand your internal strengths and its potential commercial value to the organizations Increase your department’s position in the company by offering prevention services to your customers and partners Increasing the capability range and coverage of the fraud and RA teams is essential A truly intelligent, flexible system or tool set can support the process of transforming the fraud area into a profit center22