Identity Verification and Telecom are Working Together — Here is How and Why?

Identity verification has turned out to be an important service to overcome the risk of scams in all the industries known, and telecom is no exception. Since telecom is associated (directly or indirectly) with multiple other services such as health, national security, and finance among others, therefore, ID verification matters more in this industry. During the COVI-19 pandemic, the total revenue lost to telecom scams for all the businesses globally was $32.7 billion. Unfortunately, as the telecommunication industry struggles with identity threats, including account takeovers, vishing calls, call transfer scams, the good news is these risks can be mitigated to a great extent by employing swift identity verification solutions.

As we are talking about the scams related to the telecom industry, let’s dive deep into the problems the industry is dealing with these days.

Current Fraud Scenarios in The Telecom Industry

• SMS Phishing Scams Doubles as the Holiday Season Approaches

The number of SMS (Short Messaging Service) phishing continues to increase as the holiday season approaches. The number is estimated to grow almost double from the same period in the last year. Smishing is carried out by fraudsters to attack mobile users and their security.

Messaging-security organization Proofpoint stated that the frauds in telecommunication have almost doubled as compared to the same period last year. As the recent surge in the industry is entirely aimed at customers, those fraudulent activities can easily spread to a business system as well, especially at a time when a lot of employees are getting work done remotely and from their own devices.

Cyber attackers use databases of stolen or purchased subscriber information to customize text messages, including the first names and other details to make the text look more real. On the customers’ side, smishing frauds aim to gather credit card information or other credentials. Most of the time, they involve notification regarding fake package delivery, asking for a credit card number to claim the delivery, or sending victims to a platform where they can gather their data. In short, fraudsters are becoming more sophisticated and employ social engineering tactics to trick the customers.

• Sky Rocketing Whatsapp Scams in the Recent Months

Like everyone else, fraudsters also like to be on messaging apps hence they trick the consumers through it. Almost 90% of the messages are read in the first three minutes therefore fake messages possess more chances of being responded to by the users. Whatsapp is the widely used application for messaging purposes worldwide and henceforth tops the list when it comes to facing smishing attacks.

Recently, WhatsApp fraud saw scammers posing as the person’s family member or friend and asking for sums of money. The concerned department has issued warnings against fraudsters that pretend to be friends or family members and ask for money. One of the most reported scams people experienced in recent years was SMS claiming to be Royal Mail (UK’s postal service) suggesting people deposit a shipping fee.

• SIM-Swap Fraud to Prevail in South Africa

The SIM-Swap scam is not a new thing but they have been there for decades according to the SABRIC (South African Banking Risk Information Centre). The organization indicates that SIM-swap frauds have grown to 91% with each passing year as compared to online banking fraud across all websites.

SIM-swap fraud prevention requires MNO’s (Mobile Network Operators) to proactively approach the clients to verify that a SIM-swap request is actually being made by a customer before onboarding. The identification process must be augmented employing other technologies such as voice biometrics.

How Identity Verification Benefits Telecom?

Telecom organizations need to execute stringent deterrent and punitive checks to combat the threats of digital scams implemented through spam calls or SMS.

• Minimize Drop-off in the Account Opening Process

Telecommunication companies employing digital channels to create new account applications are paving ways to use identity verification. Deploying such measures is useful in eliminating application abandonment and capturing information to improve credit referencing application success rates.

• Prevent SIM-swap Fraud

This type of fraud happens when a fraudster connects with a wireless carrier and convinces the call centre representative that they are the genuine customer. Rather than depending on manual identification procedures, using authentic methods such as biometric authentication is definitely a successful way to assess the digital identity of the customer requesting to change the phone number.

• Verify Customers for Prepaid Accounts

MNOs (Mobile Network Operators) are increasingly being encouraged to authenticate the identity of their existing prepaid customers to minimize telecom frauds. Receiving millions of copies of identity documents by mail, email, or in-branch, identity verification offers an accurate and efficient way to fulfil this compliance challenge.

In a nutshell

Mobile service providers counter increasing risks of identity scams, either during the customer onboarding process or involving SIM swaps and fake digital transactions. These can put them to face financial losses and damaged brand reputation. To avoid such consequences, the telecom industry needs robust identity verification services to incorporate into its work operations. MNOs are required to employ automated identity verification solutions that can assist them with evaluating the risk associated with the customers via multiple measures. Along with meeting the regulatory requirements, identity verification offers telecom operators to carry out frictionless customer data collecting processes without compromising the user experience.