Going mobile with fraud detection

Preventing mobile-based fraud requires coordinated efforts between regulators, industry bodies representing mobile operators, banking and financial services, and security tech providers

Our dependence on mobile phones just keeps increasing. Consequently, there has been a concomitant rise in fraud using mobile phones. Hundreds of millions of new users joining the digital mainstream are easier to defraud as they are vulnerable to sophisticated scams. Apart from individuals, even enterprises are placing more and more reliance on mobile-based business processes, especially in the pandemic era. 

The global GSM Association (GSMA) in its recent report has predicted a huge rise in services beyond the core of fixed and mobile connectivity. “Since 2017, there has been a notable increase in the range of online services people use in developing countries, including education, healthcare and e-government. The breadth of mobile internet usage is likely to increase further as a result of Covid-19, considering the need for social distancing,” says the Global Mobile Trends 2021 report of GSMA. “Services beyond core include a range of B2C and B2B services, such as pay TV, media and advertising, IoT, cloud, security, financial and lifestyle services, and solutions for vertical industries.”

Analytics firm Adjust says, “Globally, fraud rates in gaming increased by 172.95 per cent between August 2019 and 2020.” This puts users at risk. But even marketers who advertise on mobiles are at risk. Scammers use bots to click on ads which marketers have paid for. These bots put the company and the user at risk by stealing or compromising data. 

Not surprisingly, the scope and extent of fraud on mobile usage has increased dramatically. Global efforts are being made to curb it. GSMA has developed a new international fraud deterrent system with Mobileum. The aim of the trial is to evaluate advanced collaborative fraud and nuisance call prevention techniques, says GSMA. The effort will involve using tech for call path tracing to find the source of a call when that source is disguised; live threat monitoring and alerts for providing a real-time view and warnings about active fraud campaigns; network identifier address book for providing an authenticated list of network identifiers; and call validation to confirm the provenance of a call.

All these steps will prevent and investigate robo-calling or automated calls which can lead to frauds like sim swapping. The US communications regulator has assessed that such fraudulent robotic calls cost $10 billion every year. 

The Telecom Regulatory Authority of India (Trai) and the Cellular Operators Association of India (COAI) have also been warning consumers against fraud-like identity theft and financial scams through mobiles. As mobile-based financial transactions rise, so will cases of fraud. 

To combat fraud, new and emerging technologies can be brought into play. French firm Thales has launched biometric advanced voice authentication technology for mobile phone operators and users. “The voices of the callers are quickly matched against the stored voiceprints of known scammers and individuals with suspicious call patterns,” says Thales. 

Transaction monitoring software is being used by banks to track usage patterns by consumers. Such software can assess if a mobile transaction fits a pattern or is unusual. Suspicious transactions can raise red flags for the users and the service providers. 

Preventing mobile-based frauds will require coordinated efforts between several institutions. These include banking and telecom regulators, industry bodies representing mobile operators, banking and financial services and security technology providers. This is especially important for emerging markets, where the mobile usage is growing exponentially. 

Apart from individual users, enterprise usage of telecom services exposes companies to mobile fraud as well. Awareness of cyber security has focused a lot on networks and broadband-based connectivity. Now emerging technology is being used to tackle mobile-connectivity-based frauds as well.