Cutting the cost of managing Roaming Fraud post Covid-19

The impact of Covid-19 on global international roaming following the collapse in demand for overseas travel has been nothing short of dramatic.

With some telcos claiming to have lost over 80% of their otherwise healthy roaming revenues, and the prospect of an uncertain economic recovery looming, many operators have been compelled to take draconian cost-cutting measures within their organisations.

For instance, operators are no longer finding it commercially viable to pay price premiums to their suppliers for enhanced roaming solutions, such as the integration and maintenance of complex analysis tools for performance and quality management or traffic steering. The market demand is simply not there today.

Legacy cost items for roaming departments also pose an issue. This includes charges like roaming billing data file processing, or the monitoring of customer data files exchanged between operators for the detection of international roaming fraud. In the latter case, international roaming is seen as a driver of International Revenue Share Fraud (IRSF). If combined with subscription fraud the consequences can wreak financial havoc on an operator unless the fraud is detected quickly.

Arguably the best way to stop fraudsters from perpetrating IRSF is to deactivate calls as they are in progress. In an ideal scenario, operators would pinpoint fraudulent activity in real time, and instantly block the call or bar the subscriber from the network. Real-time monitoring technology is already there but requires complex network integration to access the relevant call data. For many operators, a far more cost-effective solution may be to look at near-real time fraud prevention, but what are the benefits?

As a rule of thumb, roaming fraud monitoring should only cost a fraction of the measured risk of a fraud attack. This way the business case will remain positive, or at least reasonable, and networks will remain protected. A bit like home insurance, the risk of theft, or a fire, or water damage might be low, but it can’t be eliminated.  

Granted, adding a layer of artificial intelligence might deliver a 1-3% efficiency improvement in fraud detection rates, but are such gains financially justified during these Covid times? And if the advantage of real-time versus near-real time fraud prevention can be measured in a matter of just minutes before a fraudulent call is deactivated, it hardly makes the case for spending on big-ticket machine learning.

During this pandemic, telco roaming budgets have all but vanished, and both operators and suppliers need to adapt to this new reality by keeping a close watch on their operational costs until the market starts to pick up again. Plugging roaming losses by looking at alternative solutions and preserving the integrity of one’s reputation among the roaming community should be at the heart of an operator’s international roaming strategy.

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