According to CFCA’s Global Fraud Loss Survey 2017, the cost of telecom fraud decreased more than 20% in 2017 compared to 2015, representing 1.2% of last year’s telecom revenues. This shows how technology and the increasing collaboration between carriers, banks, service providers and governments can successfully lead to a reduction in fraud.
In a previous post we looked into the 10 reasons why identity verification matters for MNOs. Today we’ll be discussing identity fraud and the technologies that can help telcos protect their customers’ identities.
What is identity theft / subscription fraud?
Identity theft is defined by CFCA as the utilization of a real identity without the owners’ knowledge, to fraudulently obtain goods and services. In the case of telcos, this type of fraudulent activity is known as subscription fraud, where a fraudster uses a stolen or fabricated identity to get services with no intention to pay. In most cases, carriers wouldn’t detect the fraud until it has happened, but technology, together with automated customer enrolment, can help prevent subscription fraud – and what’s more, the impact can be enormous. Prevention is key, because a fraudster can only abuse a service if he or she has been given access.
3 technologies for smooth and secure customer enrolment
Improving subscription fraud prevention means supplementing traditional identity checks with a host of new processes and technology. For example, technologies that can help smooth customer enrolment and verify identities include data capture, automatic document verification and biometrics. Here’s how they work:
- Document data capture uses image analytics to extract relevant document information. It enables accurate customer information and better populates customer databases.
- Automatic document verification reduces identity theft by identifying fraudulent documents. Different solutions can be implemented depending on the level of risk and channel to validate if a customer is in possession of a fake document.
- Biometrics can be used as an excellent tool to verify identity remotely using fingerprint and facial recognition. In some countries, biometric data can be verified at national databases. This model is being used within carriers. Countries such as India, Peru and Thailand are already using biometric data as part of their customer enrolment process and identity verification.
In some cases, implementation of these technologies has enabled a reduction of more than 80% in subscription fraud. The reason for this is that these technologies make it much harder for potential fraudsters to get away with it – and as a result, they may be persuaded not to even try.
Ensuring successful implementation of automated customer enrolment
In order for implementation to be a success, a seamless digital customer journey is critical. These technologies facilitate not only automation for customer enrolment but also simplify access to any other telco service – such as online services, mobile applications or IoT – while complying with the need for mobility and strong authentication. Customer trust is essential for easy access to such services, to make sure that the customer is truly who they say they are. Otherwise, you could be providing services to someone that stole another’s identity.
However, the battle doesn’t end there. It’s fundamental to stay ahead of technology, and develop different techniques depending on the channel and onboarding processes, because fraudsters develop new, more difficult to detect ways to perpetrate fraud all the time.
In response, organizations need solutions that evolve with trends, fraud methods and customer requirements. A good set of solutions to automate customer enrolment and prevent fraud should have a close relation with telecom fraud and retail departments, to improve techniques and continually adapt to their needs. The market is moving towards digitally verified identities, which should have a significant impact on customer trust and security.
If you have any questions about how automation of customer enrolment can be used to prevent subscription fraud, let us know in the comments below or by tweeting to us @Gemalto.