Telcos face $300bn global loss from fraud in 2016

telcofraud

Telco fraud appears to know no bounds in terms of the money carriers are losing so news that risk management and analytics expert Neural Technologies say telecoms operators face an estimated global average loss of 13% or $294 billion in 2016 comes as no surprise.

Many users are reluctant to report fraud for commercial reasons but will alert trade organisations to methods being used by fraudsters in an attempt to prevent other suffering the same losses.

So with over 100 telecoms fraud experts completing the survey a wider picture emerges.

The report states that revenue loss varies widely by region, with Central Asia seeing 17% losses compared to a relatively modest 8% in Western Europe. Hard revenue losses – such as external fraud, bad debt and internal fraud – totalled 6.9%, (equivalent to approximately $155bn) with missed revenues, for example
sub-optimal call routing, poor processes and incorrect data usage, accounting for the remaining 6.2% ($139bn).

Luke Taylor, CCO, commented: “The Neural Technologies Telecoms Risk Management Global Survey 2016 has given us a valuable snapshot of the telecoms industry from the operators themselves. The main findings include the fact that, in more than 50% of companies surveyed, the CFO is the most senior individual responsible for fraud, credit risk and revenue assurance – which reflects our understanding based on talking to many CSP’s in the past few years, so the buck really stops there, and we think that CFOs will find the report particularly useful.”

“In addition, when it comes to managing risk, our respondents cited ‘knowledge sharing’ as equally important as the ‘underlying systems.’ Neural is keen to encourage the exchange of information between peers and this was an important discussion at our 2015 User Forum. The telecoms sector is significantly expanding its services around the world with faster broadband, 4G/5G roll-out and more connected devices. Our survey reveals that new services create both new revenue opportunities and risks for operators and the challenge is to secure the upside and minimise the losses.”