The results of an in-depth global survey to understand the impact of fraud on the wholesale carrier industry has been published by Subex, a provider of business support systems (BSS) for communications service providers (CSPs).
The wholesale carrier market is estimated to be worth around $170 billion and the survey results indicate that carriers are estimated to have lost US$6.12 billion to fraud last year alone.
The survey was based on detailed responses from 195 participants from some of the world’s largest carriers from across North America, Europe, South America, Asia-Pacific, the Middle East and Africa. It highlights some of the key problems facing carriers today as a result of fraud and identifies the various types of fraud that are presently plaguing the industry. The report also reflects on some of the key reasons behind the increase in fraud in the global carrier market over the last two to three years.
The report identifies the most prevalent different types of fraud in the wholesale carrier market, with False Answer Fraud being the highest at 55.71%. A large volume of fraud is related to immediate partners, which includes New Operators – Credit Risk (51.4%), False Disputes (30.7%), Blending HQ Routes (31.4%), Long Firm (7.1%). This indicates carriers will perhaps benefit from more stringent due diligence both during partner on-boarding as well as on an ongoing basis. The survey also shows that internal fraud is on the rise, with approximately 13% of carriers reporting losses due to internal fraud.
The survey reveals that the industry is opening its eyes to the growing issue of fraud, with 77% of respondents reporting that pressure on margins has resulted in an overall increase in awareness or focus on fraud.
There is still much work to be done, however, and only 35% of wholesale carriers have dedicated fraud management teams, with an even lower 25% of wholesale carriers collaborating via dedicated fraud forums. While nearly 80% of wholesale carriers use in-house developed tools for fraud detection, more than two thirds of them report a lack of automation and timely availability of data as hindering their fight against fraud.
Vinod Kumar, chief operating officer of Subex, said:, “Sitting on the fence is no more an option else carriers will see fraud continue unabated and eat into margins which are already under pressure. The aim of this report is to increase awareness within carriers and help them prepare in their fight against fraud”.
