62.07% of the world’s population has a mobile phone. Of these, over 3.8 billion use a smartphone that allows them to make calls as well as complete banking transactions, shop online, etc. While there are countless advantages to having a mobile phone connection, there are risks too. No one is completely safe from concerns like SIM card fraud and data hacking.
Today, this risk has increased with telecom companies exploring the idea of online onboarding for new customers. Customer can now apply for SIM cards online without visiting stores in person. While this is convenient and customer-friendly, it puts the company at risk of dealing with people using stolen identities or other fraudsters.
There’s no doubt that digitization is the future and hence, telcos need to pay special attention to building a robust security framework. This is where identity verification becomes vital.
Types of Fraud that Mobile Services Need to Protect Themselves From
With customers using their phones for communication, monetary transactions, work, social media, and more, and the vast amounts of personal information stored on mobile accounts; it isn’t hard to see why mobile services are a key target for fraudsters. There are many different types of fraud prevalent across the telecom industry but some have a larger impact than others.
Identity Theft
Fraudsters may steal a customer’s personal information and use the data to impersonate them when making e-commerce purchases, monetary transactions, etc. Identity theft could be the result of malware activity, un-secure internet activity, data breaches, etc. Stolen identities can be also used to commit more serious crimes like money laundering and terrorist activity.
SMS Phishing
This is another common method used by fraudsters to steal a customer’s identification details and personal information. Customers unwittingly click on links in SMS texts, which direct them to fake websites where they are tricked into revealing personal information. In many cases, it could be several weeks before the customer realizes what has happened.
SIM Swapping
SIM swapping is a legitimate service that allows customers to replace their existing SIM card with a new one. However, fraudsters may misuse it to gain access to authentication messages for financial transaction, one-time passwords and other such details linked to the SIM card. The damage can range from email account access to exposing banking information. In 2019, Twitter CEO Jack Dorsey’s account was taken over by hackers as a result of SIM swapping.
Carrier Data Breach
Fraudsters who gain access to the company’s database may target the mobile service provider directly and steal customer information, takeover accounts, etc. A few years ago, hackers accessed the T-Mobile network and accessed personal information belonging to 3% of the company’s customers.
How Does Fraud Affect Mobile Operators?
Mobile fraud is continuously growing and its effect on mobile service providers is both tangible and intangible. Irrespective of the type of fraud – phishing attacks, robocalling, subscription fraud, etc., the impact is experienced not just by customers but also by the telecom industry.
Financial Losses
In 2019, mobile operators faced losses to the tune of over $28.3 billion. In such situations, customers may hold the mobile service provider liable for monetary losses.
Customer Turnover Rate
If a customer becomes a victim of online fraud they aren’t likely to have the confidence to use remote mobile services again. As a result, the telecom company could lose a customer. When this happens to multiple customers, it translates to a loss in revenue and market position.
Loss of Trust
Similarly, when a customer sets up a mobile connection, they trust the company to offer good service and to keep their data safe. Cases where fraudsters target the telecom databases to steal customer’s personal information reduce the trust people have in the service provider. Existing customers may leave and potential customers may think twice about using the company’s services.
It takes years for a company to build a reputation and fraud can bring that reputation crashing down in an instant. Thus, telecom companies must be proactive about using technology and other tools to give their customers a secure service.
What Is Identity Verification?
Identity verification is a process wherein the company can verify whether the customer is who they claim to be.
Telecom companies may ask the customer to upload a copy of identity documentation or use biometric facial recognition when onboarding a customer online. By partnering with an identity verification service, the company can compare the documentation provided with data from a reliable third-party database to validate the same.
For example, customers who are onboarded digitally may upload a selfie with relevant identity documents and the system could scan the photo to check whether the selfie matches the photograph on the document. The system could also check the details in the documentation provided against databases such as voter records or driving license databases to ensure that it is correct and valid.
This is a real-time check and does not cause any lags or delays in the onboarding process.
How Does Identity Verification help Prevent Fraud?
Whether a customer is being onboarded in-person or digitally, Identity Verification can be pivotal in preventing fraud that puts the company and its customers at risk. Being able to verify a customer’s identity allows mobile service providers to meet Know Your Customer (KYC) regulations and validate who the customer is.
They can also conduct background checks on the customer to ensure they are not on sanction lists, people who have been previously associated with identity theft, terrorism, etc. Thus, makes it empowers mobile companies to onboard only genuine customers while maintaining a quick and seamless onboarding experience.
In Conclusion
Without accurate identity verification, even otherwise reliable security measures like two-factor authentication can become outdated. Thus, along with educating customers about precautionary measures to be taken to protect their identities, mobile service providers need to put stringent identity verification measures into place. This helps the company ensure that their customers are safe and their reputations are protected.Â
