Fraud is here to stay…

Luke Taylor
Author: Luke Taylor CCO & Deputy CEO
Date: 6th June 2016
Categories: Technology

Neural Technologies recently undertook via an independent third party a survey. The objective of the survey was to see how telecommunications industry perceives risk today and what will be the potential threats in the coming years.

The survey results were from 113 individual respondents, from different levels of management and from communication service providers evenly distributed in size and geography.  Some of the highlights of the survey included:

  1. When it comes to managing risk, sharing knowledge and experiences with the team or peers is seen as important as the underlying systems.
  2. The CFO is the most senior individual responsible for Fraud, Credit Risk and Revenue Assurance in more than 50% of companies surveyed.
  3. The average level of lost revenue is over 13%
  4. Fraud and other true losses like invoicing systems errors account for nearly 7%

One of the particular questions in the survey that highlighted a stark concern was
Did the respondents expect the level of loss from identified issues in the survey increase, decrease or remain the same?

Interestingly out of the many choices of fraud and risk, the only one risk that respondents recognised to continue to increase in the coming months and be a significant threat was Internal Fraud.  Internal fraud can be interpreted in many ways from employees defrauding the company, disreputable dealers falsely claiming sales commissions, mobile money agents working in collusion with CSP’s employees, employees topping up friends and family accounts, individuals moving balances from pre-paid to post-paid on a regular basis to avoid billing, IT and network engineers reprogramming switches and network infrastructure to their own benefit or simple opportune theft of devices, etc.  Internal fraud is not unique to the emerging markets, it is perpetrated globally, but emerging markets with their diversity of wealth, growing/maturing economies, rapid new technology adoption and aspects like mobile money as witnessed with the huge success of M-Pesa in Safaricom, means more opportunities for such frauds to occur.

Neural Technologies have worked with Safaricom in Kenya for a number of years, and is a fine example of corporations working together to protect services and subscribers including the M-Pesa mobile money service and police internal fraud threats. Neural Technologies product monitors for fraud from a 360 degree perspective; monitoring subscribers, network, dealers, agents and employees for fraud as well as utilising the data analysed within these systems to assist and support the identification of other crimes perpetrated including poaching, terrorism and money laundering.  Safaricom are very keen to ensure that they stop internal fraud quickly and efficiently and have no hesitancy in publicising arrests and prosecutions.  With M-Pesa being such a high revenue earner for Safaricom, corporate reputation is crucial to ensure consumer confidence, being seen to take internal fraud seriously is key to maintain Safaricom’s dominance in this marketplace.

Fraud is here and here to stay, it is important that although it can never be eradicated, it can be managed through successful process, resources and systems working cohesively together and constantly adapting and evolving to the constant changes that are seen in the telecommunications industry.  It could mean the difference from a service provider surviving in this extremely competitive marketplace, where every dollar and cent needs to be protected or maximised.

If you wish to have a copy of the survey, then please go to If you want to talk to us about how to address the problems and opportunities in this survey or contribute to future surveys, then please contact me via  I look forward to hearing from you