Fighting Fraud in a Changing Telecommunications Infrastructure

The telephone infrastructure we work with today is a fascinating hybrid of old networks and new technologies. It is a mish-mash of legacy infrastructure and pioneering digital services that has evolved out of necessity to deliver the products and services that customers demand.

This remarkable evolution has seen telecommunication equipment and infrastructure travel on a staggering journey from copper wires through to the modern digital telco, and in doing so triggered an equally intriguing evolution of fraud challenges.

The very first telecommunication networks go back to the 19th century days of telegraph—creating long-distance communication via electrical signals sent down wires. This ushered in a revolution in national and global communications, leading to the first telephone networks in the late 19th century. 

Over more than a century to follow, communication service providers (CSPs) and telecoms infrastructure have been on a remarkable journey of evolution, in that continued quest to improve efficiency and better serve customers around the globe. That transformation has major implications for fraud and crime risks in telecoms networks. 

The first era of telecoms – human communication

The resource-intensive early days of telecommunications were framed by basic circuitry and human operators. Often this literally meant human employees physically plugging and unplugging wires between switch boards to channel people’s calls. By 1935, there were an estimated 235,000 of these operators in the United States alone! 

This system required huge amounts of manpower, and as a manual process its most significant vulnerabilities were the direct actions of operators within the switchboards themselves. An operator could easily listen in to the phone calls of users, giving them access to private and often important information that could then be used for a variety of criminal means. This is particularly critical given that those individuals who could afford phones were often those with significant wealth, particularly in the early days.

These circuit-switched systems became widely automated from the 1930s and 1940s onwards, with the first automated exchange in the UK established as early as 1912. But while the systems were automated, the fundamental architecture remained a circuit switching approach for almost a century. 

The second era of telecoms – hardware and Internet

Circuit switching soon ran up against a very familiar challenge for our modern telecoms landscape—scalability. Manual labor demands triggered the change to automation, before that system itself was replaced by new IT and custom hardware for telecommunications companies. 

This revolutionary Internet technology saw rapid growth in the 1990s and 2000s, as telecoms companies embraced a customizable network infrastructure based on the transfer of data packets. This allowed information to flow through the system across numerous routes, with packages directed according to the best available path. This era also saw an expansion for many telecoms companies as they acquired media wings to round out their content offerings, further adding to the resource burden on these new networks. 

These packet-switched networks and Internet capabilities introduced new telecoms fraud vulnerabilities that still persist today, including simbox fraud, roaming fraud, as well as traditional IT risks such as cybercrime. The uniquely interconnected nature of the telecoms industry made it particularly vulnerable to such crimes. 

The combination of the first era and second era of telecommunications created a layered infrastructure, where traditional copper wire networks were integrated with more modern Internet-enabled systems. This century of technology layering has created a particular challenge in efforts to tackle scam calls, as operators face challenges attempting to mitigate Internet-enabled scams while challenged by the limited information which can be carried on copper wires. 

Neural Technologies’ SCAMBlock solution was developed in response to this industry challenge, looking to provide safe, secure calling networks for customers that reduce their exposure to fraud. This sophisticated solution cuts off high-risk calls before they reach customers, or flags medium-risk calls with caller identification warnings to ensure customers are aware of any potential risk. 

The modern era of telecoms – data and orchestration 

In the continued quest for more efficient, resilient, and cost-effective systems, CSPs are now turning towards a software-driven approach, as data and automation become increasingly fundamental parts of an optimized modern telecom infrastructure. This adaptive approach not only allows telecoms to better respond to high-volume consumer demands, and a data-driven connected society, but also reflects the growing regulatory and technical burden of modern operations.

This new telecoms reality means CSPs can leverage increasingly advanced business insight, and automated solutions backed by machine learning and artificial intelligence, in order to improve customer service and ensure more adaptive and resilient revenue streams. It often incorporates multiple diverse functions such as mobile money, financial technology, and mobile data capabilities.

Delivering on this capability will require a sophisticated data orchestration solution that can integrate diverse data sources and streams into one cohesive workflow, helping coordinate complex ecosystems into an automated and optimized business process environment. Neural Technologies’ Orchestration solution is built for this reality, and can be customized and configured for the unique operating needs of each CSP, providing an adaptive, scalable solution for the modern telecoms landscape. 

Artificial intelligence (AI) and machine learning (ML) are also playing an increasingly important role in this landscape, providing automated and semi-automated solutions to effectively integrate and respond to high volumes of data. AI/ML solutions are vital for telecoms operators looking to maintain safe, secure, and efficient services in this modern telecommunications ecosystem. 

This new ecosystem inherits many of the fundamental needs of the earlier iterations of telecoms systems, and must incorporate robust fraud protection that deals with this new data-driven reality. Neural Technologies’ Fraud Management System is designed to detect, adapt, and prevent fraud risks in this changing landscape, leveraging unlimited data source integration with flexible behavioral profiling that enables a range of sophisticated detection tools including link analysis, rules and machine learning capabilities.

The telecom industry is one fundamentally based on evolution, and the changing landscape of telecommunications infrastructure demonstrates that pioneering approach for over a century. What’s equally critical as this industry evolves, is that protection evolves alongside it. That not only means a more trusted revenue environment for your business, but a safe, secure environment for customers too. 

Find out more about how our adaptive solutions can support CSPs in an evolving telecoms ecosystem

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