Financial fraud and identity theft cases are still on the rise and telecom business owners are perplexed by the increasing cases. Telecommunication experts want to prevent fraud and strengthen relationships with customers actively. Only online KYC verification services can help business owners accomplish the goals mentioned above. This way, corporations can combat fraud and ensure compliance with Know Your Customer & Anti-Money Laundering (KYC & AML) regulatory obligations.
The following article discusses in detail significance of online KYC checks & how the latest authentication approach can fight fraud effectively.
Online KYC Authentication Solutions: An Overview
Digital Identity verification is about validating new customers’ ID credentials to prevent identity theft and other financial fraud. This is important to ensure compliance with Know Your Customer & Anti-Money Laundering (KYC & AML) regulatory obligations. Businesses can easily avoid hefty fines or permanent bans while maintaining market credibility.
Gaining Insight into the Fraud Cases Targeting the Telecom Industry
Smart electronic devices that facilitate online transactions and sharing of sensitive data are prone to hacking. Even small loopholes in mobile networks can attract fraudsters to exploit the shortcomings and commit identity theft or payment scams. According to the Communication Fraud Control Association (CFCA), Telefonica group produced a yearly revenue of around 50 billion dollars. Fraudsters targeted the loopholes in security mechanisms and stole around 915 million dollars.
Scammers are also using SIM farming approaches to exploit free services in the telecom industry. With this, criminals take payments & send messages to thousands of strangers and gain Personally Identifiable Information (PII). In case of success, cybercriminals use users’ sensitive data for SIM swaps (a type of ID theft which targets mobile phones and gains access to social media accounts, bank details and digital wallets through One-Time Passwords (OTP).
In 2023, T-Mobile was targeted by Lapsus$ with SIM swapping attacks and code scams. Moreover, the telecommunication industry experiences SIM swapping and phishing SMS techniques.
A recent example of such attacks was fake financial aid programs in Ukraine in the form of thousands of messages. The telecommunication industry also faced similar challenges during the COVID-19 era.
The aforementioned cases make it challenging for business experts to discourage bad actors from exploiting the system. SIM-swapping attacks have heinous consequences for the telecommunication industry & its customers. Moreover, with a lack of regulatory measures, the sector will keep experiencing fraud attempts in the times ahead. The latest regulations must include proof of identity (through online KYC verification services) while buying a SIM card. This way, experts can prevent fraud and ensure compliance with international regulations.
Detecting & Fighting Fraud Cases
Fraudsters commit SIM swap scams when criminals get their hands on Personally Identifiable Information (PII). Perpetrators can achieve the target through hacking. This way, hackers gain access to the user’s sensitive data and other important information in the SIM card. The data can include email and sensitive banking details.
Telecommunication industries must adopt a Risk-Based Approach (RBA) to identify and discourage abnormal activities. When the telecom sector offered zero-rate calls to users worldwide, it is evident that the experts needed to implement the latest security measures to prevent fraud. This resulted in a 2500% increase in calls and SMS messages. International Mobile Equipment Identity (IMEI) can help detect abnormal activities by highlighting higher data consumption in a short period as compared to other smart devices.
Telecom businesses must actively prevent fraud in the modern digital world while guaranteeing a fair usage policy. There should be a cutting-edge system that monitors customers’ use of telecom services along with mobile networks & data sources. This way, companies can detect abnormal activities quickly and report to higher authorities immediately.
The market has innovative digital solutions for telecom operators that can easily observe and identify fraudulent activities such as SIM swap. Telecommunication companies that can monitor red flags in mobile service users can easily fight financial crimes. This happens by identifying abnormal activities in massive volumes of online traffic from a target location through mobile devices.
Securing the Telecom Industry
The application of online KYC verification services validates consumers’ identities to attract genuine customers while discouraging bad actors from exploiting the systems. The main objective is to mitigate the risk of identity proofing while observing customers’ use of services. In various jurisdictions, governments encourage using online KYC measures along with AML checks to safeguard mobile operators from financial crime. There can be some locations where authorities do not facilitate online KYC verification solutions. However, telecom service providers must still implement cutting-edge technology to discourage identity theft, money laundering, and terrorism financing cases.
Cybercriminals challenge the telecommunication sector by using sophisticated fraud techniques. In this light, telecom operators find it tough to fight scams. For this reason, online accounts and e-wallets are vulnerable to external attacks. This negatively impacts market credibility of the service providers.
Collaborating with a third-party service provider can help telecom businesses implement a cutting-edge online KYC authentication service. This way, users can validate the credentials of onboarding customers and discourage bad actors from exploiting the company database. https://realrawnews.co.uk/