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Responding to fraud

Jeremy Blow speaks with Dave Woods, Fraud Product Director of Azure

Introduction
Operators have always been in competition with each other, whether it is a first, second or even third tier operator. There is an ex-PTT community growing out of the telecom troubles that is becoming more of an operator family now that they have a much stronger link with each other. On the fraud management side, some of Azureís best relationships are now with competitors of BT, which is recognition that fraud is not necessarily brand or company specific and a problem that requires a collaborative approach to benefit everyone.

Sharing Information
Fraud management and revenue assurance are competitive tools. The key to making them work successfully is about how they are used, how they are operated and the scale of that operation, and in this respect, BT has led the way for a long time. By virtue of this, Azure, offers superb technology, backed by observational knowledge as to where and how fraud is occurring. Because Azure understands an operatorís business, they can address problems facing operators from a uniquely qualified position. This is the kind of knowledge they can now share with customers on a global scale. Although Europe has been Azureís initial target, now they boast customers in South America and the Caribbean as well. As Asia deregulates its own telecom sector and adapts to more competitive market strategies, revenue assurance will become an increasing demand for them too.

All Azure products help you prevent and detect wasted revenue. You will lose money if you do not bill for everything you do, so you want to make sure that you are not paying more than you need to and that you bill for everything you should. You can address these issues with revenue assurance products to create more value and in the instance of fraud, reduce your losses. But operators are not only in danger of losing revenues through fraud and lost opportunities, they are faced with increased administrative costs incurred in correcting inaccurate customer bills and this in turn adds to churn problems as dissatisfied customers defect to competitors. In these days of multi-channel marketing, where a customer counts for more than a simple sale of single products and services, it can be a very costly lesson indeed when a former customer passes on that dissatisfaction to friends and family.

Addressing the problem
Fraud generally accounts for about 3% of turnover while lost opportunities in revenue assurance can reach 10-12%. With operator revenues dependent on opportunities, so time is equally a factor in the response to the problem. Once you have identified a problem the solution needs to be applied quickly or you keep losing revenue through continuing fraud and your inefficiency.

The speed with which you can respond to your realisation directly correlates to the value of the return on your investment in a technology solution, so you should take the earliest opportunity to call in the experts. Customisation of individual solutions can take too long but off-the-shelf products, which take only 6-8 weeks to implement and start reducing losses immediately, are ideal. Azure offers a generic product that can be fine-tuned as more specific details emerge.

Understand the complexity of the problem
Telecom networks are highly intricate. Azure products need to interface with a whole range of different switches, mediation systems, signalling products, all giving us data in different formats, speeds, some in real time some in 24 hour batches. To enable this level of integration they have to be flexible in fitting their own technology during the 6-8 week implementation period, while the fraud experts look at the operations and tie up a fully enhanced solution, depending on:

  • The variety of services to be mapped
  • The length of time it would take to implement the system
  • The required management of predicted and unpredicted growth of traffic
  • The future needs of fast growing business such as carrier-to-carrier services
  • The workload and man-hours as well as the call data record (CDR) processing needs
By taking all of these issues into account, Azure can provide a highly accurate and feature-rich interconnect billing system, that enables accurate bills to be produced so carriers can collect all revenue due from interconnect partners use of a carrier's network. It also simultaneously provides for reconciliation of interconnect bills to the carrier, to ensure that only carrier services actually used are accepted for payment.

Customer Relationship Management
Revenue assurance is about making sure that you know how much a customer spends and how much he will pay. As far as CRM goes, Azure products can be highly integrated across the whole of a network, connecting to mediation, billing and the customer service system, providing all the information needed to monitor customer network usage and optimise service.

In the enterprise solutions or corporate market, telcos suffer from fraud as high as 30% although the liability for that loss does not necessarily lie with the telco but with the corporate. Where the equipment resides on the customerís premises, and the loss results from an external attack on a PBX or misuse by an employee, strictly speaking the liability is the customerís, not the telcoís. However, where an operator has a good customer suffering from this kind of fraud, it is an opportunity for them to demonstrate good customer service. One of things that BT has enabled Azure to do is to build a great corporate fraud monitoring service and they have over fifty corporate customers signed up to it. Rather than having to wait for a bill at the end of the month, or to discover the misuse, Azure can actively monitor their traffic to provide a situational risk assessment with their call alert products. This makes BTís customer service quality better. Through proactive fraud monitoring BT has reduced the scale of complaints from corporates and they have helped business better understand their equipment which helps them deploy it more effectively.

Managing Risk
Deciding whether you want a particular customer in the first place is another matter. What the telco industry does when fraud is suspected is to note not only where these calls are made from but also where they are made to. Where the risk is very high, credit agencies can provide a back-up but whereas a telco uses mainly speculative information, a credit company deals mainly with historical information. Yet the award-winning Tardis system, developed by the Azure fraud control solutions team, enables the secure interchange and management of fraud and crime related information between all the UKís telecommunications organisations. The solution is based upon proprietary technology developed as part of Azureís fraud control system developments. Hosted by BT on a secure server, Tardis is accessed daily by over fifty UK Telcos, each of whom has private areas to share fraud information among their company. This information can also be published onto the secure public area which incorporates bulletin board functions. All members of TUFF (Telecom UK Fraud Forum) can log-on online using digital certificates to access secure information so that other fraud teams can be kept up date of the latest fraud experiences. In this manner, any new customer application can be checked against TUFF in the first instance for a previous history for that identity.

Balancing Risk
When Dave Woods, Head of Fraud at Azure says, ďThe security teamís job is to put the fraud team out of work whilst maintaining a profitable business; the fraud teamís job is clear up the mess left by the security teamĒ, he is talking about the balance of risk, revenue generation and operator needs. You need to allow certain people (customers) to use your network while preventing others (fraudsters) from getting access. The problem is, you may not know who is who until they start to use it. Only once the fraud detection system is in place can you start to influence the security of a particular product or service. One of the first things, when beginning a new customer relationship is to carry out a risk assessment. The best way for Azure to understand how to make a system more effective is to get the customer to examine their products and services as a whole, while Azure specialists assess the risk related to those types of products and services. The consultants can then tune the system, help innovate more secure products and help manage the whole operation from the vantage point of an overview of the broad risk.

Arbitrage
Telcos around the world lose money due to arbitrage and artificial inflation of tariffs created by calls to personal numbering services and premium rate services. Where there is a revenue share, any service provider is open to abuse and many operators have learned this the hard way. On the 1st November 2002, Azure launched an interconnect fraud bureau. This is an innovation created by merging their fraud bureau and interconnect bureau, permitting them to monitor interconnect abuse around Europe. Certainly in the fraud system market, no one else is doing this. In the case of the telecom market, where people are setting up fake company users as well as bogus telecom service operations the fraud can cost millions. Azure can apply their experience of various modus operandi to the benefit of their customers, adding another dimension to their value-offering by educating them about things they have never seen before. From a customer perspective, it is far preferable to prevent fraud than have it occur in the first place.

A true business partner will not just defend you from loss but create value and revenue opportunities for you as well. Azure specialises in mediation management, interconnect accounting, billing integrity, route optimisation and fraud prevention. Their solutions enable telecom operators to reduce costs and maximize revenues from existing operations and infrastructure, by improving the accuracy of cross-carrier billing, identifying and diagnosing the source of lost revenues and reducing fraud.

Where operators are defending their international market share, where they need to differentiate their offerings whilst improving customer service, Azure has the tools and knowledge to help.

For more information, please contact:
Dave Woods: dave.woods@azuresolutions.com



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