In November 2019, MEF global board member and iTouch Chairman Waheed Adam hosted a workshop in Cape Town to discuss how to tackle consumer fraud in business messaging.
The open invite from MEF members to the banks and mobile network operators in South Africa successfully brought together 3 of the 4 networks, the banks, local associations WASPA (Wireless Application Service Providers' Association) and SABRIC (South African Banking Risk Information Centre) to share their own progress in the fight against fraud.
This discussion is driven by the 13 fraud types identified in MEF’s Enterprise Messaging Fraud Framework involving social engineering and causing consumer harm e.g. identity theft through Phishing by SMS (Smishing) and Spoofing.
Identity Theft on the rise by 200%
Data theft by SIM SWAP is arguably the biggest threat to the messaging ecosystem. Statistics found in 2019 that sim swapping fraud surging by 200%. Theft from the unsuspecting disclosure of personal data by a consumer can have a wide-ranging impact from unknowingly authorising financial transactions to bank accounts taken over by diverted OTPs.
As customer complaints are always directed at the party with which a consumer has a direct relationship, namely the network or the enterprise e.g. the banks whose customers are the target of fraudsters with a clear risk of reputational damage and customer dissatisfaction.
Headlines such as bank scammers are stealing £1million a DAY in fraud epidemic damage the reputation of not only the banks but also the mobile industry when rightly questioned whether we are doing enough to keep the A2P SMS channel secure and clean from fraud to ensure prolonged consumer trust, and a safe environment for brands to communicate with their customers.
Decreasing the fraud surplus
Since its launch in 2015, MEF’s Future of Messaging Programme and its participants have been collaborating to define best practices when it comes to fraud prevention and management. Its global A2P SMS Code of Conduct rolled out in 2018 and members are now leading the debate on how continued industry collaboration across the entire ecosystem is required to have an impact against the battle against fraudsters.
The UK launched the SMS Sender ID Protection Registry, where banks, Government agencies, mobile network operators and messaging providers are working together to redefine processes and provide tactical solutions to mitigate smishing and spoofing.
Watching this development closely, MEF member Waheed Adam held a workshop inviting the South African banks and mobile network operators to explore a similar collaboration – a first of its kind.
This is particularly important for South Africa, as it is a major market for enterprise messaging. According to Mobilesquared’s annual A2P SMS Forecasts, nearly 25 billion A2P messages are sent each year in this mobile-first market; 35% of total traffic in the region.
Digital banking fraud soared by 75% in South Africa in 2018 with over 12,000 incidents of mobile banking fraud reported and a total of R28.9 lost to mobile banking fraud, with SMS phishing the preferred method to defraud users.
Additionally, this is where Adam’s role as iTouch Chairman plays an advantageous and influential role, as many of the banks which form the SABRIC collaborations are clients of iTouch.
Taking steps in the right direction
MEF invited SABRIC – the South African Risk Information Centre who track all banking fraud in the country to share some of their local market insights and challenges and talk about the impactful and innovative consumer education campaigns they carry out to raise awareness of the daily fraud threat.
For every fraud type, there are just as many technical fraud prevention solutions helping protect consumers, enterprises and networks alike. But internal demands on the business to invest in fraud prevention and the endless game of ‘whack-a-mole’ can make the roll out patchy.
To defend the long-term position of SMS as the cleanest and reliable communication mechanism requires a collaborative approach across the ecosystem.
As overall business messaging competition from other solutions intensifies, SMS is under increasing scrutiny as an effective and secure communication mechanism. No communication channel is exempt from the attacks of fraudsters, none can claim to be a 100% ‘secure channel’. However, proactive and consistent vigilance can make the difference and that’s what MEF members want to see happen in South Africa.
MEF has made that first step and are delighted to have been invited by SABRIC to host the next session in Midrand, Gauteng in early 2020 to engage more of the banks and hopefully pinpoint a tactical solution and collaborative approach that will have a true impact in the fight against fraud.
If you’re interested in getting involved please do contact MEF here.