Mobile devices are prevalent in today’s society. As we yearn for convenience, phones are a great method to gain easy access to the online world. That is why telecom service providers are so important. However, they run into the same problem all industries do – the threat of identity fraud. In this article, we will talk about how this threat manifests and what the telecom industry can do to avoid it.
What is Sim Card Fraud?
Sim card fraud manifests in two main methods. First, it deals with prepaid sim cards, lack of transparency, and phone scammers. The second deals with sim card hijacking. We will take a look at both.
The Problem with Prepaid Sim Cards
Prepaid sim cards have always been an easy and convenient way to change numbers, make calls, have access to a mobile network when travelling, and other things. However, despite how easy they are to purchase, they pose a big threat.
Mainly, prepaid sim cards have been anonymous for a long time. Anonymity means that scammers could turn to prepaid sim cards without fear of being caught. This ranges anywhere from impersonating legitimate businesses, making fake phone calls to try and scam money out of unsuspecting victims, to selling drugs or planning terrorist acts. With how prevalent these problems are, anonymous cards are no longer a viable option. However, removing anonymity and keeping the convenience aspect of these cards can become a challenge.
In order to keep their customers happy and prevent fraud, telecommunication services need to find a way to combine verification methods and the accessibility of prepaid sim cards. This cannot be achieved without the use of digital verification methods.
Sim Card Hijacking
At a glance, sim card hijacking is quite simple. A fraudster will take over the phone and use it to access bank apps or other financial sector services.
As many people choose to share their lives on social media, fraudsters can use online stalking to gather the details they need. From addresses, dates of birth, and full names to bank details. Then, all they need to do is use confidence tactics to convince the telecom company that provided the sim card that they are the person whose details they are using. Once this is done, fraudsters will get “replacement” cards with the same information, claiming they have lost the original.
With a sim card, fraudsters can change personal settings and gain access to online banking apps, steal money, and transfer it to their own accounts. Any 2fa authentication that was set up using a phone number will also be available to the fraudsters.
How can Sim Card Fraud be Prevented in Telecommunications?
Sim and other fraud prevalent in the telecom industry can be prevented with the help of eKYC. It’s a way to employ facial recognition and liveness check software remotely. This ensures safe and quick onboarding as well as future authorization.
Although manual KYC processes are an option, many users opt out of these options as they prefer to be done with onboarding quickly. With this, mobile operators must adapt and offer verification processes that are convenient for their customers.
With eKYC, verification can be performed using the same phone that the sim was purchased for. All it needs is a working camera. They can provide biometric information as well as pictures of their documents to be checked within minutes or seconds by telecom employees or third-party KYC providers.
How can Ondato Help the Telecommunication Industry?
A service like Ondato focuses on Know Your Customer (KYC) and can provide help for many telecom operators. Let’s look at the ways Ondato can help.
Reducing identity fraud. Ondato’s eKYC is 99.8% accurate, which means fraud won’t slip through your fingers.
Better customer engagement and satisfaction. An automated process allows customers to finish verification from anywhere, at any time that is comfortable for them.
Superior brand reputation. A good KYC process will ensure that no loss of information occurs. Word of mouth is also a big factor when choosing mobile providers, and happy customers are the best selling point.
Reduced customer acquisition costs. Digital KYC is a lot less expensive than manual KYC, both in terms of resources and employees. It allows companies to streamline the customer onboarding process and save.
Better KYC compliance. A service like Ondato excels in ensuring compliance. In the face of strict regulations and ever-changing rules, trusting a KYC provider is a very smart choice.
Why is Identity Verification Important?
Doing everything to combat fraud is necessary to survive in today’s market, and any communication service provider should employ anti-money laundering processes, including identity verification. This helps with:
Fighting Financial Crime and Fraud Prevention
Fighting identity fraud and financial crime is the most important benefit of identity verification. Clarifying disparities, identifying fraudulent identification documents and synthetic identities, confirming age, and gathering other crucial information can all be done by thoroughly checking each client’s identity. This protects both the company and the clients.
Introducing a digital identity verification service expands the accessibility of several services. It is also a vital component of a company’s international growth. For the telecom industry, it allows customers to be verified from anywhere. This makes changing sim cards much easier for potential customers.
Streamlining the Customer Experience
Using digital IDV can make it easier to keep track of important information updates. Clients used to be required to update their data whenever it changed. Reminders and information checks that happen automatically now handle this procedure. Additionally, it speeds up the account opening process for the customer, boosting the likelihood that they’ll stick with the service.
Dealing with international clients
Telecommunication companies often service several countries. The European Union alone is full of challenges. Since the data privacy laws are unique to each region, identity verification is required when collecting data on those customers. On top of that, authentication measures are very important when customers perform steps that put their information at risk. For example, registering new wireless hotspots, accessing personal files, making payments or opening links via their own mobile network.
In essence, the identity verification process is used to determine a person’s real identity. When done correctly, it is a reliable procedure that prevents financial crimes, such as money laundering and identity theft, by stopping a criminal in their tracks. It is frequently used in non-regulated industries to ensure the safety of their services. KYC verification is an important security measure that every industry should apply, whether it is a legal requirement or not.