The era of 5G connectivity is now a reality across much of the world. There were more than one billion 5G connections in 2022 according to industry association GSMA, projected to double to over two billion by 2025.
This remarkable growth represents the fastest adoption of a new-generation mobile technology in history, with 5G accounting for 5.5% of total mobile connections within just 18 months of launch. There are now around 200 5G operators across the world, present in more than 70 countries and covering around one-third of the global population.
Yet this rapid proliferation brings with it numerous challenges for communication service providers (CSps)—beyond the significant upfront capital cost of implementing this infrastructure.
The rapid growth of 5G means new opportunities for fraud, and growing concern about the potential for stretched CSPs being vulnerable to sim boxing, or simbox fraud, as well as the significant impacts of sim swap fraud.
Sim boxing is a type of interconnect bypass fraud whereby fraudsters request large numbers of sim cards from telecom operators, then incorporate them into a device which can trick telecom systems into applying local call charges to international calls. This bypasses higher international call costs, allowing fraudsters to pocket the difference between the two rates on calls they intercept, and incurs significant revenue loss for CSPs.
Simbox fraud is one of the six critical areas of telecoms fraud coverage, and an area that could be particularly at risk during the rise of 5G. The switch to 5G sims is likely to see huge increases in the volume of 5G sim cards being retired, reissued, or newly issued to meet consumer demand for new 5G services.
This creates huge amounts of ‘noise’ for CSPs seeking to track sims, and understand how and where fraudsters may be obtaining and applying these sims for illegal purposes such as sim boxing.
According to a 2021 report by the Risk and Assurance Group, bypass fraud, including sim boxing, cost CSPs a huge USD2.35 billion in 2021. This figure could potentially rise if vulnerabilities are exposed around the growing number of 5G sim issued by CSPs.
Sim swap fraud is a type of manipulation that allows fraudsters to access a users’ accounts by tricking telecoms providers into activating a new sim card, allowing scammers to take control of a targeted phone number. This number can then be used by fraudsters to generate one-time-passcodes, which are sent directly to their own devices using the stolen number, allowing them to access the victim’s bank accounts, e-commerce accounts, and similar financial platforms.
It’s estimated that fraudsters in the US alone earned USD68 million in 2021 from sim swap fraud, according to announcements by the FBI. The Communications Fraud Association estimates that globally, CSPs lost USD1.62 billion to sim swapping in 2021. That shows how lucrative such activities can be for unscrupulous scammers, and the potential losses that customers can face.
The rise in 5G creates a similar challenge to sim boxing for CSPs in tackling this fraud threat, as the growing number of legitimate sim swap requests thanks to the accelerating 5G switch creates a huge data burden for risk and protection functions.
Neural Technologies’ machine learning fraud protection solutions provide a powerful protection against the growing risk of sim swap and simbox fraud. Our sophisticated analytics incorporate both artificial intelligence (AI) and machine learning (ML) approaches, ensuring our Fraud Management solution can accurately and rapidly identify high-risk events which indicate sim boxing or sim swap fraud.
This adaptive, flexible solution can be rapidly scaled to meet the demands of the current environment, allowing CSPs to ensure robust fraud protection even during a period of high sim requests. It not only identifies existing fraud patterns, but identifies the ‘unknown unkown’ of emerging fraud threats, using a Detect, Adapt, Prevent approach that can be customized for the unique operational conditions.
It’s vital that an effective solution is employed to quickly assess the high-risk landscape. Our Fraud Management product leverages detailed profiling using unique multi-stream analysis to continuously profile customers, dealers, and traffic routes, and identify the specific behavior that is indicative of sim boxing or sim swap fraud. This is backed by near-real-time deep network and event analysis, providing both ongoing monitoring as well as ad hoc insight as required.
Our powerful, automated approach is also accompanied by user-friendly dashboards with a simple, web-based interface, giving timely and accurate insight across all fraud operations, further facilitating analysis and risk management functions.
5G offers a remarkable opportunity to drive connectivity improvements around the world, at the same time unlocking exciting new revenue streams for CSPs. In doing so, operators need to be aware of the expanding threat surface this transition could present, and adopt the right fraud management solution to ensure that revenue remains protected at this exciting time of transformation.
Get in touch to explore how our Fraud Management solution can protect your revenue