MNOs Unite With Banks to Tackle a Million-Dollar Fraud Wave
A consortium of UK telecommunications companies and financial institutions has launched a system to combat rising payment fraud through mobile network data sharing.
The initiative, named Scam Signal, connects Britain's four mobile network operators - EE, Virgin Media O2, Three and Vodafone - with the banking sector through a new data exchange system. The project stems from collaboration between UK Finance, which represents the banking industry and the GSM Association (GSMA), the global mobile operators' association.
Authorised Push Payment (APP) fraud occurs when criminals convince banking customers to transfer money to accounts they control, often by impersonating legitimate organisations such as banks, government agencies, or utility companies. It currently costs UK consumers £213.7m (US$275.82m) in the first half of 2024, with phone-based scams representing 35% of these losses by value.
"Fraud remains a major problem, with our data showing that over £210m (US$270.75m) was stolen by criminals through APP fraud in the first half of 2024," says Dianne Doodnath, Principal of Economic Crime at UK Finance. "APP fraud originating from telephone calls or SMS continues to be of higher value and accounted for 35% of losses."
Powering a new scam detection platform
The system operates through Application Programming Interfaces (APIs) - software protocols that enable different computer systems to exchange data. These APIs, developed through the GSMA's Open Gateway initiative, allow banks to access mobile network data in real-time to detect potential scams before transfers are processed.
The technology also analyses patterns between incoming calls and subsequent payment requests, providing banks with risk indicators. This builds on existing anti-fraud measures such as SIM swap detection and number verification systems used in markets including Brazil and China.
The implementation required extensive collaboration between telecommunications providers and financial institutions to establish secure data sharing protocols. The system adheres to UK data protection regulations while enabling real-time information exchange between sectors that have traditionally operated in separate technical ecosystems.
Mobile network operators contribute data about call patterns, SIM card changes, and other network-level indicators that may signal fraudulent activity. This information is processed through the Scam Signal system and matched against banking transaction patterns to identify potential fraud attempts.
Vodafone trial showing 30% detection improvement
Vodafone, the UK-based global telecommunications company, conducted a three-month trial with a major unnamed British bank. The pilot demonstrated a 30% improvement in scam detection rates through correlation analysis between network data and fraudulent transactions.
The development process involved technical workshops between mobile operators and banks to identify specific data patterns associated with fraudulent activity. These findings informed the development of the Scam Signal system and established baseline parameters for fraud detection.
"It is great to see the result of our members' collaboration directly addressing that problem and providing significant benefit to the UK public – Scam Signal is already detecting fraudulent calls and stopping transactions to criminals," comments Brian Gorman, Fintech Lead at GSMA.
Cybercriminals use a sophisticated range of tactics to extort personal data or money from their victims. Mobile scams in particular continue to rise, with consumers worldwide losing an estimated US$1tn to fraudsters in the last year alone - highlighting the urgent need for stringent digital protective measures in the mobile banking world.
The Scam Signal system helps identify suspicious patterns in real-time, such as calls appearing to come from legitimate numbers but originating from unexpected locations or networks. This information allows banks to flag potentially fraudulent transactions for additional verification before funds are transferred.
The initiative represents a shift towards cross-industry collaboration in fraud prevention, moving beyond traditional banking security measures to incorporate telecommunications data in real-time fraud detection systems.
The project has established technical standards for secure data sharing between mobile operators and banks, creating a framework that could be expanded to other markets facing similar fraud challenges.
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