Life teaches us some tough lessons: no matter how successful one thinks one is, nobody is irreplaceable and no company is too big, too famous or too revered to fail. Take Thomas Cook Group UK Plc and its associated entities.
Thomas Cook was the oldest international travel company on the planet having been founded by none other than a Mr. Thomas Cook back in 1841. At 2am on September 23rd 2019, their CEO announced that it had ceased trading with immediate effect and all future flights and holidays has been cancelled. 21,000 staff lost their jobs and 150,000 customers were in-resort at the time leading to one of the biggest civilian repatriation efforts since the Second World War. Nobody foresaw this.
The principal reason for Thomas Cook’s demise was its failure to grasp that the majority of travel is now booked online. Few people visit high street travel agents. They had an analogue business model in a digital world. Across 2021, we believe this story will unfortunately be repeated many times across much of the world.
Due to no fault of their own, but because of an invisible potentially deadly virus, organisations globally scrambled to transform themselves at an unprecedented rate. An online presence is no longer just a ‘nice to have’ for the more traditional bricks and mortar organisations, rather it has become the only source of revenue for most. A true existential means they need to work smart.
Purchasing habits have changed beyond recognition in the past year with the huge drive online. This seismic shift brings with it some big challenges though, none larger than trying to eliminate fraud.
For many years PricewaterhouseCoopers (PwC) have conducted their Global Economic Crime survey and their findings for 2020 do not make for light reading: the economic crime figure is their highest ever recorded, with 47% of businesses surveyed stating that they were impacted by fraud, corruption or other economic crime.
Fraudulent attacks on businesses appear from multiple angles, with almost 40% of frauds globally being perpetrated by external parties. Mobile network operators (MNOs) globally are not immune either.
Cumulatively we see MNOs globally losing billions annually but most of the ‘fraud’ perpetrated on them is not fraud in the classic sense of the word, something the average person on the street could immediately relate to. It’s of a different shade and a little subtler than that. To those of us in the know here at Vox though, subtle it isn’t and it hits like a sledgehammer. Let us explain.
About two-thirds of the world’s population now owns a mobile phone which means billions are clients of MNOs. A person’s mobile number is fast becoming one of the most important means of identifying and differentiating them, and with the massive moves online being made by so many brands, much of their content delivered to their customers is done so using mobile digital channels.
Companies today have so many ways to deliver marketing, transactional and content to us consumers but not all channels are built equal. SMS may be 28 years old but taken in isolation, there still isn’t another channel out there that is as ubiquitous and as successful at driving real engagement as SMS does. SMS for Business Messaging (B2C and B2B) purposes is called Application-to-Person (A2P SMS) and whilst traditional Person-to-Person (P2P) SMS volumes are on the slide due to increasing usage of apps like WhatsApp and WeChat, A2P SMS is on the up.
People don’t need a smartphone to access SMS. You don’t need to be connected to the Internet either. But most importantly, you’ve got to realise that people generally feel so comfortable with text messaging. That’s what makes it the go-to channel for businesses to converse with their customers and indeed potential customers. The result is billions of A2P SMS transactions daily heading to customers – who just all happen to be customers of mobile operators.
Given the impressive brand and market presence most MNOs have one would quite logically assume that brands would turn directly to operators for the rapid and accurate delivery of their mobile content but for the most part, this is most definitely not the case. Aggregators have principally had the market to themselves for the best part of two decades, doing as their name would suggest – aggregating transactions for onward delivery. The real issue is the financial side of the equation.
Given MNOs own their relationships with subscribers, it would be expected that they receive a piece of the action for every B2C or B2B transaction they route to their customers. This is unfortunately not the case. Only by taking pro-active steps, working with forward thinking companies like Vox, can MNOs monetise these transactions.
Aggregators and others are smart and many will try ‘alternative’ routes to (literally) bypass operators and their charging mechanisms. The real kicker is that these efforts mean not only lost A2P SMS revenues but also potentially an increase in their connectivity cost base. One MNO’s SIM cards meant for P2P use can be used to deliver A2P SMS, resulting in interconnect costs for the MNO from which the SIMs were sourced. One SIM card use this way can cost an operator hundreds (if not several thousand) Euros, dollars – pick a currency – per month. The numbers are staggering.
Knowing this, the next logical thing would be to assume that if the control and monetization of all A2P SMS could be assured then job done, feet up on the desk, sipping a celebratory drink. No, wrong again.
Voice was around long before SMS and if Voice channels are not put under the microscope in the same way you might A2P SMS, you may just find Voice being used for content delivery. Thing one-time passwords (OTPs) delivered via SMS. It’s possible to deliver these using text-to-speech on Voice. The customer experience is not the same but if the price is a factor so much lower than that of SMS, temptation is real.
Another looming spectre is that of app-based fraud for artificial traffic generation as well as traditional bypass. The fraud world evolves constantly.
Mobile operators need to wake up to the realities of the fraud landscape and work with a provider who knows A2P SMS, Voice and who is well aware of everything new popping up. If they don’t, instead relying on a provider expert in just one or two of these areas, then they are missing a real trick and risking some serious money. We’ve got to stress it again: literally billions is being lost each year by MNOs not understanding the situation and addressing it decisively and rapidly.
Few are well placed to deliver all of the above to MNOs but here at Vox we just happen to know a great company who came from the Voice world, one which can deliver on the whole package very well. With a lot to lose by doing nothing and a huge amount to gain, just ask us…
Written by Ehsan Ahmadi, CEO and Founder of Vox Carrier
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