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Enterprise Telephony Systems Highly Vulnerable to Telecom Fraud

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Khushbu Raval
Khushbu Raval
Khushbu is a Senior Correspondent and a content strategist with a special foray into DataTech and MarTech. She has been a keen researcher in the tech domain and is responsible for strategizing the social media scripts to optimize the collateral creation process.

NextTech Today spoke with Arnd Baranowski, CEO at Oculeus, about how telecom fraud evolved, the type of voice communication services highly exposed to fraud, its implications and associated costs, and how to use AI ML to understand customer behavior.

In a world where cyber threats continually evolve, safeguarding telecommunications networks from fraud has become an imperative mission. In this exclusive interview, Arnd Baranowski, CEO at Oculeus, takes us on a journey through the company’s inception in 2002, its growth into a global player with over 100 clients, and its strategic incorporation of automation tools and AI technologies.

Baranowski delves into the evolution of telecom fraud, highlighting the shift from physical to virtual networks and the heightened cybersecurity risks accompanying this transformation. Addressing the vulnerability of enterprise telephony systems, he explores the implications and costs of fraud attacks, shedding light on the responsibility for financial damages in different regions.

The discussion not only exposes the historical lag in telcos’ fraud management practices but also offers a ray of hope. Baranowski provides insights into the promising changes underway, emphasizing the role of automation tools and AI in countering the rapidly advancing tactics of cybercriminals.

As the conversation turns to Oculeus’s innovative solutions, Arnd unveils how the company leverages AI and ML to understand customer behavior. In a time of hybrid work environments and increased attack surfaces, he elucidates the critical role played by Oculeus’s fraud prevention solution. Discover how their AI-driven technology establishes an extensive baseline, allowing organizations to thwart fraudulent telecommunications traffic within milliseconds proactively.

In this interview, Arnd Baranowski navigates the complex landscape of telecom fraud, offering valuable perspectives and unveiling Oculeus’s cutting-edge approaches to fortifying the telecommunications industry against evolving cyber threats.

Excerpts from the interview;

Tell us about your company’s journey.

Our journey is a story that I always enjoy telling.

It all began in 2002 when we developed our first software package as part of a consulting engagement with a telecoms operator in central Europe. This initial software system was designed to improve the management of this telco’s interconnect wholesale business. As a result of this project’s success, we officially founded Oculeus in 2004 and then began attracting additional business with other telcos and network operators across Europe.

Over the years, we have strategically developed additional software packages. Today, we offer a complete set of solutions that position our telco clients to manage their service and network operations better. We have recently added important automation tools and AI technologies to our products in recent years. Today, Oculeus is a global company with over 100 customers in a range of telecommunications verticals.

How has telecom fraud evolved?

Telecoms fraud prevention is an area we have expanded into in recent years, and we currently have a lot of momentum in this space.

Telecommunications networks were based on physical infrastructures and remained this way for decades. To commit telecom fraud on these networks, fraudsters had to break into the telecommunications infrastructure to redirect the traffic physically.

As IP and other internet technologies developed, telecom networks became physical to virtual. This evolution also changes the nature of the security vulnerabilities of telecom networks. Today, the threats of telecom fraud are cybersecurity risks.

What type of voice communication services are highly exposed to fraud? What are the implications and associated costs?

Enterprise telephony systems are highly susceptible to telecom fraud. Most have only basic security mechanisms that are straightforward for most cybercriminals to bypass. This is especially true for many IP-based PBX systems that run from cloud environments.

Once inside an enterprise telephony network, a cybercriminal can easily inject fraudulent telecommunications traffic into expensive destinations. In most cases, such attacks go undetected. The enterprise only discovers that it was hit by a telecoms fraud attack when it receives its monthly bill from its provider.

An important question is who is responsible for paying the financial damage of a telecom fraud attack. The answer depends on the local regulations. The damage is the service provider’s responsibility in only a few countries. However, in most places, the costs of a telecom fraud attack fall on the attack victim’s enterprise.

Have Telcos’ fraud management practices kept pace with these changes?

For many years, the answer to this question was clearly no.

Today’s fraudsters are cybercriminals using the latest technologies to execute financially damaging attacks rapidly. Despite this, most telcos’ telecom fraud management practices have been traditionally based on slow-moving, siloed processes that rely on legacy technologies that are far behind the innovations used by fraudsters.

However, there are encouraging signs of change and strong indications that telcos can now close these gaps. The current generation of telecom fraud prevention technologies telcos use includes automation tools and AI applications, improving their abilities to counter the innovations used by cybercriminals.

How do you use AI and ML to understand customer behavior? How can AI improve telecoms’ fraud prevention efforts, especially in the hybrid work environment?

The hybrid workplace has greatly expanded the attack surface of many cybersecurity risks, including telecom fraud. With more and more staff remotely connecting to central resources, there is a constantly growing list of vulnerabilities that IT teams need help to control.

Our telecoms fraud prevention solution applies AI to create an extensive baseline of expected telecommunications patterns and activities. An organisation’s telecommunications network is continually monitored, and any changes are immediately and automatically identified and investigated. Our AI-driven technology blocks any instances of fraudulent telecommunications traffic within milliseconds.

Our innovative application of AI positions our customers to stop telecom fraud before any significant financial damage is caused.

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