Posted by: Eric in Opinion
The last talkRA poll asked whether you felt telco CEOs understand revenue assurance. Thanks to everyone who responded – and sincere apologies to everyone who wanted to respond but was unable, after I failed to notice that the maximum number of votes had been received! The final results were both fascinating and unexpected:
There was a tie between those who felt CEOs varied in their knowledge, and those who felt it was wrong to demand that CEOs understand RA because the topic is poorly understood in general. I was surprised but pleased by this outcome. To my mind, the result suggests a growing maturity and confidence amongst RA practitioners. We know that RA can seem mysterious to outsiders who are not familiar with its intricate workings. We also appreciate that some CEOs want to acquire a basic grasp of the key points, whilst others do not care.
Nearly a quarter of respondents felt that most modern-day CEOs understood RA. This suggests optimism for the future. This feeling of optimism was underlined by the very limited support for the most cynical options: that CEOs do not engage with the RA team, or that CEOs only care about the money generated by RA.
I was most intrigued by the votes for “CEOs have more important things to worry about”. Though it ultimately only garnered support from 11%, all those votes were received in the first week of the poll, meaning it was the early poll leader. We should not draw inferences from what may have been a statistical quirk, but this makes me wonder if talkRA’s most regular readers have different expectations for CEOs than more casual visitors of this website.
Thanks again for taking part in this poll, which made me rethink the relationship between CEOs and RA teams. And it demonstrated an appetite for opinion polling of RA practitioners, so expect more polls in future.
The answer to LTT-13 was A = Yes. With relatively new products and service streams like mobile money remittance, there are a whole new set of non-traditional telecoms fraud risks. In summary, there are many types of fraud that can occur in the mobile money remittance domain that could lead to fraudulent transactions that would not be detected by the three controls proposed by the RAFM manager, namely:
- Handset theft
- Digital value smurfing
- Fraudulent credits
- Identity / Subscription fraud
- Network employee collusion
- Bank/Agent employee corruption
- Mobile malware
- Social engineering / Impersonation
- Phishing / Smishing / Vishing
- SIM swaps
- Cashing out process.
Congratulations to Arun Rishi Kapoor and Herbert Galiano for providing a correct answer. The winning response came from Daniel Peter in India, with the following explanation:
Yes. It is possible to commit fraud as the mentioned controls — A daily cash-in reconciliation, A daily eWallet reconciliation and A daily balance reconciliation – only checks the completeness of the transactions.
The below list of frauds can still be committed when the mentioned 3 controls are in place:
- Money Laundering: the process of making criminal assets appear legitimate. For example: proceeds from drug deals/ terrorists appear legitimate hence making the detection of the origin of these criminal money difficult for the law enforcement agencies. There are a few stages to money laundering — Placement, layering and integration — where black money at first gets placed into an account without arousing suspicion, later moved around from account to account reducing the funds into smaller amounts by using different people disguise its original source, finally the same is put back into the legal financial system and appears to be legitimate funds or assets. Controls are required for these kind of frauds
- Registration / KYC fraud: Illegitimate customers get to register for MM transactions. Customers can provide fake documents to register for the service or the agent can also fraudulently let an illegitimate customer register
- Fraud during MM transaction such as unauthorized person receiving the money. This type of fraud is possible when the SMS is possessed by an unauthorized person
- Agent deducting excess charges – over and above the rate published by the MNO — from the customer, and also paying lesser cash to the customer by claiming commission when they were not supposed to. Agent here takes advantage of consumers’ lack of education and ignorance about MM
- Not repaying the outstanding amount to the customer on disconnection of service
- Agents and consumers colluding together to defraud the system. For example: The agent can claim commission from MNO for adding subscribers whereas the added subscriber does not have any intention to avail the service but only to help the agent gain commission
- Customers can also defraud the agent by obtaining access to an agent’s account and sending SMS messages to initiate cash-out transactions.
Posted by: Eric in News, Opinion
When I saw Stratecast’s 22 predictions for the comms industry in 2015, my first thought was: it is easy to make fun of them. On the one hand, they predict that broadband regulation will be a big deal in the USA. Err… I think anybody – and I mean literally anybody, not just telco employees – who follows US news would have noticed US President Obama making a YouTube video asking for lots more broadband regulation. So this Stratecast prediction falls into the ‘sun will rise tomorrow’ category. On the other hand, another big story that closed the year was the so-called cyberwarfare between North Korea and the USA. Obama was involved in this story too, talking big about Sony’s handling of the malicious hacking of their systems, which was quite likely conducted by operatives working for the North Korean government. This culminated with lots of fuss about freedom of speech, as the entertainment company withdrew their comedy film about North Korea’s leadership from cinemas, and premiered it via the internet. But amongst their ‘secure networking’ predictions, Stratecast made no mention of increased government interaction with the private sector in order to prevent malicious hacking sponsored by enemy nations. So the report includes at least one blindingly obvious prediction, whilst failing to include another blindingly obvious prediction!
But then I had to think again. I was drawn to read the report because of this prediction:
Margin Assurance becomes a management discipline as purpose-built analytics help address core business needs.
I was going to lampoon this prediction for lots of reasons:
- Does this mean margin assurance was not a ‘management discipline’ in 2014, or the year before, or the year before that? When I joined Cable & Wireless in 2007, colleague Guy Howie was building superb tools to assure margins. And in 2010, when the TMF RA team started talking about extending the definition of RA to include margin assurance, I chided them because the original definition had been consciously written to include activities like margin assurance within the scope of RA. In short, margin assurance has long been a management discipline. Different telcos progress at different rates, but there is no need to insult everyone who has been doing margin assurance for many years by suggesting that people will only start doing it properly in 2015.
- What does the phrase ‘purpose-built analytics’ mean, and how does it reflect actual trends? Has there long been proprietary analytic software that could be used for margin assurance if the right data was supplied? Yes. Have RA vendors long supplied analytics suites incorporating functionality to perform ‘margin assurance’? Yes. Have real telcos been actively using such third-party software to assure their margins? Yes. Is it the trend in software to build analytic solutions designed to satisfy specific narrow purposes? No. On the contrary, the trend is towards general-purpose analytical capability being made more widely and easily available for flexible use all around the telco.
- The need for margin assurance is apparently prompted by tightening margins. But what is new about that? Margins did not suddenly narrow in 2014. Margins have been eroding for many years, depending on the maturity of the market in which the telco operates. The rationale for this 2015 ‘prediction’ has been valid for a decade, so why make the prediction now, and not before?
But then, I had a change of heart, and decided not to make fun of Stratecast. I read the full text of their prediction closely, and realized Stratecast are not guilty of making bad predictions. They are guilty of much worse: of making vapid predictions that rely on weasel words. You might think they are predicting something, but they are predicting nothing at all, because it is so hard to imagine an outcome that would clearly contradict it. Here is everything they had to say about margin assurance in 2015:
Rising from the roots of revenue assurance and fraud management, Margin Assurance is a business discipline focused on maximizing profits.
So far, they have predicted nothing, and said nothing interesting. But they did demonstrate inconsistency in how they capitalize words.
CSPs globally continue to see rising costs as data volumes increase from the roll-out of new network technologies, and through engagement in changing business models, including a sharp increase in partnerships.
Still no prediction. And nothing interesting.
CSPs are also seeing flat revenues or at least revenues that are not rising as quickly as their costs.
***Yawn*** Please tell us something we do not know already.
The result is tightening margins.
***Really big yawn***
Using the right analytical tools associated with the right types of data,
As opposed to the wrong tools, with the wrong data? How stupid do they think we are?
the Margin Assurance discipline in 2015 will
At long last, a prediction is coming!!!
become engrained in all major Operations and Monetization processes.
And that was it. That was all they said on the matter. But what does ‘become engrained’ mean? It means nothing. If you have been doing margin assurance for the last 10 years, Stratecast could argue it was not sufficiently ‘engrained’. And whatever margin assurance you conduct by the end of 2015, that could argue it is now ‘engrained’. In ‘major’ stuff. Though not necessarily in the ‘minor’ stuff. You will do it for major stuff like your processes, as opposed to all those non-processes telcos have for operating things and making money. The more you look at the words spouted by Stratecast, the less there is to see, until you realize you have analysed pages of documentation that told you nothing at all.
I closed the talkRA review of 2014 by saying the increasing complexity and interplay of several key trends in assurance made it impossible for me to predict what will happen in 2015. An honest analyst admits the limits of their knowledge, and when they can no longer make reasonable extrapolations from the data they possess. Sadly, Stratecast lack that integrity, and feel obliged to make predictions even when they have no idea what will happen, and no data to support their hunches. What happens in 2015 will be determined by what you do, not by what they say. So go ahead and do something of substance, without wasting time on empty predictions.
Welcome to this month’s LTT.
You work for a mobile operator in a country with a very high corruption perception index, as defined by Transparency International. The marketing team is planning to launch their latest product, a Mobile Money service, which allows customers to remit money overseas. Customers “cash-in” their money at service kiosks, and the same amount is credited to their eWallet. When a customer wants to send money to an overseas recipient, they receive an SMS with a unique 16 digit code. The recipient then goes to their nearest “cashing-out” facility, and presents the teller with the SMS and they receive the cash.
All of the “cash-in” received is deposited into a holding account at the local bank.
The marketing team want you to put some controls in place to detect any fraud, so you ask them for the product service description, and technical solution design documents. Unfortunately, since the business has been in such a hurry to get the service launched before the other operator, these documents do not exist. The launch day is tomorrow, so you need to act quickly.
With the limited information you know about the service, you decide upon the following key controls.
- A daily cash-in reconciliation: all the money collected at the service kiosks matches the total amount credited to the eWallet, and is deposited to the company’s holding account
- A daily eWallet reconciliation: (opening balance) – (closing balance) + (cash-in) – (cash-out) = 0
- A daily balance reconciliation: eWallet balance = holding account balance at the bank
If these high-level controls are performed and everything reconciles, is it still possible for any fraud to be committed without being detected by these controls?
If your answer is A = Yes, please state how the fraud could be committed.
Please send your response to quiz@talkRA.com – the most comprehensive answer received will be published on Monday 26 January.
A few years ago, I received an email that was more like a thesis detailing my shortcomings. It was authored by a prominent business leader in the CSP I was working for. My fault: I was “showing reluctance” in helping the company address in its fight against revenue leakages. As a result, his team was being forced to identify leakages, in effect doing “YOUR” job. The word: “YOUR” was in capital letters, bold and underlined. The latest leakage was proof of “YOUR” utter failure in “supporting the business, clearly abdicating YOUR role”. Those who have been in RA for some time know the utter shame that the RA guy feels when a leakage happens under his watch. It need not be something he did or did not do, it may not matter if it was somebody else to blame: the leakage simply haunts you. It keeps you awake. There is no need for somebody else to remind you of that mishap, or many others that have assaulted your spirit in this world of CSPs. In those lonely moments of self-flagellation, the last thing you need is some sucker helping you, particularly when his assistance is only in the form of whipping the areas you cannot reach.
Thus it came to pass that on a fine morning, I was summoned to give account of my failings. I hung my head in shame and shuffled to this business leader’s office intent on atoning for my sins, committed and yet-to-be-committed. He had gathered his team around his huge desk, no doubt, to barbecue me in front of the masses as a lesson to other RA folk who might be nursing ideas of abdicating “THEIR” roles. It did not take long for me to realize that the leakage that had been identified by HIS team (because of MY failure in this job) was only ferreted out using a report that I had painstakingly designed and scheduled to be going out regularly to that particular team. The report would show instances and quantification of the type of leakage that I was now guilty of “not” addressing. I pointed out this interesting turn of events but this guy was a real piece of work. He wouldn’t budge. Here was a man who really liked the taste of his foot in the mouth and I was interfering with his culinary experience.
Fortunately, I have now been in this business for a number of years, my hide has thickened and my blood pressure has settled quite close to the medically-safe limit. I hardly use swear words – because I have already exhausted the whole set of invectives that constitute my sailor’s thesaurus and I hate repetition. I consider it to be beneath a self-respecting sailor to recycle 4-letter words. Neither do I seethe inwardly – if I did, I would already have exploded a few years ago and in a fit of rage, mowed down a whole village using automatic gunfire. When I am really mad, I find it intensely therapeutic to think of how wonderful it would be if all countries joined together and established an Imbecile Processing Zone (IPZ) where each region could export the finest of idiots to compete against the crème de la crème of fools from other countries. Think of gladiators in the arena but this time fill the arena with fools of every race, creed and color. Over the years, I have built an impressive list of my nominations to be unveiled one day, when this dream IPZ comes into being. This guy promptly went in my list as number 378. Anyway, I digress.
I sat patiently waiting for an apology, which did not come, even after it was clear that for the single finger pointing at me, four were pointing back at the owner of the hand. It is generally not a good idea to roll with pigs in the mud so I promised I would check my reluctant attitude at the door next time. Before readers think of me as a mouse, I would like to say in my defence that when I looked at the faces of the guys who were “led” by this leader, they were truly embarrassed on behalf of their boss. I had been in the trenches with them and they knew if I was reluctant or committed. That is all that mattered.
I was reflecting on this last week as I wondered what I have really learnt about RA. Thinking of that incident, it reminded me of what we all set out to achieve in RA space. What we all want to see, at the end of our work, is an organization that has become “RA” oriented in its thinking and doing. An organization that does not look towards the few guys who work at the RA workstations but takes the challenge of revenue assurance as one of every team’s key objectives. I will be the first one to admit that I have spectacularly failed in effecting this culture change so many times that it no longer hurts as much as it used to but the wounds are still raw. However, I have also been fortunate, in this career, to have witnessed a few times, somebody in a team within the organization, living according to this ethos. For that I am eternally grateful to the gods of the RA universe. I bow down to them because I know my evangelism has sown some seeds somewhere.
As 2014 came to a close and one more year of this evangelism cycle starts, I hope to gain just one more follower in the organization who will take upon himself the challenge of being RA-aware in his work. If more followers should be found, I shall bless the gods of RA universe even more but for now, just one more follower will do. Should that happen, I think it might just make up for the apology that I never received, years ago from idiot number 378.
The music I hear is the sound of those sparse victories, that graced our past and the beginnings of the few that are yet to come, laced with Auld Lang Syne.