Eric

Eric Priezkalns is a founder of talkRA. He is a widely recognized expert on risk management and business assurance for communications providers. After a successful full-time career, Eric now splits his time between occasional consulting projects for trusted customers, and his many other passions. Eric was Director of Risk Management for Qatar Telecom and has worked with Cable & Wireless Group, T-Mobile UK, BSkyB, Worldcom UK, and Nawras, as well as advising various software developers and system integrators.

Eric is a qualified chartered accountant; he trained whilst employed by the Enterprise Risk Services division in Deloitte's London office. His Masters in Information Systems was earned with distinction, and he holds a first-class degree in Mathematics and Philosophy.

In 2006, Eric was already a popular speaker at conferences, but he decided to reach out to a broader audience with the first blog dedicated to revenue assurance. Many have since copied him, but none have matched his output.

Eric was the first leader of the the TM Forum's Enterprise Risk Management team, a founding member of the TM Forum’s Revenue Assurance team, and he developed the original Revenue Assurance Maturity Model. In the UK, Eric is known for his critique of billing accuracy regulations. In Qatar, Eric was a founding member of the National Committee for Internet Safety. Eric currently serves on the committee of the Revenue Assurance Group, and he is an editorial advisor to Black Swan.

Customers of UK telco TalkTalk have seen a big increase in the number of malicious scam attempts after their data was stolen by hackers, according to The Register.

TalkTalk said the following about the security breach:

… we have now become aware that some limited, non-sensitive information about some customers could have been illegally accessed in violation of our security procedures.

We are aware of a small, but nonetheless significant, number of customers who have been directly targeted by these criminals and we have been supporting them directly.

We want to reassure customers that no sensitive information, such as bank account details, has been illegally accessed, and TalkTalk Business customers are not affected.

The rise in attempted scams was first noticed at the end of last year. The UK’s Information Commissioner has now been informed. As ever, it must be a big relief to customers to know that telcos investigate security failings after they take place, and that months later a government bureaucrat will also be asked to attend meetings about what went wrong. That this is now a standard and recurring element of security procedures speaks volumes about the priorities of some businesses, and the value added by the Information Commissioner.

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Visa, the credit card company, has announced it will use software on mobile phones to determine their location when customers make credit card payments. The aim is to verify if the phone is in the same place as the payment is taking place. If not, there is an increased chance that the payment will be declined. You can read the press release here.

The phone’s location is estimated by Finsphere Corporation, specialists in geo-spatial analysis. They provide their estimate to Visa who will reportedly match this with the transaction location in less than a millisecond. A millisecond is a very short period of time, and it takes many milliseconds for mobile phones to exchange signalling data with their networks, so this claim sounds like marketing hype. What will matter in practice is the total time to collect and collate the data, not the time it takes Visa to perform their final comparison.

Customers will enroll for the service by downloading mobile banking apps from participating financial institutions. The press release states that customers will need to ‘periodically’ connect to a mobile or wi-fi network, but leaves it vague as to how accurate the location assessment will be if gaps in network coverage prevent connection. The service will be available to US card-issuing financial institutions from April 2015.

This feature is another example of the trend towards using network technology to enable constant surveillance of the individual for the purposes of enhancing security. The press release is silent about how much data is collected when the customer is not making payments, and whether the location data will be used for other purposes than verifying payments.

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If you have not seen it yet, check out the interview given by fraud management specialist Jan Dingenouts for Black Swan. I will not repeat everything Jan said, but he made some key observations that resonate with my own views.

  • In a larger telco, it is hard for a team of 20 or 30 employees to acquire and maintain a broad enough range of revenue protection knowledge and skills. In small telcos, the two or three people responsible for fraud management and revenue assurance have no chance of maintaining comprehensive awareness of all the relevant risks. This is not a criticism; even hard-working super-geniuses cannot understand every complicated cause of fraud and leakage. Employees of small telcos need to draw on outside help to maintain a desirable level of risk coverage.
  • Big wholesalers need to provide more fraud protection for their small retail telco customers.
  • The nature of bargaining power means it is harder for a smaller business to make demands of a larger supplier. However, small telcos need to factor losses from fraud into any assessment of the cost of routing traffic via various wholesalers. If they insist on better fraud cover, they will eventually get it from their current wholesale partners – or from the wholesalers they switch to.
  • A small telco that belongs to a group has increased bargaining power if the group has the intelligence to exercise its bargaining power. But irrespective of who owns which telco, it makes sense for small retail telcos to speak to their peers and collectively drive up expectations for how wholesalers prevent and respond to fraud.

Jan Dingenouts is a new name to me, but this interview gives me the impression that Jan is a plain-speaking no-nonsense consultant. I hope to hear more of his advice in future.

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The new home of talkRA, commsrisk.com, is online and ready to accept visitors! This is the beta test phase for the new website, so if you spot an issue, please tell us. You can do so via the new site’s contact form, or you can tweet our new Twitter handle, @commsrisk. Do not worry if you previously followed @talkRA on Twitter; that account has been migrated to the new name, so you are already following @commsrisk!

The two websites will run in parallel whilst any bugs are being fixed, with the same content published at both domains. However, I am sure you will prefer the new platform, which was built on professional software. It is designed to be easy to read, and it responds to the size of the browser window, giving a much more satisfying experience on smartphones and tablets. Our analytics confirm that talkRA is read on a very wide range of browsers around the world, including unusual installations on people’s phones and old versions of Windows Internet Explorer on people’s work computers. A lot of testing has been done on Commsrisk, but it is difficult to anticipate every possibility. Please be patient if you discover a glitch, or if we need to make changes.

Your help is greatly appreciated. The move to Commsrisk was motivated by seeing the ever-growing number of visitors to talkRA. Without you, there would be no Commsrisk. So go, and press buttons, follow links, and try to break things and find faults with the new website. I know you excel at that kind of task!

talkRA has served us well, and has been a wonderful home, but its age is showing. Matt Clark and I spent a few days working side by side, doing the coding and integration needed to get talkRA up and running. In contrast, Commsrisk represents months of sustained effort. iPhones were new when talkRA launched, so Matt and I did not worry about creating an experience that works as well on a handheld screen as it does on a desktop. Please support the transition to Commsrisk by bookmarking the new URL, commsrisk.com, and sharing the news with your friends. We are moving to a new domain, but we want everyone to come with us.

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It is tricky to analyze the financial performance of cVidya, the Israeli assurance business. They are a privately-owned company, and do not need to publicly report audited numbers. Their management team occasionally volunteers information about the company’s performance, but their comments have sometimes been contradictory or otherwise suspicious. I most trust the data available from an unlikely source: Deloitte’s Fast 50 index, which ranks high-growth companies in various geographical regions. Because that index measures growth over a period of 5 years, and because cVidya has been listed in Israel’s Fast 50 every year since 2008, the data is more trustworthy than that presented in a one-off press release. Put simply, if cVidya gave Deloitte numbers that exaggerated their growth in one year, then they would likely suffer from depressed growth statistics in subsequent years. As a consequence, there is no sensible way to massage these numbers in the long run.

Using the Fast 50 data and other highly reliable data points – such as the information available when cVidya merged with publicly-listed ECtel at the beginning of 2010 – I have maintained a simple model that estimates cVidya’s annual revenues. The latest data comes from the 2014 Fast 50 index for Israel. This states that cVidya enjoyed 128% growth between the 2008 financial year and the 2013 financial year. This may sound like a lot of growth, but bear in mind that the 2010 merger with ECtel doubled the revenues of the company. Plugging the new number into the model gives the following analysis of how cVidya’s revenues have grown from year to year.

cvidya_growth_13

This model estimates that cVidya generated revenues of USD45.6mn in the 2013 financial year, a rise of 8% compared to the previous year. Growth like that would be modestly impressive, especially when compared to the poor results of some competitors. So why was there no positive announcement hailing the success of cVidya’s sales team? I can only speculate about possible explanations. Previous exaggerations suggested cVidya’s annual revenues were between USD60mn and USD70mn. Growth of 8% is not something you can boast about if it means admitting current revenues are 25% lower than the bottom end of prior claims. It is also difficult to trumpet this success if it clarifies that annual revenues are 13% below the FY11 peak revenues of USD52.5mn, as estimated by this model.

cVidya recently recruited John Gillespie as EVP of Sales and Marketing. If these revenue estimates are accurate, Gillespie’s biggest challenge may not be delivering growth per se. He needs to deliver enough additional sales to align cVidya’s revenues with previous expectations, which were overinflated. To do that, cVidya will need to buck market trends and make offers that set them apart from their rivals. It will be interesting to see how Gillespie responds to the challenge.

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